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Schedule K-1

Schedule K-1. Entire Lesson. Pub 4491 – Part 3. Schedule K-1. Reports taxpayer’s share of income, other distributions, deductions, and credits from Estates and Trusts (Form 1041) Domestic Partnerships (Form 1065) S Corporations (Form 1120S)

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Schedule K-1

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  1. Schedule K-1 Entire Lesson Pub 4491 – Part 3 NTTC Training – 2014

  2. Schedule K-1 • Reports taxpayer’s share of income, other distributions, deductions, and credits from • Estates and Trusts (Form 1041) • Domestic Partnerships (Form 1065) • S Corporations (Form 1120S) • K-1s for Foreign Partnerships (Form 8865) are out of scope NTTC Training – 2014

  3. Intake and Interview • Look for K-1s • Verify in scope! NTTC Training – 2014

  4. Schedule K-1 • In-scope K-1s contain ONLY • Interest income (taxable and tax-exempt) • Dividends (ordinary and qualified) • Capital gains or losses (long or short) • Royalty Income • Foreign Tax paid for passive activities • Anything else is Out-of-Scope NTTC Training – 2014

  5. Schedule K-1 (Form 1041) Note: may be 2013 form but be 2014 income for taxpayer when entity is on a fiscal, not calendar, year. NTTC Training – 2014

  6. Schedule K-1 (Form 1165) NTTC Training – 2014

  7. Schedule K-1 (Form 1120S) NTTC Training – 2014

  8. K-1 Interest Income • Also look for exempt interest income • Box number varies by form • Look on the back of the form for the code descriptions NTTC Training – 2014

  9. Reporting Income from K-1 Pub 4012, pg D-3 et seq • Do NOTuse TaxWise K1 worksheet • Interest or Dividend Stmt – list payer as [Company] K1 • Net Capital Gain/Loss – Sch D Line 5 for short-term, line 12 for long-term using scratch pad NTTC Training – 2014

  10. Reporting Income from K-1 Pub 4012, pg D-27 • Schedule E for royalties • Foreign Tax paid on Form 1116 NTTC Training – 2014

  11. Foreign Tax on K-1 • Box number varies by form • Must be coded as Passive income • Will be covered in later lesson NTTC Training – 2014

  12. Quality Review • Verify in scope • Verify tax year • Verify entries • On respective worksheets and forms • Not on K-1 in TaxWise NTTC Training – 2014

  13. Exit Interview • Will need to explain if out of scope NTTC Training – 2014

  14. Schedule K-1 NTTC Training – 2014

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