Your response appears to confuse the picture when looking at the original question facts.
- Based on your response, the top level entity is really the PE/commercial real estate company.
- What type of structure is the PE/commercial real estate company?
- I'm assuming a C corporation?
- When you say paycheck, I'm assuming you receive a W-2? (versus a guaranteed payment).
- Does the PE/commercial real estate company pay for your health insurance?
- Then the PE/commercial real estate company formed a Fund LLC (which you are calling the Main LLC).
- Now you are invested in the Fund LLC (main LLC) which owns an interest in a senior living center
- I am assuming the K-1 you received on line G, there is an "X" for other LLC member?
- I am also assuming that there is nothing on your K-1 Part III line 14?
- If those two assumptions (bullets 5 and 6) are accurate, then I would say you don't materially participate.
- Additionally, the specified services for health is defined as providing medical services by medical professionals directly to a patient by "physicians, pharmacists, nurses, dentists, veterinarians, physical therapists, psychologists, and other similar healthcare professionals".
- While the facts are still muddy for me, I don't believe my original reply changes unless bullets 5 and 6 are not accurate.
- Honestly, in my mind, since you are employed by the PE/commercial real estate company, the CFO of that company should be able to provide you with some direction; since you most likely are not the only employee invested in the Fund LLC. Having said that, sometimes structures happen, CFO may not be technically strong in tax, and may not be helpful. But I would ask the question since that individual has a much better understanding than trying to glean some facts in a forum.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
