Hello, this is Linda Keith. I am following up on a 60-minute webinar on global cash flow of tax returns. When you have multiple pass-through entities in the mix, there are several questions related to 1040 Schedule E that I would like to discuss. I want to read these questions to you because I made some bold statements in the webinar. Should we ignore the Schedule E income reported on AGI, or should we use the K1 to determine distributions and contributions? What is the actual cash flow from Schedule E income? Should we focus on distributions on K1 statements as cash flow from the entities? Well, we shouldn't ignore it completely. It provides a great roadmap, listing the LLCs, S Corps, and partnerships that need attention. However, I don't use the numbers from it to avoid double counting. Instead, I go either to the K ones or the full returns for a percentage analysis. We'll talk about how to choose which one in a moment. Do we utilize the Schedule E income reported on AGI? No, we should use the K ones or the source entities. What is the actual cash inflow on Schedule E? None, it doesn't list cash inflows. It only shows the share of taxable income from another entity. It seems you don't use AGI because it's not cash flow. Also, the numbers on the back of Schedule A cannot be used as cash flow either. So, should we be focusing on distributions on K1 statements as cash flow from the entities? Yes, or we can look at the full returns. We'll decide which one to use later. Now, moving on to the 1040 Schedule E page two questions. The issue of passive versus non-passive was briefly mentioned in the webinar, but let me provide more information. If you picture...
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Video instructions and help with filling out and completing Which Form 1120 C Passive
