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Fillable Form 1065 (Schedule K-1)

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)

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What is Schedule K-1 (Form 1065)?

Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc., is an IRS form for a partnership to report its partner’s share of income, deductions, or credits.

You may download a PDF copy of IRS Schedule K-1 (Form 1065) on the IRS website. But you may also electronically fill it out on PDFRun for your convenience.

How to fill out Schedule K-1 (Form 1065)?

Provide the necessary information in filling out Form 1065 IRS Schedule K 1. Read the instructions carefully, and make sure that all information you entered is true, accurate, and correct.

Part I - Information About the Partnership

Item A

Enter the partnership’s employer identification number.

Item B

Enter the partnership’s name, address, city, state, and ZIP code.

Item C

Enter the IRS center where the partnership filed its return.

Item D

Check Item D to determine if the partnership is a publicly-traded partnership (PTP).

Part II - Information About the Partner

Item E

Enter the partner’s social security number (SSN) or taxpayer identification number (TIN). Do not use the TIN of a disregarded entity.

Item F

Enter the name, address, city, state, and ZIP code for the partner entered in Item E.

Item G

Mark the appropriate item to determine the type of partner is the person you entered in Item E. You may select:

  • General partner or LLC member-manager
  • Limited partner

Item H1

Mark the appropriate item to determine the type of partner is the person you entered in Item E. You may select:

  • Domestic partner
  • Foreign partner

Item H2

Mark the appropriate box to determine if the partner is a disregarded entity.

TIN

If you marked the box, enter the partner’s TIN.

Name

Enter the name of the partner.

Item I1

Enter the partner’s type of entity.

Item I2

Mark the appropriate box to determine if this partner is a retirement plan (IRA/SEP/Keogh). Otherwise, leave it blank.

Item J

Enter the partner’s share of profit, loss, and capital. This item has two columns, namely the Beginning and Ending. Enter the appropriate amounts on these columns.

The amounts entered in this item are based on the partnership agreement. If the interest commenced after the beginning of the tax year of the partnership, the percentages that existed immediately after admission will be entered in the Beginning column.

But if your interest was terminated before the end of the tax year of the partnership, then the percentages that existed before it ended will be entered in the Ending column.

Check the appropriate box to determine if the decrease is due to the sale or exchange of partnership interest.

This portion may determine that you realized a gain or loss on the transfer or disposition of your interest.

Item K

Enter the partner’s share of liabilities in the following:

  • Nonrecourse
  • Qualified nonrecourse financing
  • Recourse

Use the total of the three amounts you entered to determine the adjusted basis of your partnership interest. Also take note that both you, as a partner, and the partnership must meet the qualified nonrecourse rules on this debt before including the amount shown next to the “Qualified nonrecourse financing” in your at-risk computation.

Check the appropriate box to determine if Item K includes liability amounts from lower-tier partnerships.

This item should show the share existed immediately before the total disposition if you terminated your interest in the partnership during the tax year.

Item L - Partner’s Capital Account Analysis

Enter the partner’s capital account of the following:

  • Beginning capital account
  • Capital contributed during the year
  • Current year net income (loss)
  • Other increase (decrease)
  • Withdrawals and distributions
  • Ending capital account

For the other increase line, attach an explanation for the said increase.

Your ending capital account as reported may not be the same as the adjusted tax basis in your partnership interest, as a partner’s adjusted tax basis in its partnership interest includes the partner’s share of partnership liabilities.

Item M

Mark “Yes” to determine if the partner contributed property with a built-in gain (loss). If you marked “Yes,” attach a statement. Otherwise, mark “No.”

Item N

Enter the partner’s share of net unrecognized section 704(c) Gain or (Loss). Enter the amounts in the Beginning and Ending lines.

According to the Form 1065 Schedule K 1 instructions, a partner will have allocated unrecognized section 704(c) gain or loss if:

  • The partner contributed property with a fair market value more than adjusted tax basis or built-in gain property;
  • The partner contributed property with a fair market value less than the adjusted tax basis or built-in loss property; or
  • The partnership has elected to revalue the property on its books to make changes in the fair market value of the said property.

Part III - Partner’s Share of Current Year Income, Deductions, Credits, and Other Items

Item 1

Enter the ordinary business income (loss).

Item 2

Enter the net rental real estate income (loss).

Item 3

Enter other net rental income (loss).

Item 4a

Enter guaranteed payments for services.

Item 4b

Enter guaranteed payments for capital.

Item 4c

Enter total guaranteed payments.

Item 5

Enter the interest income.

Item 6a

Enter the ordinary dividends.

Item 6b

Enter the qualified dividends.

Item 6c

Enter the dividend equivalents.

Item 7

Enter the royalties.

Item 8

Enter the net short-term capital gain (loss).

Item 9a

Enter the net long-term capital gain (loss).

Item 9b

Enter the collections (28%) gain (loss).

Item 9c

Enter the unrecaptured section 1250 gain.

Item 10

Enter net section 1231 gain (loss).

Item 11

Enter other income (loss).

Item 12

Enter Section 179 deduction.

Item 13

Enter other deductions.

Item 14

Enter self-employment earnings (loss).

Item 15

Enter credits.

Item 16

Mark the box to determine if the Schedule K-3 is attached. Otherwise, leave it blank.

Item 17

Enter the alternative minimum tax (AMT) items.

Item 18

Enter tax-exempt income and nondeductible expenses.

Item 19

Enter the distributions.

Item 20

Enter other information.

Item 21

Enter foreign taxes paid or accrued.

Item 22

Mark the box to determine if there is more than one activity for at-risk purposes. Otherwise, leave it blank.

Item 23

Mark the box to determine if there is more than one activity for passive activity purposes. Otherwise, leave it blank.

How to file Schedule K-1 (Form 1065)?

Schedule K 1 Form 1065 should not be filed with your tax return unless you are required to submit it. The partnership files the Schedule K-1 Form 1065 with the IRS. Your Schedule K-1 may only show the last four digits of your identifying number of your SSN for your protection. But the partnership has reported your complete identifying number to the IRS.

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