Taxes 101 What is a Schedule K-1 Form? Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by Published Jan 3, 2011 - [Updated Jul 8, 2019] 3 min read If you are an owner of a partnership, LLC, S-corp, or other entity that passes through taxes to its owners, in most cases you will receive a K-1 form each year. The K-1 is prepared by the entity to distribute to owners/shareholders to outline their portion of the income, loss, and deductions. Similar to a 1099 form received that highlights contractor income, you do not have to file the K-1 with your personal income tax return. Instead, you use the data on the form to fill out portions of your personal tax return. Preparing a K-1 For Shareholders While a K-1 form is easy if you’re just the recipient needing to record income or losses, the process is a bit more detailed for owners of an S-corp, LLC, or partnership who are responsible for distributing the K-1 forms to members. Not only do you need to report net profit or loss, but some financial data must be tracked individually. The S-corp or partnership must report certain income and expenses separately from the net profit or loss amount. These income and expense items retain their tax characteristics when passed-through to the shareholder, and are subject to the limits and tax rates on each shareholder’s personal Form 1040. Separately stated items are the following: Section 1231 gains and losses, Net short-term capital gains and losses, Net long-term capital gains and losses, Dividends eligible for the dividends received deduction (if a shareholder is a C-Corporation), Charitable contributions, Taxes paid to a foreign country, Tax-exempt interest and related expenses, Investment income and expenses, Amounts previously deducted, such as bad debts, Real estate income and expenses, Section 179 deductions, Tax credits, and Non-deductible expenses, such as 50% of meals and entertainment expenses. In addition, you must send out your K-1 forms to shareholders by March 15th. The Unexpected K-1 Obviously, if you’re an active member in a partnership or other business that regularly issues K-1s it will come as no surprise when you receive one each year. But there are situations where you may appear to get a K-1 out of the blue, and this can throw you for a loop. When this happens it’s almost always due to an investment in an ETF or fund that’s operating as a limited partnership. This isn’t always obvious to a regular investor, but buying shares of a commodity fund may in fact make you a part owner of a partnership. That means at the end of the year you’ll receive a K-1 outlining your share of the partnership’s profit or loss. This can come as quite a surprise for a new investor. One way to tackle this issue is to hold your ETFs or other investments that are limited partnerships inside an IRA. You’ll still get a K-1 at the end of the year, but the taxes are still deferred and it won’t require any additional tax calculations on your end. If you’re holding these in a taxable account, though, it’s a good idea to use good tax preparation software that will guide you through the process. Here’s what Forbes has to say about how TurboTax handles K-1 forms. Previous Post How is Your Retirement Savings Taxed? Next Post How to Adjust Your Tax Withholding for the New Year Written by More from 168 responses to “What is a Schedule K-1 Form?” « Older Comments Newer Comments » My K-1 shows $135 for Part 14.H ” Other Information “. Also described as Foreign Gross Receipts and Expenses. Where does this go, if anywhere, on the Form 1040? Reply I recieved additional k-1’s after i filedcmy return. What am i required to do now? Reply Hi Chris, If your tax return was already accepted you would amend your tax return and add the K-1 info. If your return ends up not being accepted by the IRS, you do not have to amend. You can just fix your tax return and add the K-1s. Thank you, Lisa Greene-Lewis Reply Thank you..sorry one more. It was accepted…so i amend before filing deadline or i can do it anytime later in the year? I created an LLC this past year for real estate investment. So for 2011, we have losses on our K-1’s. It appears that loss is not affecting my personal taxes like I thought. Do I not get a deduction? Or does that loss ultimately carry over to 2012 when I ultimately start getting rental income? Reply Hello Lisa. Today I just learned I will be receiving a K-1 for 2011 interest and dividend income I inherited from a bypass trust. My husband and I have already just started our 2011 personal income taxes using Turbo Tax Deluxe. Does this version of Turbo Tax include questions and a place for K-1 income? I’m hoping we won’t have to purchase a second version of Turbo Tax. If the Deluxe version won’t work, can the K-1 “upgrade” be downloaded over the internet? Reply How do you enter a State K1 form in Turbo Tax? Reply If I work for a law firm and have to file in multiple states (4) and get a k1, which tax program should I buy? Reply I was getting about $3,300 back in federal until I entered my k-1 (which shows a loss of 4123); this changed it to under $1700. Can you explain why this is? Reply I had an investment in rental property held in my IRA for which I received a K-1. There was a final disposition of the property and a large section 1231 