Total gross income
One owner (shareholder):
Sam’s owner’s basis
Company A is in a partnership with another LTC.
Calculate the non-allowable deductions for Sam:
Box 3 is Sam’s non-allowable deductions this year. The amount in Box 3 ($4,500) is shown at Box 24O.
Box 5 is Sam’s non-allowable deductions to carry forward. The amount in Box 5 ($4,500) is shown at Box 24R.
Company A’s IR7L would look like this:
Sam’s Individual income tax return (IR3) Question 19 would look like this:
Sam’s adjusted LTC income is in effect calculated by subtracting his allowable deductions ($5,500) from Company A’s gross income ($6,000) = $500.