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    #1

    1065 farm

    Established client is a rancher who "partners " with her son. Client is 82 years old and has always filed a schedule F. Her son also files a schedule F. As part of the farm transition plan client formed a partnership with son. Schedule 1065 (F) generates K-1 income. Problem: 82 year old client (who draws SS) doesn't want to pay SE tax, but son does.
    Short of filing as a 1120S is there a way? They would prefer to put all earnings as 'retained earnings' and show no income......
    any help greatly appreciated!
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    #2
    Right or wrong you can elect to have her not subject to SS. When electing each partner there is a choice as to what each partner's participation is... review her partner status when setting up her profile.
    This post is for discussion purposes only and should be verified with other sources before actual use.

    Many times I post additional info on the post, Click on "message board" for updated content.

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      #3
      I just reviewed the 1065 and apparently the election to not pay SS tax is only for LLC partnerships not General Partnerships.
      This post is for discussion purposes only and should be verified with other sources before actual use.

      Many times I post additional info on the post, Click on "message board" for updated content.

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        #4
        As far as "Retained earnings", not possible. T/P is always taxed on profits even if they choose to keep profits in equity without withdrawal of their portion.
        This post is for discussion purposes only and should be verified with other sources before actual use.

        Many times I post additional info on the post, Click on "message board" for updated content.

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          #5
          Would the partnership give the son a large enough guaranteed payment to reduce the mother's SE income to near zero? (You said the son does want to pay SE tax.)

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            #6
            Thank you for your responses BOBW and Lion. I think I'm on the right track now. It's great to have a resource like this! I owe you one!

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