loss. Can i deduct this or is it not deductible because it was held as an alternative investment in my IRA? thank you Phil Reply Hi Sandi, I receive K-1 this year and my wage was report in box 10. I entered this in TurboTax but it was not add up to the total of my income ( I also have w-2 from another job). Do you know how i can report this income as my wage but i didn’t receive anything else except k-1 from my employer. Thank you Loan Reply Hi Loan, Box 10 of the K-1 is a net section 1231 gain, which would be reported on a different line from your W-2 income so it may be correct. Please double check your entries. If you still need assistance, please speak to one of our live tax experts via phone or chat. Thank you, Lisa Greene-Lewis Reply Hi, My husband is executor for his dad’s living trust. The trust has been distributed. We had a small amount of dividend income and interest income. Can I create the return for the trust and the K-1s for his siblings using turbotax? Reply Hi Sandi, Yes. In order to create the tax return for the trust you need to use TurboTax Business which will create the K-1s. Once the K-1s are produced, you can use TurboTax Deluxe or Premier to report the K-1s on the individual tax returns. TurboTax will guide you through the appropriate questions and put the information on the appropriate forms. Thank you, Lisa Greene-Lewis Reply « Older Comments Newer Comments » Leave a ReplyCancel reply Browse Related Articles Latest News President Trump’s Tax Proposals: Overtime Tax, Taxes on Tips, and Tax Cuts and Jobs Act Extension and More Home Mortgage Interest Deduction: How Homeowners Can Save on Taxes Business Taxes The Basics of Taxation on Business Tax Forms W-9 Form and Taxes: What Independent Contractors Need to Know Tax Forms W-9 Form and Taxes: What Independent Contractors Need to Know Home Mortgage Interest Deduction: How It Works and Who Can Claim It Business Taxes Filing Business Taxes for an LLC for the First Time Latest News How the Social Security Fairness Act Boosts Benefits for Public Workers Income Tax by State Idaho State Income Tax in 2025: A Guide Income Tax by State Indiana State Income Tax in 2025: A Guide
My K-1 shows $135 for Part 14.H ” Other Information “. Also described as Foreign Gross Receipts and Expenses. Where does this go, if anywhere, on the Form 1040? Reply
Hi Chris, If your tax return was already accepted you would amend your tax return and add the K-1 info. If your return ends up not being accepted by the IRS, you do not have to amend. You can just fix your tax return and add the K-1s. Thank you, Lisa Greene-Lewis Reply
Thank you..sorry one more. It was accepted…so i amend before filing deadline or i can do it anytime later in the year?
I created an LLC this past year for real estate investment. So for 2011, we have losses on our K-1’s. It appears that loss is not affecting my personal taxes like I thought. Do I not get a deduction? Or does that loss ultimately carry over to 2012 when I ultimately start getting rental income? Reply
Hello Lisa. Today I just learned I will be receiving a K-1 for 2011 interest and dividend income I inherited from a bypass trust. My husband and I have already just started our 2011 personal income taxes using Turbo Tax Deluxe. Does this version of Turbo Tax include questions and a place for K-1 income? I’m hoping we won’t have to purchase a second version of Turbo Tax. If the Deluxe version won’t work, can the K-1 “upgrade” be downloaded over the internet? Reply
If I work for a law firm and have to file in multiple states (4) and get a k1, which tax program should I buy? Reply
I was getting about $3,300 back in federal until I entered my k-1 (which shows a loss of 4123); this changed it to under $1700. Can you explain why this is? Reply
I had an investment in rental property held in my IRA for which I received a K-1. There was a final disposition of the property and a large section 1231 loss. Can i deduct this or is it not deductible because it was held as an alternative investment in my IRA? thank you Phil Reply
Hi Sandi, I receive K-1 this year and my wage was report in box 10. I entered this in TurboTax but it was not add up to the total of my income ( I also have w-2 from another job). Do you know how i can report this income as my wage but i didn’t receive anything else except k-1 from my employer. Thank you Loan Reply
Hi Loan, Box 10 of the K-1 is a net section 1231 gain, which would be reported on a different line from your W-2 income so it may be correct. Please double check your entries. If you still need assistance, please speak to one of our live tax experts via phone or chat. Thank you, Lisa Greene-Lewis Reply
Hi, My husband is executor for his dad’s living trust. The trust has been distributed. We had a small amount of dividend income and interest income. Can I create the return for the trust and the K-1s for his siblings using turbotax? Reply
Hi Sandi, Yes. In order to create the tax return for the trust you need to use TurboTax Business which will create the K-1s. Once the K-1s are produced, you can use TurboTax Deluxe or Premier to report the K-1s on the individual tax returns. TurboTax will guide you through the appropriate questions and put the information on the appropriate forms. Thank you, Lisa Greene-Lewis Reply