Thanks for the reply and I do appreciate the help. [-Please read Edit Update at bottom first-]
I agree with everything up to your 3 last sentences. So lets zero in on those sentences and how I could find another option. If I cannot use guaranteed pmts to pass through sporadic Ordinary Income to the partner that earns said income, then what other method in the IRS rules can I use? I've looked at the Draw and it doesn't fit my scenario either.
Or in essence how would I tell TT to setup the profit/loss structure and Profit Allocation agreements to accommodate such, but hopefully hold to 50/50 for the interest income (or loss if the pmts defaulted or stopped)?
To reiterate scenario, I and my Limited Partner (who does not actively participate in management) each previously owned 50% of the property. We sold the property to new owners and loaned them the principal, and all interest paid each yr on the principal is split 50/50 between us and K-1 passed to each and taxed as passive income on our personal 1040. Normally that's all there is too it.
Only once in awhile the owners cost me (not my limited Partner) extra time and effort to deal with their late monthly pmt or failure to pay their property taxes etc. The amount of said late fees has never been over $500 and usually less than that depending. The Limited Partner is fully aware of these fees that reflect regulations of the sales contract. And he agrees that I should keep all said fees to compensate me for work in these matters.
How can I channel the compensating Ordinary Income paid in these sporadic occurrences to me for having had to deal with it? And have all due SE taxable income shown on the receiving member's K-1.
[ Edit update 5 mins later],
Or maybe I should be understanding (correct if wrong) that each time this scenario occurs, I need to pay myself a guaranteed Payment for the full amount of said Ordinary Income for these matters. And that will subtract the amount of the Ordinary Income from the LLC total Profits and put Profits back to the normal profits to go 50/50 (i.e. the interest pmts). And would also put all SE taxable income in my K-1.
