K-1 comp

[Lori H]

Would you generally use the Ordinary business income Line 1 Part III or the Total to Schedule K-1 which generally has deductions and shows up in Part II section N when running the ADP and the def. of comp. has no exclusions?

[Bird]

No. If you look carefully at the definition of compensation for a self-employed, it almost certainly references Earned Income. If there are any employer contributions for the partner, they must be subtracted, as well as 1/2 of the self-employment taxes paid, Section 179 expenses, and unreimbursed partnership expenses the partner deducted personally. (OK, and oil and gas depletion, just for the record.)