Amending Schedule K-1?

The Schedule K-1 I rec'd for an LLC in 2006 is different than what I actually filed for on my 2006 return. The Schedule K-1 contains a greater business loss than initially reported on my 2006 taxes. Do I need to file an amended return or amended Schedule K-1? It did not affect my overall adjusted gross income.

Caren H is correct. If your loss was greater on the K-1 than what you reported to the IRS on your 1040, you are best served amending your 1040...even if your AGI remains unchanged.

Why?

Some business losses on the K-1 are passive. When you have more passive losses than passive gains, the excess losses are disallowed in the current year...but they carry over to the next year. This keep up until you have passive gains to offset, or until you exit the business. Amending your return to show more carry-over passive losses will help your tax situation eventually.

If the losses are not passive, there are other reasons why they won't lower your AGI (and therefore, lower your tax liability). Maybe they are causing a NOL situation. Maybe they are creating other types of carry-over (like disallowed business use of the home). Without seeing your tax return, I can't say for sure. I can say that any unallowed business loss carries over to the next year and is evenually useful to you. So, no matter what, I would amend your 1040 (you don't need to amend the K-1...the K-1 comes to you...if it needs to be amended, that is someone else's job). The only reason I wouldn't amend the 1040 is if the difference between what you reported as a loss is small compared to the pain of filling out and mailling in an amended tax return. The IRS will not get upset if the loss you reported on your 1040 is smaller than the K-1 loss. They only get upset when it is the other way around.

Good luck :)

If you did not prepare the K-1, then you do not amend the K-1.

Something must be wrong somewhere if a larger business loss did not affect your AGI - it should have made your AGI smaller, unless your AGI was already zero... In which case, your NOL would be larger - and I would think you would want to carry that forward...

But no - you do not have to file an amended return if the change does not increase the amount of tax you owe. The only time you would have to file an amended return is if you under-reported income - and as a result your taxes would increase.

You need to amend your personal tax return (1040) to reflect the correction. Be sure to submitt the corrected K1 with your 1040X.