My multi-member LLC has no employees. Why is an ordinary business loss from Form 1065, schedule K, line 1 showing up as net loss for self employment on line 14a?

[db493]

My multi-member LLC only holds raw land with no income,and pays property tax on the land which results in a loss each year equal to the amount of the property tax paid.  The amount of this property tax payment shows up as a business loss on Form 1065, Schedule K, Line 1. This same amount is then transferred to Schedule K, Line 14a as "net loss from self-employment"  Since this LLC has no employees, why is self-employment part of the calculation, and how do I get rid of this if it is in fact incorrect?

[SherylSTaxExpert · Accepted solution]

If you are registered as a partnership , (and you are required to file on form 1065), you would be subject to self-employment taxes. K-1's include either the amount of self-employment profit or loss in box 14. Since you have a loss, your K1- box 14a would show each partners' share of that self-employment loss.

Please see the link below for more information on form 1065 and self-employment earnings and losses.

https://www.irs.gov/instructions/i1065sk1#idm140366837093328