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Does LACERTE adjust the partners' 199A for their own specific guarantee payments?

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Level 1
last updated ‎December 07, 2019 2:58 AM

My partnership client has guarantee payments of widely disparate amounts between partners, depending upon the effort/services rendered each year.  I don't see LCT taking each individual partner's GPmts into account for their 199A QBI income shown on K-1 Box20Z. 


i do see a question previously ask, and answered by George4Tacks, but i don't understand how that applies to my situation.  do i need to manually calc and specially allocate the QBI to each partner in Lacerte?

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Level 8
last updated ‎December 07, 2019 2:58 AM

Its unclear how you expect the GP to alter QBI - GP are deducted by the partnership prior to determining the ordinary income in box 1.

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Level 8
last updated ‎December 07, 2019 2:58 AM

Its unclear how you expect the GP to alter QBI - GP are deducted by the partnership prior to determining the ordinary income in box 1.

View solution in original post

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Level 1
last updated ‎December 07, 2019 2:58 AM
i'm willing to be wrong  =]  i thought each partner's distributiive share of 199A QBI would not be based on their profit/loss%, but instead, an amount allocable to them adjusted for their own GPmts. My idea was to gross up the Line 1 income, allocate based on P&Loss%, then deduct each partner's own GPmt.  otherwise, it seems inequitable: the higher paid GP partner will be allocated line 1 income, which DOES include the portion of her own GPmt absorbed by the other partners' P&Loss%

i need to see an example of how IRS accounts for the G.Pmts in calculating the 199A deduction, passed thru to each partner  looking now at IRS website
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Level 1
last updated ‎December 07, 2019 2:58 AM

The concept of Guaranteed payments is that the partner that reciwvwed GP will get his money whether the business '/ partnership had a profit or loss.

 

So if your client has a loss, only one partner potentaillpy received GP while Partnerhsip Deducts.  The partner receiving the GP would pick up this as self employwmwnr income unless the partner is an SCORP member in an LLC

 

Pertnership deducts the GP on page of form 1065 and accounts rfor it on Sch K-1 so there's a deductions and offset income to pay portion of tax to IRS

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Level 15
last updated ‎December 07, 2019 2:58 AM

huh?

Former Chump... umm.... AllStar.
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Level 1
last updated ‎December 07, 2019 2:58 AM
i've been confusing Guarantee Pmts RECEIVED by the partnership with those PAID by the partnership; although it still doesn't seem equitable between the partners to me
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