FAQs - Pass Through Entity

What is a Pass-Through Entity (PTE)?How do I receive an extension to file an Ohio pass-through entity return?How do I file payments for Pass-Through Entity and or Fiduciary Income TaxWhat is an investment pass-through entity?What is a qualifying investor?What is a qualifying investor?Who should file IT 4708 Pass-Through Entity Composite Income Tax Return, and who should file Ohio IT 1140 Pass-Through Entity and Trust Withholding Tax Return?Can a PTE file both an IT 4708 on behalf of nonresident individual qualifying investors and an IT 1140 for the remaining nonresident individual qualifying investors who have not elected to be included in the IT 4708? Should all investors be reported on Schedule E - Investor Schedule of the IT 1140 or Schedule VI - Investor Information of the IT 4708?Am I subject to IT 2210 interest penalty on underpayment of estimated tax if this is my first year filing an annual return?Can I apply my current year overpayment towards my future year tax liability?Can an individual investor file a 2018 IT 1040 when the investor has been included in a 2018 IT 4708?Is a PTE subject to filing the Ohio IT 1140 if all nonresident individual investors file IT 1040 individual income tax returns?Can I file multiple IT 4708 tax returns for the same tax year to account for a short period?If a individual qualifying investor is included in an IT 1140, is the individual required to file the IT 1040 Ohio individual income tax return?Why can't PTEs owned by nonresident individuals who file and pay the Ohio IT 1040 provide a written statement to the PTE agreeing the nonresident individuals have nexus and exempt the PTE from filing the IT 1140 or the IT 4708?If a nonresident individual invests in several Ohio PTEs, can the nonresident individual be included in an IT 4708 for some PTEs and included in the IT 1140 for other PTEs?A PTE may choose to file either an IT 4708 or IT 1140. Since actual payments can be transferred from one PTE return to the other for the same PTE, shouldn't the tax liability computed on both returns be the same? Can a PTE (PTE 1) filing the IT 1140, claim credit for amounts paid by another PTE (PTE 2) if PTE 1 is an owner of PTE 2? If a PTE originally filed an IT 1140 for a taxable year, can the PTE go back later and amend this IT 1140 for the same taxable year and file an IT 4708 in its place? Provide an example of a completed IT 4708 which sets forth an amount for a pass-through entity credit as part of the Total refundable business credits. Is PTE interest income taxable to Ohio if the individual investor is a nonresident individual? If a PTE’s interest income is also taxed by another state, can the nonresident investor claim a credit on the Ohio individual income tax return?What are Ohio's depreciation adjustments? Who is required to make these depreciation adjustments? How do I calculate my Ohio depreciation addback? How do I calculate my Ohio depreciation deduction? I failed to make the required addback in a previous year. Should I make the addback on my current year's return? I failed to make the required addback in a previous year. Can I still take the deduction in my current year's return? I performed the required depreciation addback in a prior year. I have since sold the asset that generated the depreciation prior to utilizing the subsequent depreciation deductions. Can I either accelerate the remaining deduction amounts to the year of the sale or reduce the gain I report for Ohio income tax purposes? I performed the required depreciation addback in a prior year. I have since sold my business and moved out of Ohio, but I still have additional years I could have taken the depreciation deduction. Since I have not received the total benefit of the depreciation for Ohio income tax purposes, can I accelerate the remaining depreciation deductions on my final Ohio return? I performed the required depreciation addback in a prior year. I do not have sufficient income to utilize the entire deduction to which I am entitled for this tax year. Can I use only the amount of deduction I need and carry forward the remaining amount for a future year? Are the Ohio Schedule A adjustments for I.R.C. §168(k) bonus depreciation and §179 depreciation expense included as a business income on the IT BUS?If the PTE is not subject to Ohio tax, what is the procedure to recover an amount erroneously paid by the PTE via IT 1140 UPC ? Why use the Ohio IT K-1?On the Ohio IT 1140 (Sch. II) and IT 4708 (Sch. II), PTEs must add back the qualifying investors' shares of expenses and losses from transactions between the PTE and its related members. Please explain the reason for the add-back.What is a "related member"? Can you provide an example?Should the wages of a nonresident investor of an Ohio S corporation who lives in Michigan and works in Ohio be included on IT 1140 and/or IT 4708 if the investor-employee owns at least 20% of the Ohio S corporation, or does the reciprocity agreement between Michigan and Ohio apply? If I own 20% or more of a Pass Through Entity and received compensation from that Pass Through Entity utilizing a PEO (Professional Employer Organization) for payroll, is the compensation reclassified as business income? How can an indirect investor, who is otherwise exempt from Ohio income tax, obtain a refund on an erroneous tax paid/withheld by an operating Pass-Through Entity? How can an indirect investor, who is otherwise exempt from Ohio income tax avoid the undue tax paid/withheld by an operating pass-through entity? What form should an investment pass-through entity file to pass its income and credits through to its investors?What form should a pass-through entity file to receive a refund of the refundable business credit(s) in excess of the calculated tax?Does the residency of the trustee determine the filing requirement for the trust when filing the IT 1041 Fiduciary Income Tax Return?Can a overpayment on a IT 1041 Trust/Estate be issued to the fiduciary or beneficiary?What are the Ohio individual income tax obligations for an estate?Do federal loss limitations affect my Ohio depreciation addback?Is the Ohio IT K-1 mandatory?What should happen after the Ohio IT K-1 is completed?What pass-through entity type should be listed at the top of each Ohio IT K-1 for a trust? Why isn’t there a check box for Ohio IT 1140 beneficiary? Why should a trust use the Ohio IT K-1? What information does a trust need to provide on the Ohio IT K-1?What depreciation information is needed?Is the Ohio IT K-1 useful for entities or trusts with only Ohio resident investors or beneficiaries?