IRS Schedule K, also known as Schedule K-1. Schedule K-1 is a federal tax document used to report the income, losses, and dividends of a business' or financial entity's partners or an S corporation's shareholders. The Schedule K-1 document is prepared for each individual partner and is included with the partner’s personal tax return. An S corporation reports activity on Form 1120S, while a partnership reports transactions on Form 1065. There have 5 distinct forms for businesses:
Schedule K-1 (Form 1041): To report a beneficiary's share of an estate, including income, credits, deductions and profits. Its full name is “Beneficiary’s Share of Income, Deductions, Credits, etc.”
Schedule K-1 (Form 1065): Members of a business partnership use to report their share of a partnership's profits, losses, deductions and credits to the IRS.
Schedule K-1 (Form 1065-B): Instead of Form 1065.
Schedule K-1 (Form 1120-S): It’s prepared by a corporation as part of the filing of their tax return. After filing Form 1120S, each shareholder is provided a Schedule K-1 by the corporation.
Schedule K-1 (Form 8865): Partner's share of income, deductions, credits, etc. (For partner's use only).
The actual Schedule K-1 consists of three parts:
Part I - Information about the Partnership. This section contains basic information about the partnership such as its Name, Address and if the Partnership is a Publicly Traded Partnership. If the K-1 is from a Publicly Traded Partnership the PTP box will be marked which may affect the treatment that certain items reported on the K-1 will receive on the partner’s tax return.
Part II - Information about the Partner. This section contains information about the partner and their investment in the partnership. Specifically, this section identifies whether the partner is a general or limited partner, reports the partner's share of profit, loss and capital and whether the partner’s share of liabilities is recourse or non-recourse.
Part III - Partner’s Share of Current Year Income, Deductions, Credits, and Other Items. This section is used to report the partner's share of any of the partnership's Income, Deductions, Credits, etc.
Purpose of Schedule K-1
The partnership uses Schedule K-1 to report your share of the partnership's income, deductions, credits, etc. Keep it for your records. Do not file it with your tax return unless you are specifically required to do so. The partnership files a copy of Schedule K-1 (Form 1065) with the IRS.
For your protection, Schedule K-1 may show only the last four digits of your identifying number (social security number (SSN), etc.). However, the partnership has reported your complete identifying number to the IRS.
Although the partnership generally isn't subject to income tax, you may be liable for tax on your share of the partnership income, whether or not distributed. Include your share on your tax return if a return is required. Use these instructions to help you report the items shown on Schedule K-1 on your tax return.
The amount of loss and deduction you may claim on your tax return may be less than the amount reported on Schedule K-1. It is the partner's responsibility to consider and apply any applicable limitations.
This collection of PDF templates we have for partners to report the share of income, credits, deductions, and more. Each template is uniquely to be issued by a partnership to each partner involved in business. Our PDF Reader Pro, the PDF Editor is more than capable enough of allowing anyone, even those without prior experience, to design professional looking PDFs.
* The free templates above are provided for reference only, for all legal matters, you should always talk to a professional.
After downloading the free template, if you need to fill in it or modify the content of the template, you may need a powerful PDF editor. Using PDF Reader Pro, you can add your own details and use these templates to design for your own needs, editing the PDF more conveniently.
Download the form and fill it out using PDF Reader Pro. Click the button "Free Download" to download the app.