The amounts shown on Schedule K-1 are your share of the partnership's income, deductions, and credits. Report each amount on the appropriate lines and schedules of your income tax return. The club's expenses for producing or collecting income, for managing investment property, or for determining any tax are listed separately on Schedule K-1. For more information about reporting your income from a partnership, see the Schedule K-1 instructions. Passive activity losses.
Rules apply that limit losses from passive activities.
If you have a passive activity loss from a partnership, you must complete Form 8582 to figure the amount of the allowable loss to enter on your tax return. No social security coverage for investment club earnings. If an investment club partnership's activities are limited to investing in savings certificates, stock, or securities, and collecting interest or dividends for its members' accounts, a member's share of income is not earnings from self-employment. You cannot voluntarily pay the self-employment tax to increase your social security coverage and ultimate benefits. Choosing to be taxed as a corporation.