Joined: 06 Nov 2011
Online Status: Offline Posts: 29
Posted: 08 Nov 2011 at 17:48 | IP Logged
There is a question from becker as following:
Guaranteed payment from services rendered to a partnership $50000, ordinary income from a S corp $20000. What amount of income is subject to self-employment tax? The answer is $50000 guaranteed payment?
I cannt understand this and what kind of income are subject to SE tax?
Joined: 05 Oct 2011 Location: United States
Online Status: Offline Posts: 155
Posted: 08 Nov 2011 at 23:29 | IP Logged
Guaranteed payments to partners are made without regard to partnership interests and they're seperately reported on FORM K-1 and fully taxable to the partner. Ordinary income from an S Corp is also reported to the shareholder on Form K-1 but is minds ownership interest.
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Topic: income subject to SE tax?
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