K-1 Partnership has S/E earnings Box 14, but my client did not actively participate, "general partner" box checked

Forum|Forum|3 years ago
March 17, 2023
1 reply
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ProSeries Professional

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Best answer by sjrcpa

If she's a General Partner the accountant is correct. For SE tax purposes it doesn't matter if you participate or not.

If it's a General Partnership (rarely seen these days) there are no limited partners.

Just-Lisa-Now-

Intuit Community Champion

If he thinks the K-1 is wrong, he needs to contact the Tax Matters partner to ask the preparer to correct or justify the reporting.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

G

GretaAuthor

Level 7

My client called the accountant who prepared the 1065 and K-1. He told her that "all partners are always subject to S/E", so no amended K-1 is forthcoming. I am not an expert on partnerships, but although she is a 25% owner of farm that was recently inherited from her father, she lives far away and has not participated in running the farm in any way. Does that qualify her as a limited partner? If that box is checked, then she does not pay S/E taxes, just income taxes.

sjrcpaAnswer

Level 15

If she's a General Partner the accountant is correct. For SE tax purposes it doesn't matter if you participate or not.

If it's a General Partnership (rarely seen these days) there are no limited partners.

The more I know the more I don’t know.

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