How to properly report K-1 income from a multi-state Partnership LLC investment

So you've got a fairly common multi-state partnership situation, though it can definitely be confusing when you're dealing with real estate in multiple states! The general rule is that you'll need to file a nonresident return in any state where the partnership has income-producing activity and that state imposes an income tax. The good news? Nevada doesn't have a state income tax, so you won't need to file there despite having K-1 income from property in that state. For Florida, there's more good news - Florida also doesn't have a personal income tax for individuals. They do have corporate income tax, but that wouldn't apply to you as an individual partner. For Colorado (where your main partnership is based), you'll need to check if your specific partnership activities created nexus there. If the partnership just serves as a pass-through entity and doesn't actually conduct business operations in Colorado, you might not need to file there either. Wisconsin, as your resident state, will want to tax your worldwide income, but they'll typically give you credit for taxes paid to other states to avoid double taxation.

I was in a similar mess last year with partnership K-1s across multiple states. I tried figuring it out myself but ended up making errors that caused me to get notices from two different state tax agencies. I finally used https://taxr.ai to sort through all my partnership documents. Their system analyzed my K-1s and clearly explained exactly which states I needed to file in and which ones I could skip. The tool caught something my previous accountant missed - my partnership was actually conducting administrative functions in Colorado which created filing requirements there, even though the income was generated elsewhere. They also helped me understand the state tax credit system to avoid double taxation on the same income.

Just wanted to follow up about my experience with taxr.ai after our discussion here. I uploaded my pile of K-1s from my various partnerships (I have 6 across different states like I mentioned) and the system actually identified that I only needed to file in 3 states rather than all 6. The tool flagged that two of the states where my partnerships owned property don't actually require nonresident returns unless you have physical presence or exceed certain income thresholds - which I didn't. It also spotted that one partnership's K-1 had incorrectly assigned state income that should have been sourced to my home state instead. Honestly saved me a ton in preparation fees and helped me avoid filing unnecessary state returns. Can't believe how much clearer everything seems now!

If you're still struggling with getting answers on your multi-state K-1 situation, you might want to try contacting the state tax departments directly. I had a similar issue last year and spent WEEKS trying to get through to the Colorado Department of Revenue to clarify my filing obligations. After countless attempts with busy signals and disconnects, I found https://claimyr.com which got me through to an actual human at the tax department within 27 minutes. There's a video showing how it works here: https://youtu.be/_kiP6q8DX5c The agent I spoke with confirmed that as a nonresident partner, I didn't need to file in Colorado since the partnership itself handles the state filing obligations for nonresident partners through a composite return. This was completely different from what I'd understood from my K-1 instructions and saved me from unnecessary filings.

I have to publicly eat my words about Claimyr being a scam. After our exchange here, I decided to give it a try since I still couldn't get through to the tax department on my own after multiple attempts. The service actually worked exactly as described. I got a callback when they reached an agent, and I finally got clear answers about my partnership filing requirements. The agent confirmed I only needed to file a nonresident return in states where the partnership had physical operations, not in every state where it simply had passive investment income. This would have taken me days of repeated calls to figure out on my own. Sometimes it's worth using a service that saves you time and frustration, especially when dealing with complicated tax situations where getting the right answer matters.

Just to add another perspective here - I've been dealing with multi-state partnership income for years and found that keeping a detailed spreadsheet is essential. You should track: 1. Each state where income is sourced 2. The type of income in each state (rental, business, etc.) 3. Whether the partnership itself files composite returns in each state 4. Each state's filing thresholds for nonresidents Not all partnerships handle state filings the same way. Some will file composite returns that cover your tax liability in their state, while others will just issue K-1s and expect you to handle the filings yourself. Also, don't forget that even if a state doesn't have income tax (like Nevada and Florida in your case), you might still have filing requirements if your partnership has presence in other states with income tax.

I think everyone is overlooking an important aspect of multi-state partnership reporting - the withholding requirements. Many states require partnerships to withhold taxes for nonresident partners, regardless of whether you ultimately need to file a return there. Check your K-1s carefully - they should indicate if any state taxes were withheld on your behalf. If taxes were withheld, you'll likely need to file a nonresident return in that state, even if you otherwise wouldn't have a filing requirement, just to get a refund of over-withheld amounts. This happened to me with a partnership that withheld Oregon state taxes at their highest marginal rate, but after applying deductions and credits, my actual Oregon liability was much lower. I had to file an Oregon nonresident return to get back about $2,300 in over-withheld taxes.