On a 1065 K-1 if the person is in an active business (as opposed to for example a rental real estate business) there should be both an entry for net earnings from self-employment and separately gross income.  To fix your problem in the K-1 Worksheet on the 1065 you have to mark "General".  That's the only way for SE to activate.  It does not make them the General Partner, it just activates the SE.