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Hi and welcome to our site!Income reported on K1 (1065) box 1 "Ordinary business income" is subject of self-employment taxes. While some other income types - such as rental income or interest income - are not subject of self-employment taxes.Ordinary business income from K1 (1065) box 1 is NOT included into schedule C - but reported on Schedule E, line 28.
Okay - but when Sched C shows profit and 1065 shows loss, how is that reconciled to
Losses reported on K1 (1065) may be self-employment losses and as such will reduce other income subject of self-employment taxes.In additional to box 1 - Net earnings (loss) from self-employment is reported on K1 (1065) box 14 with code "A"
affect SE taxes?
Yes - if net loss from self-employment is reported on K1 (1065) box 14 with code "A" - that amount will go to Schedule SE,and will reduce other income subject of self-employment taxes.
Thanks - This is a first for me - your help is appreciated.