1040-US: Self-employment income calculation for general partners and LLC member-managers

Alerts and notices
Leave feedback

Internal Employees: Submit feedback

Contact information (optional):

Leave this blank:

Please tell us how we can make this information more helpful.


Characters left:

Change to CS Support service hours

Our Support department is closed on [[date]]. However, limited UltraTax CS phone support is available on that date from 9 AM - 5 PM ET due to the approaching deadline.

Links to our most popular tax processing topics are available in the Alerts and notices section on the right side of most pages.

Question

How is self-employment income affected by entries in the related K1 screens for line 1, farm partnerships, and line 2, nonfarm partnerships, on Schedule SE?

Answer

For general partners and LLC member-managers, the tax application uses the amount you entered in Screen K1-4 in the Net earnings (loss) from self-employment field and reduces it by auto expenses, home office expenses, depreciation and section 179 expense, depletion, unreimbursed partnership expenses (entered in Screen K1-6), employee business expenses from Form 2106 with a special occupation code 4, and other expenses entered in Screen K1-3 in the Other deductions field.

Conversely, for limited partners and other LLC members, these separately stated partner expense items will not reduce amounts entered in the Screen K1-4, Net earnings (loss) from self-employment field.

The Net Earnings from Self-Employment Worksheet provides a comprehensive audit trail of the calculation.

Note: Schedule K1 expenses included in the calculation of net self-employment earnings may be further limited by basis and at-risk calculations.

Related topic: Schedule SE FAQs (1040)

Share This