A partner's self-employment earnings (loss) may be affected by her share of ordinary business income (loss) and any guaranteed payments she receives. The impact of these amounts typically depends on the status of the partner. Which of the following statements correctly describes the effect these items have on the partner's self-employment earnings (loss)?

Question

Quizplus · Accepted Answer

General partners must include any guaranteed payments they receive and their share of ordinary business income (loss) in their self-employment earnings (loss). Because limited partners typically do not participate in managing the partnership, their share of ordinary business income (loss) isn't classified as self-employment earnings (loss). However, any guaranteed payments they receive are treated as self-employment earnings (loss).

A Partner's Self-Employment Earnings (Loss) May Be Affected by Her