Guaranteed Payments

[davettax94]

Our two member LLC partnership agreed to reimburse each member for their Medicare Part B premium which was deducted from their social security monthly check.  Is this a qualified guaranteed payment and does it qualify as a guaranteed payment under the health insurance premiums section or is it simply a guaranteed payment for services rendered to the partnership?  Finally, why should each member on their personal return get a deduction for the health care premium if they had it paid for by the LLC?

[DianeC958]

The reimbursement for the Medicare Part B premiums is a health insurance cost and not a guaranteed payment.

If the partnership is deducting the cost of the premiums then the partners should not be deducting the amount on their personal returns.

The partners are allowed to deduct health insurance premiums on their personal returns that they pay for.

Link to Deducting Health Insurance Premiums 

[davettax94]

If what you say is true, then Turbo Tax Business needs to change their program.  In the Deductions section, the program asks for an entry under Guaranteed Payments and specifically requires that health insurance premiums be entered in a subsection under that category based on services provided by the partner(s).  In fact, there is no other place in the data entry for deductions where health insurance premiums is asked for or can be entered.  If I am missing something, please tell me where in Turbo Tax Business I can enter the health insurance premiums as a deduction for the LLC partnership which would then show that same amount as a part of the ordinary income for the partners.  Thanks you so much for the help on what I think is an important point for LLC partnerships.