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Compass Diversified Holdings Message Board

  • teknomaje teknomaje Mar 8, 2011 1:05 PM Flag

    K-1 Dividend & Interest listed on K-1

    On our K-1 it lists dividends and interest which must be recorded on 1040 8 & 9
    This figure is different from the distribution and (is actually though slightly, more than the distribution received) which is then subtracted from the basis.
    I called Codi tax info and was told that the interest and dividend are pass through from the company.
    Do I understand correctly that the dividends and interest (again more than the distribution received) are taxable at their rates and in addition the distribution must be subtracted from my basis when I sell it?
    This looks to me as though I am being taxed at double the distribution.
    I would appreciate any help from message board I can get

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    • Pub. 541. Consult with your tax advisor.

      Adjusted Basis: There is a worksheet for adjusting the basis of a partner's interest in the partnership in the Partner's Instructions for Schedule K-1 (Form 1065).

      The basis of an interest in a partnership is increased or decreased by certain items.

      Increases. A partner's basis is increased by the following items:

      The partner's distributive share of taxable and nontaxable partnership income.

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