Preparing Schedule B-1 in a 2017 Partnership

Technical topics regarding tax preparation.
#1
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Hi all,

I am preparing a 2017 Partnership with the following facts:

-Company A is owned 100% by an Individual
-Company A owns 75% of Company B

I am attempting to prepare schedule B-1 for company B. Part 1 is easy. For Entities owning 50% or more of the partnership, I show Company A owning 75% of Company B.

Part II is where I'm having an issue. Since an individual owns 100% of Company A, he therefore also owns 75% of company B. Am I required to list the individual as owning 75% of company B on Part II of Schedule B-1?

I reviewed the instructions form Sch B-1 and there are very limited, and don't answer this particular question.

Thanks in advance for any guidance.
 

#2
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ThatTaxGuy wrote:Am I required to list the individual as owning 75% of company B on Part II of Schedule B-1?


Yes, you'll list the individual as owning 75% in Part II of Sch B-1.

Constructive ownership rules of IRC 267(c) apply to Sch B-1, with the exception of 267(c)(3).
 

#3
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Thanks ManVsTax, that was my thought, although I still cannot find research dealing with this specific example (I have to put something in my workpapers).

Appreciate the response.
 

#4
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You may find what you're looking for in the Form 1065 instructions for Schedule B.

What type of tax entity is Company A?
 

#5
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I'll check out the instructions on Monday.

Company A is an S Corp
Company B is a parntership
 

#6
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Part I: List S Corp as owning 75%

Part II: List Individual as owning 75%
 


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