There are different partner types allowed in the formation of a partnership, as allowed per IRS guidelines. A partner classification must be selected on each partner’s Schedule K-1 within TaxAct® to calculate the partner’s reportable items correctly. Below is an explanation of these partner classifications.
General partner – A general partner is a partner who is personally liable for partnership debts.
Limited partner - A limited partner is a partner in a partnership formed under a state limited partnership law, whose personal liability for partnership debt is limited to the amount of money or other property that the partner contributed or is required to contribute to the partnership. Some members of other entities, such as domestic or foreign business trusts or limited liability companies that are classified as partnerships, may be treated as limited partners for certain purposes.
LLC manager – A LLC manager is a manager of a limited liability company (LLC).
LLC member – A LLC member is a member of a limited liability company (LLC).
To select your partner classification within TaxAct and IRS Form 1065: