What is the name of your state? VA
What is the name of your state? Virginia
Here is the situation.
Bob is a young man from a fairly wealthy family.
Bob gets a K-1 from a Bob's Family LC (this LC was set up by Bob's father)with 21k of income. 17K of this income is passive and then there is 3k interest income and 1k of capital gain. This K-1 comes from Bob's father's accountant.
It states on the K-1 that he has 33% interest in Bob's Family, LC. According to Bob's sister, each of the three children of Bob's parents has a 33% interest with Bob's parents each having 1/2 of a percent.
Bob was told by his dad that the Family, LC pays taxes on it's part then each of the members of the Family, LC has to pay taxes on each of their parts. Bob has no access to the monies of the Family, LC and has always accepted the explanation given to him by his father.
Bob has now married and is now starting to wonder why he and his wife are now paying taxes on all this phantom income. Bob is wondering what the benefit is to him and his family of Bob's Family, LC. The tax on all this phantom income is now reaching about 5K a year of additional income tax due. Bob and his wife together make about 70K a year at their respective jobs, the addition of the income he must report on his tax return pushes them over 100K in reportable income.
Bob and his wife feel that Bob's Family, LC should at the least reimburse them for the additional taxes due on the income they must report.
Bob's dad is about 50 years old, so Bob would expect his dad to live many more years. If this is about inheritance tax that might be due on a future inheritance, Bob feels it is unlikely he will benefit until he is well into his 70's. Yet this is costing Bob's new family thousands each year in tax.
Can anyone explain what benefit being a member of Bob's Family, LC, if the Family, LC should reimburse the members for all this tax on income he can't touch, how Bob can get a copy of the Family, LC's rules etc. or at least shed some light to this. Bob's father has failed to explain further about the Family, LC. BTW, it's never listed as an LLC, only as Bob's Family, LC.
Thanks so much for any and all information!!
What is the name of your state? Virginia
Here is the situation.
Bob is a young man from a fairly wealthy family.
Bob gets a K-1 from a Bob's Family LC (this LC was set up by Bob's father)with 21k of income. 17K of this income is passive and then there is 3k interest income and 1k of capital gain. This K-1 comes from Bob's father's accountant.
It states on the K-1 that he has 33% interest in Bob's Family, LC. According to Bob's sister, each of the three children of Bob's parents has a 33% interest with Bob's parents each having 1/2 of a percent.
Bob was told by his dad that the Family, LC pays taxes on it's part then each of the members of the Family, LC has to pay taxes on each of their parts. Bob has no access to the monies of the Family, LC and has always accepted the explanation given to him by his father.
Bob has now married and is now starting to wonder why he and his wife are now paying taxes on all this phantom income. Bob is wondering what the benefit is to him and his family of Bob's Family, LC. The tax on all this phantom income is now reaching about 5K a year of additional income tax due. Bob and his wife together make about 70K a year at their respective jobs, the addition of the income he must report on his tax return pushes them over 100K in reportable income.
Bob and his wife feel that Bob's Family, LC should at the least reimburse them for the additional taxes due on the income they must report.
Bob's dad is about 50 years old, so Bob would expect his dad to live many more years. If this is about inheritance tax that might be due on a future inheritance, Bob feels it is unlikely he will benefit until he is well into his 70's. Yet this is costing Bob's new family thousands each year in tax.
Can anyone explain what benefit being a member of Bob's Family, LC, if the Family, LC should reimburse the members for all this tax on income he can't touch, how Bob can get a copy of the Family, LC's rules etc. or at least shed some light to this. Bob's father has failed to explain further about the Family, LC. BTW, it's never listed as an LLC, only as Bob's Family, LC.
Thanks so much for any and all information!!