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Visitor I

Partnership when one partner is an S Corp

When paying a partner that is an S corp, How is this payment classified?  It doesn't make sense that it would be a guaranteed payment because of the SE taxes.  Would it be on the K-1 Box 11 Code F which is other income (loss)?

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Catalyst V

Partnership when one partner is an S Corp

A person is not, and can not "be an S-Corp". The S-Corp is a separately taxable entity. While an owner of an S-Corp can be a W-2 employee of that S-Corp, the owner(s) of an S-Corp are required to take minimum distributions each year which is reported on the K-1. Now I'm not that knowledgeable on the K-1 stuff myself, but I do know that box 11 has nothing to do with distributions of any type (or lack thereof). It's strictly for a Sec 179 deduction on a depreciable asset of some sort, that is owned by the S-Corp or that was contributed to the S-Corp by an owner. Perhaps you referenced the wrong box number? I'm looking at the 1120-S K-1 at https://www.irs.gov/pub/irs-pdf/f1120ssk.pdf