K-1 & Pass-through Series: Credit a Guarantor with No Distributions?

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You’re reviewing K-1s and you hit a head-scratcher: The guarantor shows ownership… maybe even taxable income… but the distributions are zero.

So do you give them any credit in personal/global cash flow?

In this episode, Linda Keith and Dave Stauffacher break down what to look for before you decide “yes,” “no,” or “it depends:" Guaranteed payments vs. distributions (and why “guaranteed” is a misleading IRS word)

Why taxable income ≠ cash flow (and how that trips up underwriting)

What “no distributions” might actually signal: expansion, debt service, downturn, or discipline

When the K-1 isn’t enough and you need the full entity return to see what’s behind the curtain

How managers can coach newer analysts: when to follow the guideline… and when to ask better questions

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