I work full-time for an assisted living company which is owned by a private equity company. I have invested money in that private equity company. I'm having trouble figuring out how some of the K-1 questions apply to me.
The investment is structured like this: "Main LLC" invests in a bunch of smaller LLC's. Each smaller LLC is for a different commercial real estate investment. "LLC #2" is one of those investments. LLC #2 is a part-owner of the assisted living company where I work. (There is also a general partner investor.) LLC #2 is reported as a passthrough company on Main LLC's K-1.
Three questions:
1) When I enter the K-1 information from the LLC on TurboTax, do I mark that I "materially participated" in the business? I didn't do any work for LLC #2 or Main LLC, but I did work for a company the LLCs purchased.
2) TurboTax asks if the LLCs received income from "specified services," including health. Main LLC doesn't do any health care, and LLC #2 doesn't either, but they do invest in companies which are involved in health care. Would you say the LLCs "receive income from health care"?
3) Under "Describe the partnership" TurboTax asks me to mark any items "that apply to your investment," including whether I personally paid health insurance for myself or my family. I did pay a portion of our family's health insurance premiums - but that was as an employee of the assisted living company which is owned by LLC #2 (and Main LLC). I don't know if those health insurance premiums "applied to my investment" in the private equity LLCs.
