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@ejdtaxman wrote:

Client has a SME LLC.

She owns a 40% interest in a partnership. 

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Maybe I'm missing the obvious, but what is the "E" mean?  Is this just a Single Member LLC that is disregarded?

If so, the K-1 should be issued in the name of the individual and the SSN, not the LLC or the EIN.  The K-1 is entered like any other K-1 on the 1040.  It has nothing to do with Schedule C.

If the K-1 is issued to the name of the LLC and/or the EIN that belongs to the LLC, the K-1 is wrong and needs to be corrected.