Skip to main content
Level 2
December 7, 2019
Solved

Passive income flows thru an s-corp to the individual owner.

  • December 7, 2019
  • 1 reply
  • 13 views

An S Corp is a silent partner in an active business and receives income that is considered passive due to lack of material participation.  The S-corp then issues a k-1 to the 100% shareholder that runs the S Corp.  Will the 100% shareholder claim the income from the k-1 of its s-corp as active or passive income.

This topic has been closed for replies.
Best answer by sjrcpa

Passive income leeps its character as it flows through flow through entities.

1 reply

sjrcpa
sjrcpaAnswer
Level 15
December 7, 2019

Passive income leeps its character as it flows through flow through entities.

The more I know the more I don’t know.
PhoebeRoberts
Intuit Community Champion
December 7, 2019
However, its characterization as active or passive is made at the 1040 level, not the 1120S level.