So would this mean that all the pass-thru income that comes on Schedule K-1 for S Corps will now be hit with this 2.9% tax?? That’ll just kill small businesses.
“So would this mean that all the pass-thru income that comes on Schedule K-1 for S Corps will now be hit with this 2.9% tax??”
Yes, and the same for limited partnership distributions to limtied partners. In fact, it gets worse than that. It applies even if you own stock in a big corporation or your retirement account owns it. At the end of the day, it is a tax increase on a lot of people, and not just “rich people”.