Distributions from a partnership to partner's HSA?
Anyone know how to actually report this?
In: https://www.irs.gov/pub/irs-drop/n-05-08.pdf
I am seeing these do not count as deductible expenses of the partnership (i.e., they are distributions, as opposed to an employer's payment to an employee's HSA), BUT they are NOT included as partner's net earnings . . .and therefore escape the S.E.
"The contributions are reported as distributions of money on Schedule K-1 (Form 1065). These distributions are not included in the partner’s net earnings from self-employment under section 1402(a) because the distributions under section 731 do not affect a partner’s distributive share of partnership income or loss under section 702(a)(8). The partner, if an eligible individual as defined in section 223(c)(1), is entitled under sections 223(a) and 62(a)(19) to deduct the amount of the contributions made to the partner’s HSA during the taxable year as an adjustment to gross income on his or her federal income tax return."
But how does one actually do this within ProConnect?
The 1065 doesn't change . . . the funds count as a distribution.
But how do we hand-edit the K-1 . . . to make that distribution to the partner non-taxable? Would it be under the "Schedule K-1 Miscellaneous" section?
