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Question

Interest income received the year after my business filed a final tax return

Forum|Forum|3 years ago
October 7, 2022
2 replies
16 views

I sold my business (owned in an LLC) in 2019 and filed a final Form 1065 in 2020. In 2022 the LLC unexpectedly received an IRS refund (refund of a previously paid penalty) including taxable interest income. I assume I need to now file a Form 1065 for 2022 (and a state filing) which would only report the interest income, and distribute K-1s to the partners. Is this accurate? Since my 2019 return was marked as a "Final Return" will I have any issues with the IRS filing a 2022 return?

TurboTax Home & Biz Windows

Level 15

since a partnership does not pay federal income taxes there should not have been a refund. some states do tax the income of a partnership so perhaps its the state and not the IRS. we need clarification of what happened.

Mike9241

MikeInChicagoAuthor

Level 2

CLARIFICATION: the amount received from the IRS was a refund of a previous penalty, not a tax refund. The penalty refund includes interest income