R-6981: Louisiana Statement of Owner's Share of Entity Level Tax Items (Revision 2024-01)
Louisiana · Louisiana LDR · Used for tax years 2024
Louisiana Form R-6981 reports an owner’s share of income, deductions, and other tax items from a pass-through entity that made the entity tax election. It separates amounts taxed at the entity level from amounts taxable at the owner’s level.
Who files this form
An entity that made the pass-through entity tax election must complete Form R-6981 for each shareholder, member, or partner who is an individual, estate, or trust for the tax year.
The entity must attach each owner's form to its CIFT-620 and give the owner a copy. Recipients must attach Form R-6981 to their IT-540, IT-540B, or IT-541.
What you'll need
For the entity completing the form:
- The owner's federal Schedule K-1.
- The entity's CIFT-620, including Schedule F and amounts apportioned or allocated to Louisiana and outside Louisiana.
- The entity's legal name, Louisiana revenue account number, and income taxable period.
- The owner's name and the last four digits of the owner's Social Security number or LDR account number.
For the recipient:
- The completed Form R-6981.
- Federal Form 1040 or 1041 and the required pro forma version used to calculate the exclusion.
- The applicable Louisiana return: IT-540, IT-540B, or IT-541.
- For individuals filing a nonresident return, the original and pro forma Nonresident and Part-Year Resident (NPR) Worksheets for IT-540B.
How to file
- Entities: Attach Form R-6981 for each applicable owner to the CIFT-620. Also provide a copy to each owner.
- Recipients: Attach Form R-6981 to your IT-540, IT-540B, or IT-541.
The supplied text does not give a mailing address or e-filing instructions.
Common mistakes
- Using federal Schedule K-1 amounts on the pro forma return. The instructions say to use the “Income (Loss) Taxable at the Owner's Level” column instead.
- Treating a loss difference as an exclusion. If the difference between the federal and pro forma amounts is a loss, add it to AGI for Louisiana purposes for individuals, or to federal taxable income for estates and trusts.
- Leaving out the nonresident worksheet. Individuals filing a nonresident return must include a pro forma NPR Worksheet that excludes items included in the entity's Louisiana net income calculation.
- Deducting an item twice. The instructions warn against including certain amounts already deducted at the entity level in the owner's deductions. For example, individuals must reduce their IRC Section 280C expense deduction on IT-540, Schedule E, by the amount shown in Part II.
Questions people ask
What is Form R-6981 used for?
It helps owners complete the pro forma Federal Form 1040 or 1041 required to calculate the exclusion for tax items included in the entity's Louisiana net income calculation.
Are dividends and interest taxed at the entity level?
The instructions state that dividends and interest are not taxable at the entity level and are taxable to the owner.
How is the owner's taxable amount calculated in Part I?
For each row, subtract the “Amounts Taxed at the Entity Level” amount from the “As Reported on Federal Schedule K-1” amount.
How are the column totals used?
Add each column's amounts from Parts I, II, and III. The entity-level column totals for all owners should equal CIFT-620, Line 1A. Each owner's entity-level total is also used in the “Total Income Passed Through” column on Form R-6982. The owner-level column total is taxable to the owner and does not qualify for the exclusion.