Tax
A guaranteed payment is a payment a partnership makes to a partner for services or for the use of capital, determined without regard to the partnership's income. It is reported on the partner's K-1 and is generally subject to self-employment tax.
A guaranteed payment is deductible by the partnership and taxable to the partner, unlike a distribution. Recording it as a distribution changes both returns.
A partnership pays a partner $6,000 a month for managing the business. The payments are guaranteed payments, reported on the partner's K-1.
Checked November 3, 2026. Public pages and tax rules change; confirm them before relying on them.