Should partnership Guaranteed income be included in partnership distribution?

Posted on 13. May, 2011 by charmy in Home Income System Questions

Question by Kenneth B: Should partnership Guaranteed income be included in partnership distribution?
Schedule K-1. A musician Partner receives payment for services as a musician. Using Turbo tax this amount is input on line 14 as a Guaranteed Payment. This amount is also included in the Partnership income and this is part of the amount on the line 19 as part the partnership Distribution. This appears to tax the partner twice for the same income as he must report both the Guaranteed Income and Distribution.

Best answer:

Answer by taxreff
You are doing something wrong.

Guaranteed payments are deducted from partnership income on a 1065. They are then shown on the individual partner’s K1 on the line for guaranteed payments. That treatment ensures that SE tax for quaranteed payments is charged only to the individual partner.

You may be in over your head on this. I would recommend that you have the 1065 and your 1040 professionally prepared.

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Tags: distribution, GUARANTEED, Included, income, Partnership, Should

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