Posted by JHyre in Ohio on April 09, 2002 at 06:46:26:
Guaranteed payments are treated as wage income, which is subject to SE tax. I would stop paying yourself that “wage”, or pay it to a related S-corp or LP…which could create passive loss issues for the LLC. I’d simply kill the guaranteed payment if the two of you are the only owners of the LLC.
John Hyre
LLC and SE tax – John Hyre, please help! - Posted by chill
Posted by chill on April 07, 2002 at 17:19:04:
My husband and I own rental real estate individually and pay no self-employment tax on that income.
We are also members in an LLC which owns rental real estate. My husband received a guaranteed payment for managing the rental of the property. Last year our tax software treated that payment as self-employment income. This year a different software says that no SE tax is owed (though we entered guaranteed payment from the K-1 in the same manner). Which is correct??
It does seem that if we don’t pay SE tax for income from rentals we own directly that we shouldn’t pay it just because we are doing the same thing within an entity.
Please advise.
Thanks