Why doesn't the percent of ownership on the Maryland K-1 match the percent of ownership shown on the Federal K-1 forms?
The Federal Tax printer determines member's ownership percentage the same way the Member status report does in myICLUB reports page; it checks each member's number of units vs. the total units in the club.
The Maryland state printer calculates percent of ownership by looking at each member's portion of distributed earnings shown on the end of year Allocation report, and divides that by the total earnings.
These figures will usually be fairly close, since most member's percent of ownership doesn't change too much during the year. However if your percent of ownership changes enough, the calculation that the Maryland state printer does, will give a different percent of ownership than the Federal return.
These are both valid methods for calculating percent of ownership, so it's OK if the state and Federal returns show a different percent of ownership.
Last Updated: 05/30/2023