Schedule K-1
A tax document issued by partnerships, S corporations, estates, and trusts to report each owner's share of income, deductions, credits, and other tax items.
Detailed Explanation
There are three primary K-1 forms: K-1 (Form 1065) for partnerships and multi-member LLCs, K-1 (Form 1120-S) for S corporations, and K-1 (Form 1041) for estates and trusts. The K-1 reports the recipient's pro-rata share of ordinary business income, rental income, interest, dividends, capital gains, Section 179 expense, and various credits. K-1 income is reported on the recipient's individual return on Schedule E and other appropriate schedules.
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Learn about Business Tax PreparationRelated Terms
Form 1065 (US Return of Partnership Income)
The annual federal information return filed by partnerships and multi-member LLCs treated as partnerships, with income passed through to partners on Schedule K-1.
Form 1120-S (S Corporation Income Tax Return)
The annual federal income tax return filed by S corporations, which pass income, deductions, and credits through to shareholders via Schedule K-1.
Pass-Through Entity
A business entity that does not pay federal income tax at the entity level; instead, profits and losses pass through to owners who report them on their individual returns.
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