Overview

Returns Where the Owners Bear the Tax

Flow-through entities, including S-corporations, partnerships, and multi-member LLCs, do not generally pay income tax themselves; income, deductions, and credits pass through to the owners, who report their share on their personal returns. That makes the entity return deceptively important, because an error or missed election at the entity level ripples directly onto every owner's 1040. C&M LLP prepares Forms 1120-S and 1065 with the precision this structure requires. We track each owner's stock or partnership basis and at-risk amounts, apply special allocations and §704(b) rules where partnership agreements require them, and model the §199A deduction along with reasonable compensation and self-employment exposure. Above all, we prepare clean, accurate K-1s, flagging basis limitations and distributions in excess of basis before they become a surprise.

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