My first encounter with K-1

[sailor]

A question for you, o enlightened investors:
I received my first K-1 form as a result of exercising stock options of my employer holding company (structured as partnership in Cayman Islands! Wow ) .
All the amounts are blank, except for my partnership interest (he, he 0.0041%).
Should I expect the final form with the amounts filled in?
If so, I might need to amend my tax return and next year we'll be following the lead of many posters here - filing an extension and forgetting about income taxes until October.

 

[ChiliPepr]

next year we'll be following the lead of many posters here - filing an extension and forgetting about income taxes until October.

You cannot just file for an extension, you have to figure out your tax liability including for those K!'s you don't have) and make sure you have completely paid your taxes... If after you do your taxes in October, if you owe more money you will also owe a penalty on that money. At least that is the way I understand it.


as for receiving another K1, Are you sure all those other fields are not just zero? you exercised the options, but did the company distribute any income to you?

I get an estimated "K1" in April listing what they "think" my income will be and the character, I use this when I do my taxes to file the extension. In September, I receive the final version with the official numbers.

 

[rodi]

My only experience with K-1 was the year following my dad's death. It came a month after I'd filed - but was complete. I filed an amended return.

I had no idea it was coming, so it was a shock to see I owed money I didn't know I had earned (had never seen.)

 

[jebmke]

My only experience with K-1 was the year following my dad's death. It came a month after I'd filed - but was complete. I filed an amended return.

I had no idea it was coming, so it was a shock to see I owed money I didn't know I had earned (had never seen.)

To me that is the fault of the executor. I recently helped close an estate. In late November I did an estimated K-1 for the beneficiaries, then provided actual K-1s in early February.

Keep in mind that estates usually have a different tax year than individuals unless the decedent cooperates and dies on December 31. Therefore, a K-1 can appear at almost any time of year.

 

[sailor]

You cannot just file for an extension, you have to figure out your tax liability including for those K!'s you don't have) and make sure you have completely paid your taxes... If after you do your taxes in October, if you owe more money you will also owe a penalty on that money. At least that is the way I understand it.

Thanks for the remainder - I usually try to get a refund from both Feds and State, so I don't need to pay anything before April 15th.


>as for receiving another K1, Are you sure all those other fields are not just zero? you exercised the options, but did the company distribute any income to you?
I did not think income needs to be distributed to be taxed:
Partner's Instructions for Schedule K-1 (Form 1065) (2011) : "Although the partnership generally is not subject to income tax, you are liable for tax on your share of the partnership income, whether or not distributed."

 

[LOL!]

The K-1s that we have received and those we have created have mostly been blank. I know TurboTax asks questions like, "Do you have any amounts entered on K-1 4(a), 4(b), 4(c)? ... Do you have any amounts entered on 12(a), 13(f), 59(z)?" etc and then does different things depending on your answers. It is really no big deal at all. Nor is it unusual that most of the blanks are blank. A K-1 is kind of like a catch-all way to report income to folks.