How do you exclude self employment tax earning on 1065 K-1 item 14a relating to schedule F (patronage dividends).

[sjrcpa]

If the farm income is SE income why wouldn't the patronage dividends also be?

[rodmcinerney]

All farm income is 1099-patr income with corrsponding expenses ie seed real estate taxes insurance etc. Taxpayers, partners are in late seventies and do not farm themselves. Partnership was formed as a LLC partnership.

[sjrcpa]

Did you check the box for Did not Materially Participate?

[sjrcpa]

So who is farming this then?

Why is the only income patronage dividends?

Why do they have seed expense?

[rodmcinerney]

Yes, I checked did not materiallly participated.

[rodmcinerney]

The farming is done by someone else on a 50/50 split of income and expenses. My clients do not farm.

[sjrcpa]

Then I question why you are reporting on Sch F. For an individual, crop sharing goes on Form 4835 and not Sch F.

[rodmcinerney]

I agree with what you are saying but this is a partnership return.

[sjrcpa · Accepted solution]

I got that. Maybe it should be reported on the rental schedule instead of Sch F?