Can someone help me understand this structure?
Limited partnership(P1, P2, and C-Corp as general partner) owns a single member llc. The SMLLC performs service oriented work.
Income generated from the SMLLC is passed through to the LP. LP issues K-1 statements to P1, P2, and C-Corp. P1 and P2 never pay any SE taxes on the income generated by the services company? I can't understand how there is never any work performed by either P1 or P2 in this case. To me the SMLLC would have to issue a 1099 or w2 or something for the services being rendered.
Limited partnership(P1, P2, and C-Corp as general partner) owns a single member llc. The SMLLC performs service oriented work.
Income generated from the SMLLC is passed through to the LP. LP issues K-1 statements to P1, P2, and C-Corp. P1 and P2 never pay any SE taxes on the income generated by the services company? I can't understand how there is never any work performed by either P1 or P2 in this case. To me the SMLLC would have to issue a 1099 or w2 or something for the services being rendered.
