Thanks for your response. This is the first year of our Real estate partnership LLC and I want to make sure I am doing right; I have the followup questions:
1) So you said we should file the 1065 form with TurboTax Business; which is the federal filing I assume you meant. Do I also have to file a State Business tax using Turbotax business. My software copy said it had no State tax form for me.
2)You said to give Schedule K-1 to the partners and that will show the portion of each partner in the income or loss that they need to include in the personal tax filings. My question is that, doesn't that create a double taxation ....if I had already filed that same income at the Federal level with the Turbotax Business (I assume if income was made, I would have paid taxes on it when I filed). and the partners have to also file tax returns on the same income.
I know Corporations pay taxes on business income but Shareholders don't have to file their portions of that income if they didn't receive distribution of dividends.
I our case, we are reinvesting any income we might have and so I am wondering why a partner needs to file a Schedule K-1 for income they had never received.
I apologize if this 2nd question was too elementary ...I was just comparing LLC ownership to a shareholdings in a big Corporation:)
