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Would a LP/Domestic Partner w/Guarantee draw be issued a W-2?

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  • Would a LP/Domestic Partner w/Guarantee draw be issued a W-2?

    Would a Limited Partner w/guaranteed draw be issued a W-2? The Partner K-1 did report on line 4 the Guaranteed Payments. What I have is what looks like a pay statement dated 12/31/2013 issued by the Partnership that has Current and YTD similar to an employee payment statement but has "Guar Draw", "Addl Draw" "Exprt Fee" "GuarBonus" then all those amts are totaled up. Under "Pay Recap" it has: Gross pay, reimbursements, non cash ($0), pre-tax (neg amt), taxes ($0), after taxes (neg amt) then net pay.

  • mastertaxguy
    replied
    Guaranteed payments reporting

    1. Not in my office.
    2. IRS instructions for Schedule K-1 for Partnerships, page 4. item 4, provides:

    Generally, amounts on this line are not
    passive income, and you should report them
    on Schedule E (Form 1040), line 28, column
    (j) (for example, guaranteed payments for
    personal services).

    3. TTB, pp. 5-5 has a chart which may be of some help.
    4. TTB, pp. 7-2 has a very nice chart showing where to report Guaranteed payments (Schedule E, line 28), column (j).
    5. TTB, pp. 20-2 has a chart showing where to report guaranteed payments at the partnership level.'
    6. TTB, pp. 20-6, bottom of page left column has a discussion about reporting guaranteed payments including an intersting "author's comment" top of the right column, pp. 20-6.

    7. Keep in mind that the partner is NOT AN EMPLOYEE of the partnership and thus, no W-2 would or should be issued.
    8. It does not matter if the partner is a limited, or general, partner, or an LLC member in a multi-membered LLC.
    Last edited by mastertaxguy; 10-09-2014, 10:15 AM. Reason: Typo, added item 8.

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