Hello,
Thank you for the screenshots. These are the exact areas that I described in my question.
According to the Instructions for the 1065, elected deferrals ("employEE" contributions) are supposed to be recorded on the 1065 so that they can show up on the K-1 under section 13 with a code of R. If I include those amounts in the "Member Retirement Contributions" section under "Compensation and Benefits" then it shows up accurately on the K-1.
For employER deferrals, I can enter it in the "Employee compensation and benefits" section under "Compensation and Benefits." These are deductible to the business.
However, the elected deferrals ("employEE") are not supposed to be deducted as Income (Loss) on Your Books because they are deducted on an individual's return, but on the Balance Sheet, it is showing that amount being deducted.
That said, am I supposed to include the elected deferrals ("employEE") in the total compensation of the employee and also include it under the "Compensation and Benefits" section, or do I subtract the retirement contribution from total compensation.
Ex: Partner A makes a total of $10,000. $5,000 is a cash distribution and $5,000 is deferred to retirement. In the Business Info/Partner Member Information section, do I list $10,000 as the Cash Distribution to Partner A and list $5,000 under the Federal Taxes/Deductions/Compensation and Benefits/Member Retirement Contributions? Or, do I list $5,000 for the Cash Distributions section and $5,000 for the Member Retirement Contributions?
