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Guaranteed Payments qualify as "Earned Income"?


David Olive
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Client owns a 50% membership interest in an LLC being taxed as a partnership.  LLC had a loss on the year, however, the client received taxable income in the form of guaranteed payments.  This amount qualified as "earned income" and can be contributed to an IRA, correct?

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Is he reporting it as taxable income on his 1040 (or whatever schedule attached to 1040 it is this year I think Schedule 1 but don't quote me)?

Is he paying Self Employment Taxes on it?

Was it for services rendered to the Partnership?

If the answer to all 3 questions is yes, then you can use it as earned income for an IRA contribution.

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