Form 8825 - Reporting Guaranteed Payments (Form 1065)

If you want to associate rental activity with guaranteed payments, the rental real estate income must be reported on Form 8825 Rental Real Estate Income and Expenses of a Partnership or an S Corporation. Rental real estate income can be reported on Form 1065 U.S. Return of Partnership Income, page 1, Line 4 or Form 8825, Line 15 depending on how it is received. Guaranteed payments relating to this income will be reported based on whether the income is reported on Form 1065 or on Form 8825.

To report on Form 8825:

  1. From within your TaxAct 1065 return (Online or Desktop), click K-1 Wizard, then click Continue (on smaller devices, click in the top left corner of your screen, then click K-1 Wizard).
  2. Click + Add Schedule K-1 to create a new copy of the form or click Edit to review a form already created (desktop program: click Review instead of Edit).
  3. Click Quick Entry, and scroll down to Part III of the form.
  4. In Box 4 Guaranteed payments click the Circle next to Report guaranteed payments on Form 8825, Line 15 (desktop program: click the Checkbox), then close the window.

Note. If you reported guaranteed payments on Form 1065, Page 1, Line 10, this checkbox will remove them from that section.

Per IRS Instructions for Form 1065, U.S. Return of Partnership Income, page 13:

Reporting of rental activities. In reporting the partnership's income or losses and credits from rental activities, the partnership must separately report rental real estate activities and rental activities other than rental real estate activities.

Per IRS Instructions for Form 1065, U.S. Return of Partnership Income, page 32:

Line 3. Other Net Rental Income (Loss)

Enter on line 3a gross income from rental activities other than those reported on Form 8825. Include on line 3a gain (loss) from line 17 of Form 4797 that is attributable to the sale, exchange, or involuntary conversion of an asset used in a rental activity other than a rental real estate activity.

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