Knowledge Base

11736: 1065 - Line 14c Gross Nonfarm Income

1065 Partnership

Box 14 of the partner’s K-1 displays an entry C showing profit before deductions. Gross income from line 3a is going to line 14c on the K and then to the K-1 entry. How is this number calculated?

The amount on line 14c is non-farm income.  It is needed for the partners to figure their net earnings from self-employment under the nonfarm optional method on their 1040 returns.  In the past this line was not calculated and the preparer had to enter the amount.  The amount is now calculated as follows:

  • Line 8, Total Income, Page 1, Form 1065 (divided by ownership percentage of general partners vs limited partners)
  • plus Line 3a, Other gross rental income (loss), Form 1065, Page 4, Sch. K
  • minus Form 1065, page 1, lines 5 and 6

for these type general partners: individual, partnership, nominee individual, nominee partner or LLC member/managers. Amounts allocated for limited partners are not included on 14C.  

You may override this entry on the Schedule K screen in the software.

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