I have read older threads that I could find on this subject and would like to revisit:
I have a MMLLC taxed as a partnership.
The only thing this partnership does is hold a 99% interest in another(operating) partnership. It accepts distributions from the other (operating) partnership once a month, and then makes distributions once a month to its members.
Are any of these members subject to SE tax on the pass through income from the operating partnership?
1. None of the partners have any personal liability. The LLC has no debt. The operating agreement prohibits contracts that would result in personal liability.
2. The LLC does have one managing member, who received a guaranteed payment. The powers of this managing member are very limited, and the operating agreement states that she does not have the power to contract with any outside parties.
3. None of the members participates for more than 500 per year.
Can anyone help me out? I'm finding proposed regs 1402, and a lot of opinions one way and the other. I don't think any of these partners/members are subject to SE tax except of course the guaranteed payment. All of the members have W-2 salaries in excess of $117,000 (over the SS limit) from other jobs.
I have a MMLLC taxed as a partnership.
The only thing this partnership does is hold a 99% interest in another(operating) partnership. It accepts distributions from the other (operating) partnership once a month, and then makes distributions once a month to its members.
Are any of these members subject to SE tax on the pass through income from the operating partnership?
1. None of the partners have any personal liability. The LLC has no debt. The operating agreement prohibits contracts that would result in personal liability.
2. The LLC does have one managing member, who received a guaranteed payment. The powers of this managing member are very limited, and the operating agreement states that she does not have the power to contract with any outside parties.
3. None of the members participates for more than 500 per year.
Can anyone help me out? I'm finding proposed regs 1402, and a lot of opinions one way and the other. I don't think any of these partners/members are subject to SE tax except of course the guaranteed payment. All of the members have W-2 salaries in excess of $117,000 (over the SS limit) from other jobs.