Legal Resources

Tax Reform Frequently Asked Questions

Taxpayer has Subchapter S ordinary income from the K-1 (100% Ohio source) reported on federal Schedule E. Does it make any difference if the shareholder is a material participant or not?

No, the shareholder does not have to be a material participant. The income can be passive; to the extent it is business income and included in Ohio Adjusted Gross income, it may qualify for the deduction.