Join tax expert Kelsey Head, a partner at Head Tyler LLP with nearly two decades of experience, as she demystifies the K-1 tax form for real estate investors. She stresses the need to verify your personal details immediately upon receipt to avoid future headaches. Kelsey clarifies the link between cash received during a sale and income reported on the K-1, addressing common confusion. Plus, she reassures late filers that delays won’t raise audit concerns. Reach out to her for further tax guidance, but expect longer response times during peak season!
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volunteer_activism ADVICE
Verify K-1 Information
Verify K-1 information like name, entity, social security number, address, and EIN upon receipt.
This can prevent issues later and save time during tax season.
volunteer_activism ADVICE
Timely Entity Changes
Notify operators of any entity changes by January 15th.
Making changes later involves a complex process due to lengthy tax returns.
insights INSIGHT
Cash Distribution and Income
Cash distributions trigger income recognition due to property sale gains.
Consult a tax advisor for clarification to avoid surprises during tax season.
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Are you a real estate investor who's puzzled by the K-1 form? In this episode, we've got you covered! Our guest, Kelsey Head, a tax expert with nearly two decades of experience, breaks down everything you need to know about the K-1 form and how to make the most of it.
Kelsey emphasizes the importance of verifying personal information on the K-1 as soon as it's received. She points out that checking the basics like name, entity, social security number, address, and EIN can save a lot of time and hassle down the line. She also highlights the significance of ensuring that contributions and distributions are accurately reflected on the form.
We discuss the common confusion that arises during the sale year when LPs see a large amount of income reported on their K-1s. Kelsey clarifies that receiving cash from a sale does result in income because it's tied to the gain from the property sale.
Another concern for investors is the timing of filing their tax returns, especially if they're waiting on their K-1s. Kelsey reassures listeners that filing a few weeks after the April 15th deadline is not an issue from an IRS standpoint and that there's no correlation between late filing and increased audit risk.
For those seeking further tax advice or who have questions about their K-1s, Kelsey is available via email at khead@headtyler.com, although she did mention that response times might be slower during the busy tax season. Take advantage of her expertise and ensure you have all the information you need for your real estate investments.
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