Schedule K-1 (Form 1065) is a source document that is prepared by a Partnership as part of the filing of their tax return (Form 1065). After filing Form 1065, each partner is provided a Schedule K-1 by the Partnership. The K-1 reflects a partner’s share of income, deductions, credits and other items that the partner will need to report on their individual tax return (Form 1040).
Most of the items contained on a Schedule K-1 are entered on a specifically designed K-1 Input Menu in the program. Amounts entered will then pull to the appropriate form, schedule or line of the taxpayer’s 1040. Some items may have to be entered on other entry menus based on the item and/or the election that the taxpayer makes on how to treat that income, deduction or credit item.
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. See: Form 1040 - Schedule K-1 (Form 1065) - Heading Information
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.
To assist in the entry of a Schedule K-1 (Form 1065), review the Partner’s Instructions for Schedule K-1 (Form 1065) and any instructional information that the Partnership provided the partner with the K-1.
To enter a K-1 (Form 1065) in TaxSlayer Pro from the Main Menu of the Tax Return (Form 1040) select:
Income Menu
Rents, Royalties, Entities (SCH E, K-1, 4835, 8582)
K-1 Input - Select 'New' and double-click on Form 1065 K-1 Partnership.
If the Form 1065 – US Return of Partnership Income was prepared in the Business Program of TaxSlayer Pro, the Schedule K-1 (Form 1065) can be pulled to the 1040 for the partner. From the Main Menu of the Tax Return (Form 1040) select:
Income Menu
Rents, Royalties, Entities (SCH E, K-1, 4835, 8582)
K-1 Input - Select 'Pull' and double-click on Business Package. The program will then pull the Schedule K-1 into the K-1 1065 Edit Screen for your review.
NOTE: This is a guide on entering Schedule K-1 (Form 1065) into the tax program. This is not intended as tax advice.
Additional Resources:
Partner's Instructions for Schedule K-1 (Form 1065)
Schedule K-1 (Form 1065) - Heading Information
Schedule K-1 (Form 1065) - Income (Loss) Items
Schedule K-1 (Form 1065) - Deductions
Schedule K-1 (Form 1065) - Self-Employment Earnings (Loss)
Schedule K-1 (Form 1065) - Credits & Foreign Transaction Items
Schedule K-1 (Form 1065) - Alternative Minimum Tax (AMT) Items
Schedule K-1 (Form 1065) - Tax Exempt Income, Non-Deductible Expenses, Distributions & Other Items
