QBI and guaranteed payments to S corp - Spidell

QBI and guaranteed payments to S corp

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Message Board QBI and guaranteed payments to S corp

This topic contains 0 replies, has 1 voice, and was last updated by michael riordan 4 months, 1 week ago.

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    michael riordan
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    Hi-I have an S corp who is a partner in a partnership. The other partner is the spouse who owns only 5% of the partnership

    The partnership makes payments to the S corp that could be called guaranteed payments or  partnership distributions. For now the payments have been listed as GP

    The S corp is 100% owned by the tp and sp

    According to the regulations GP’s to other entities do not lose their taint as being GP and therefore are not eligible for the QBI deduction.

    Eg-Corp receives $1mill in GP and shows 200k as partnership income. Corp offsets its 1.2 mill in income with an 800k DB contribution leaving 400k as Corp income. Is any of this 400k eligible for the QBI deduction. The GP is completely arbitrary on behalf of the partnership

    What would happen if we said the GP was only 200k and then the partnership income would be $1mill

     

    Any thoughts

    Mike