k-1 Earnings

[Guest erepper]

It was my understanding that box 14, "Self-Employment Earnings (loss)" was used to determine plan benefits for the partners of an LLC as earned income. I have been questioned by the CFO of a client who is questioning why "distributions" in box 19 arent also included. All of the literature that I have seen (so far) refers to box 14. However, upon looking at the instructions for box 19 I can see why this MAY be included as earned income. Does anybody have any insight on this?

[K2retire]

I am a TPA, not an accountant, so my understanding of these details may not be precise enough for you. I am told that in some cases "guaranteed payments" can be counted as income. Not sure if that is the box 19 amount you mention.

IRS Publication 560 may provide more insight.

[Bird]

I think you have to ask specifically for "Self-employment earnings" and not let them make you guess. Schedule SE says to use K-1, Box 14, Code A when calculating SE tax, so that should be it, but I've seen different accountants report it differently (and the same accountants report differently year-to-year!).