I'm sole-owner of an LLC which provides services to an LP of which the LLC is a GP (there are other LPs). Do gtd. payments from the LP to LLC go on Sch.C as gross income?

[TaxNovice2]

The LLC provides services to the LP and gets paid the guaranteed payments. Essentially, there are many partners in the LP but I'm responsible for running the operation full-time. I put my GP interest in an LLC to protect myself legally. So does the guaranteed payment from the LP to the LLC (through which it comes to me) go in Sch C or Sch E? If they don't go in Sch C., my Sch C. income will always be negative. Does this mean, that I can never use the business use of home deduction?

[Phillip1 · Accepted solution]

I am assuming that the LP provides a K-1 in the name and EIN of your LLC. If this is the case and the LLC has not elected to be taxed as an S-Corp, the K-1 will be reported on Schedule E and not Schedule C.

You will be able to claim and deduct your unreimbursed expenses from the LP.

See the following in regards to the home office expense:

You can enter home office expenses for your partnership on this screen, but you'll have to use an IRS worksheet to figure out your expenses, first.
We recommend using a worksheet from IRS Publication 587 Business Use of Your Home to figure out your home office expenses.
First, choose only one of these to fill out:
-The Worksheet to Figure the Deduction for Business Use of Your Home is useful for tracking all expenses related to your home office.
-The Simplified Method Worksheet calculates your home office expenses using the size of your home office and a fixed deduction of $5 per square foot when your home office is 300 square feet or less.
Once you've figured out the amount, you can enter it on this screen along with "Business Use of Home" in the description field.

To enter unreimbursed expenses, follow this path in TurboTax:

1. Go to the Personal category of TurboTax.
2. Next go to the Personal Income category.
3. Find the Business Investment and Estate/Trust Income.
4. Click start and update on the line for Schedule K-1.
5. As you enter the K-1, find the screen labeled Describe the Partnership.
6. Click on the option "I am required to pay supplemental business expenses on behalf of this partnership/LLC for which I am not reimbursed".
7. For home office expenses, continue to the screen labeled "Miscellaneous Supplemental Expenses".
8. Enter "home office expense" in the Description, and the amount.

[TaxNovice2]

It appears, then, that all of my expenses appear as just one line in Schedule E (as compared to the detail that would be found in Schedule C). Is that correct?

[Phillip1]

Yes.