CA 592 - Tom? Joan? Anyone?

[jasdlm]

Client has a rental in CA inside an LLC. Property Management Company withheld tax and submitted to CA using 592-B. I have completed CA 568, and the tax withheld is flowing through the K1 to each partner ($800 LLC Fee was paid by separate check). The way I read the instructions, the LLC needs to file 592. Is this correct? If so, i have to file for 2012, also (client 568 not done correctly - amended and need to pass-through withholding for that year, also).

1) The instructions say 'Nonresident Withholding Annual Return', but the 592 wants me to choose a quarterly due date. Instructions say it was due 31 Jan, but form choice is 15 Jan.

2) I can't make sense of the form. It says 'total withholding amount due', but nothing is due. I'm trying to get money passed through to the partners.

3) On the 'Total Income' on the Schedule of Payees, do I use gross income, or the net (which is negative) from the K1?

Please help!

Thanks.

[kcjenkins]

Why would the LLC need to file a 592? If nothing has been withheld by the LLC?

[jasdlm]

I had that same question, but someone from the FTB told me it was necessary. When I read the instructions, it appears that it might be necessary (in addition to the k1?) to pass through the withholding to the shareholders.

[kcjenkins]

Nope, guess they did not understand you. You said the wh is already flowing, so you are fine. The 592 is for when YOU are withholding, and paying in to the FTB. Which is what the Property Management Company did.

[jasdlm]

The following is from the Instructions to Form 592. The bullet is why I think I have to file the 592, but I can't figure out how to complete it in a method that makes sense for a pass-through.

A Purpose

Use Form 592 to report the total withholding

under California Revenue and Taxation Code

(R&TC) Sections 18662 and 18664. Use

Form 592-V to remit withholding payments

relating to Form 592. The amount of resident

and nonresident withholding tax to be withheld

shall be computed by applying a rate of 7% or

such lesser amount as authorized in writing by

the FTB. Get Form 589, Nonresident Reduced

Withholding Request, for more information.

Important:

• Form 592 is also used by pass-through

entities to flow through withholding credit to

their pass-through owners.

[jasdlm]

I just figured it out. Report on line 5. Sheesh . . . I'm not very bright . Says right on it "Enter amount withheld by another entity and being distributed". I was holding for the FTB when this light bulb came on. I can't believe I've been sitting on this for days when it's right on the front of the form.