Accountant-Man
Level 13
09-22-2023
05:31 PM
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Why does Ordinary income, line 1 of 1065 K-1, get taxed as S/E income even when it's a Limited Partner?
Do not check Material Participation.
Even zero as SE income still creates SE tax.
How to get it right?
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sjrcpa
Level 15
09-22-2023
06:37 PM
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Not always. Yes if they participate (work) in the business. No if they are a silent investor.
Are you preparing the 1065? Or dealing with a K-1 received?
The more I know the more I don’t know.
TaxGuyBill
Level 15
09-23-2023
07:06 PM
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@Accountant-Man wrote:
Even zero as SE income still creates SE tax.
Are you referring to line 14 of the K-1? That is what triggers SE tax.
Accountant-Man
Level 13
09-23-2023
10:59 PM
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Sorry, I had an identical entry on the SE earnings w/s. My mistake, it is ok.
** I'm still a champion... of the world! Even without The Lounge.
