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system
multi-state k-1 earnings to s-corp
user
i'm not sure why you think that it matters that the distribution goes to an s-corp vs an individual tax payer. you seem to think it has any relevance to your question, but it doesn't. it only confuses your readers. the situation is like this: llc x is deriving income in state #2. it has two members (i and s) residents of state #1. members i and s pay all their taxes to state #1, and don't pay taxes to state #2. state #2 audited member i and that member now needs to pay back taxes and penalties to state #2 on income derived from that state. your question: does that mean that member s should be worried, since that member was essentially doing the exact same thing as member i? my answer: yes.
assistant