Self-employment tax on rental income

[Nate 1]

I have an LLC which files a 1065 and I receive a K-1 that shows my rental income. I am actively involved in the business in that I choose tenants and hire repair professionals. Turbo Tax says that I must pay self-employment taxes, but elsewhere I have read that rental income is passive activity that is not subject to self-employment tax unless I am a real estate professional or provide some service to the tenants. Any guidance? 

[Anonymous_]

If you look at your K-1, is there a figure on Line 14 (Part III)? 

If so, that would explain the self-employment tax prompt from the program.

[Nate 1]

There is a figure in box 14, but it is zero.

[Anonymous_]

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@Nate 1 wrote:

There is a figure in box 14, but it is zero.

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That controls the generation of a Schedule SE. 

Are you entering this K-1 in the appropriate section as a K-1 from a partnership and not as a sole proprietorship on Schedule C?

[Nate 1]

Yeah, it's being entered as a K-1.

[Anonymous_]

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@Nate 1 wrote:

Yeah, it's being entered as a K-1.

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With a zero on Line 14 (or a blank Line 14), the self-employment statement has to be originating somewhere else.