Company A (limited liability company) invests in company B (limited liability company). Company B send K1 to company A with ordinary business income. When Company B K1 is entered in Turbo tax for company A, it generates self employment income for partners on Company A. As this is passive income for partners of company A, should there be self employment tax?
When Company B K1 is entered
What boxes on the K-1 is the income reported in?
What does company B own that generates passive income? Rental property? Royalty property?
What all does company A own and what all does company A do to make money? If company A is the management agency for company B, then company A has earned income that is subject to the SE tax.