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LLC Earned Income


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Guest Pat Metallic
Posted

An LLC member receives guaranteed payments throughout the year and defers from those payments into the company's 401(k) plan. However, the member's portion of the LLC ordinary losses netted with these guarenteed payments renders a net loss for the year. Is earned income the net of the LLC loss and guarenteed payments or just the guaranteed payments when considering how much someone can defer?

Posted

For partners in a partnership, the answer is definitely the net of the two. I don't know why members of an LLC would be any different.

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