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Old 01-06-2016, 04:52 PM
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Does K-1 Partnership income qualifies for EIC

We have small business which me and my wife material participate the day to day activity ( we work fully time in this business).
Since our income (on K-1) is not classified as passive do we qualify for the EIC?



Thanks in advance


Last edited by jaarso81 : 01-06-2016 at 05:04 PM.


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Old 01-08-2016, 03:20 PM
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Quote:
Originally Posted by jaarso81 View Post
We have small business which me and my wife material participate the day to day activity ( we work fully time in this business).
Since our income (on K-1) is not classified as passive do we qualify for the EIC?



Thanks in advance
it isearned income but it depends; Earned Income is income that is characterized by active actions designed to earn money.Depending on what the k-1 income, it can be either earned or unearned . For example, S Corp sch K-1 of 1120S reports only "Investment" Income and thus it is NOT and Earned Income.however,
income from partnerships of 1965, S corporations of 1120S, 1041 of trusts, and estates can only count as earned income if they are considered ?non-passive?.



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