How do I account for "backup withholding" from our broker.
Our broker name does not match the IRS name (we use the
acronym for broker) so they are now withholding. I am in
the process of getting the name changed at the broker but in
the meantime, I am getting backup withholding.

Thanks, for your help.

Gary

Gary Ordway wrote:
> How do I account for "backup withholding" from our broker.
 
You can now record backup withholding by selecting the 'expense' icon
on the Accounting / Accounts page and selecting the "Backup
Withholding" category.
 
https://www.bivio.com/my-club-site/accounting/accounts
 
Backup withholding recorded this way will be correctly added to the
club's 1065 and K-1s without any further action.
 
Paul Moeller
bivio, Inc.

Thank you very much for the ability to record backup
withholding on the tax forms. Our backup withholding amount
is recorded as a credit on Form 1065, Schedule K, Line 15f
and on Forms K-1, Line 15 (Q), which saves us from manually
recording them in those places. But, on our tax form in the
"Analysis of Net Income" on page 4, the backup withholding
amount has also been deducted from our gross dividend amount
on lines 1 and 2a (i.e., the net amount on those lines
equals gross dividend amount minus the backup withholding
amount). Is this correct?

Paul Moeller wrote:
> Gary Ordway wrote:
> > How do I account for "backup withholding" from our broker.
>
> You can now record backup withholding by selecting the 'expense' icon
> on the Accounting / Accounts page and selecting the "Backup
> Withholding" category.
>
> https://www.bivio.com/my-club-site/accounting/accounts
>
> Backup withholding recorded this way will be correctly added to the
> club's 1065 and K-1s without any further action.
>
> Paul Moeller
> bivio, Inc.

<<
But, on our tax form in the "Analysis of Net Income" on page 4, the
backup withholding amount has also been deducted from our gross dividend
amount on lines 1 and 2a (i.e., the net amount on those lines equals
gross dividend amount minus the backup withholding amount). Is this
correct?
>>

No, technically, it is not correct, but I wouldn't let that stop me from
filing the return as prepared. The information is correctly reflected on
the Schedule K and K1s, which are the determining documents for showing
taxable income.

As you say, the fact that bivio has implemented this feature saves
affected treasurers a lot of work in manually recording the credits on
the Schedule K and K1s. It was easier for bivio to implement this by
coding the credit as a deduction, so it does throw off the Analysis of
Income. In my years of tax practice, I have never found any agent who
made any use of that schedule.

Rip West
Saint Paul, MN