club_cafe: Reporting Nonqualified Dividend on 1065 Return

iras1 on

In a message dated 2/3/2006 7:39:46 A.M. Eastern Standard Time, mduke@bivio.com writes:

Our investment club owns a REIT (WRI), so our dividend is
"nonqualified". I have completed our 1065 and K-1's using
bivio, and it looks like that dividend is showing up as a
"short term" on the forms, when our brokerage statement
shows it as a "long term" gain. Is this a problem?

Other than paying more tax than you need to...no. If the IRS gets around to document matching the partnership returns, it may generate a letter. It looks to me like you haven't made the necessary adjustments to your periodic REIT distributions. You need to reclassify each payment into ordinary dividend, long-term capital gain, return of capital, and/or Unrecaptured Sec. 1250 gain. This information generally isn't known until you receive your 1099s.

Ira Smilovitz

Sharon Marmaduke on

Thank you. I corrected the orginal dividend postings per
the brokerage statements, and redid the tax return. It is
now showing the corrected amounts. Sharon

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