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Tax Law (Questions About Taxes)/Investor Revenue Reporting


I am new to a small organization that has disbursed Revenue income to several small investors. The history of reporting at year end has been either 1099Misc (in section 7)or a K-1 report (either was used last year with not very good record keeping of who got what). What is the correct reporting for these investors and when are K-1's due? We are a small S-Corporation. Fortunately - we will be buying out all of our investors this year. We use QuickBooks, and the prior accountant actually set a few investors as "employees" to provide direct deposit. It is a nightmare! I appreciate any assistance.Thank You in advance.

Accountants who do things like that should be fired and terminated and removed.

An Investor has contributed Equity to the corporation. The will get a K-1 for each and every year they are an investor. That means if you bought them out Jan 2013, they get a K-1 at the end of the year.

If the "investor" was merely a lender and gave a loan with interest and principal to be repaid, then the lender gets a 1099-INT for interest you paid him.

No investor or lender gets a 1099-MISC or W-2.

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Randall Klein, MBA, EA


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