Schedule k1 loss not passing through

[Afoster94]

Good Morning, I’ll start off by saying I am still under the family Standard deduction for income. My federal refund was near 7000 other self employment income, property tax credit (100 percent disabled vet) and I also own a fitness center (last to receive the k1) as soon as I entered my k1 for the gym which reported a loss my refund dropped 3000. I did have distributions of 10k but the income loss was -7000. Why would this happen? Is it because for some reason the loss isn’t moving over to me? Why would it affect my refund I’m any way even if I’m under standard deduction. Thanks

[dmertz]

I assume that this is a Schedule K-1 (Form 1065) from a partnership.  Perhaps the Schedule K-1 is reporting positive income from self-employment that is subject to self-employment taxes (code A in box 14) despite a loss in business income and what you are seeing is the change in your refund as a result of the added self-employment tax.

[Afoster94]

Code a in box 14 is (7725) 

[Afoster94]

I am 32.5 % partner

Box 14 a (7725)

              C 44,114

box 18 b 5263

              C 517 (meals)

Box 19 a 10,208

box 20 z

   OBI  (7725)

W2 wages 1437

ubi 72399

[dmertz]

$7,725 code A in box 14 only explains part of it.  SE tax would only be $1,192.

Odd that the amount with code A is less than the amount with code C; the code-A amount would typically be the sum of code-B and code-C amounts.  If the income is entirely from farm or entirely from non-farm, code-B and code-C amounts are usually left blank by the preparer of the Schedule K-1.

[Afoster94]

The 7725 is in parenthesis () it is a loss. -7725

[dmertz]

I see, then that wouldn't explain it.  There is no SE tax on that loss.  You didn't mention any amount in box 1, but if there is an amount in box 1, that amount added to your income.  Otherwise, I have no idea why adding the Schedule K-1 would reduce your refund.

I suggest comparing Form 1040 with and without the Schedule K-1 entered.

[paulollivier]

I am having the same issue with this year's refund. 

[AliciaP1]

Can you clarify what your issue is specifically?  This is an old thread.

@paulollivier