Question

Tristan is a general partner in a partnership; his share of ordinary income was reported in box 14 of Schedule K-1 (Form 1065). Which of the following statements is TRUE?
His ordinary income from the partnership is not subject to self-employment tax.
His ordinary income from the partnership is subject to self-employment tax.
The amount of income reported in this box will be taxed at the rate that applies to long-term capital gains.
Tristan is considered an employee.

Answer 1

His ordinary income from the partnership is subject to self-employment tax.

Explanation: General partners are treated as self‑employed. The amount reported in box 14 of Schedule K-1 (self‑employment earnings) is used to compute self‑employment tax on Schedule SE. Partners are not employees, and ordinary partnership income is not taxed at long‑term capital gains rates.