Practicing 1065s at the moment (these are scenarios). Question is; I have a partnership (2 individuals 50% each) who registered as an LLC with their state. I am filing out the K-1 worksheet for each partner on proseries and it asks if they are General or limited. If I click limited, page 4 schedule K of 1065 does not calculate SE tax on line 14a, but if I click General, then it does. My question is, if they formed an LLC as a partnership, are considered members or partners? Because if they are members, they are avoiding SE tax which doesn't make sense. I mean, I can manually enter the amounts on 14a on their own k-1, not the 1065 schedule K page 4, and im wondering if that is the work around? Or how should I go about doing this? Please help. Thanks.
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2 partners each with 50% are more than likely general not limited which is a separate consideration from the LLC member (which is under control of the state). If a description of duties is given and one does not have liability then they are a limited partner, meaning the protection provide by the LLC is really unnecessary for them but not the general partner. No?
"Dude, you are correct" Rapid Robert
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