My client has a single member LLC with $100,000 of ordinary income, $700,000 of dividend income, and capital losses of $1,000,000 in 2019. Are the capital losses ignored to get a total on the LLC worksheet
so the total fee is based on $800,000 or do the capital losses of one million get considered and the total gets reduced to zero and pays the $800.
Also included are capital gains (not losses) and IRC §1231 gains (not losses). Under IRC §61(a)(3), the gains and losses are never netted. For example, if an LLC sells two stocks, one at a $20 gain and one at a $2 loss, it would include $20 (not $18) of capital gain in the calculation of total income. (R&TC §17071)