Ok ... so you have a sole prop that takes in income, pays expenses and deducts the "casual labor" (partnership) costs that are reported on a 1099-misc that the sole prop issues to the partnership. The bottom line profits on the Sch C cannot be passed thru ... they are paid out on a 1099 and expensed that can bring the Sch C bottom line to a zero.
The 1099 income is in turn reported on the 1065 and any expenses the 1065 pays is deducted at that level and a K-1 form for each partner is issued to every partner and included on their personal returns.
The K-1 is NOT entered on the Sch C ... these are totally separate entities ... do not try to "close the loop" which is probably what is confusing you. Don't make this any more complex than the sole prop paying the partnership.
