AliciaP1
Expert Alumni

Business & farm

Box 14 on your K-1 entries (all 3) are blank.  This is where Partners' Self-Employed Income is shown.  If you have verified that your K-1 entries into your 1040 return are correct, then you do not owe self-employment tax on any of your partnership interests.

 

Self-employment income on a 1065 excludes the following income:

  • Dividends on any shares of stock and interest on any bonds, debentures, notes, etc., unless the dividends or interest are received in the course of a trade or business, such as a dealer in stocks or securities or interest on notes or accounts receivable.

  • Rentals from real estate, except rentals of real estate held for sale to customers in the course of a trade or business as a real estate dealer or payments for rooms or space when significant services are provided.

  • Royalty income, except royalty income received in the course of a trade or business.

If your partnership reports income from sources other than these, there may be an error on the 1065 and the K-1s from that return.

 

Schedule SE-S shows the income from the Schedule C business.  The $1,000 tax is correct for that based on the entry to Schedule C.

 

@OldCarGuy

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