Business
Schedule K-1
The statement a partnership or S-corporation issues to each owner reporting their share of its income, deductions and credits.
Also called K-1.
You do not file a K-1. You receive one and the figures on it go onto your own return. A partnership issues one per partner; an S-corp issues one per shareholder.
It reports your share of profit whether or not the business distributed any cash. This is why an owner can owe tax on money they never received, and why basis and distributions have to be tracked alongside it.
K-1s arrive late. The business return is due before the personal one, and in practice a K-1 is a common reason to extend.
In Contha
Contha states your K-1 position (share, guaranteed payments, whether you materially participate) from recorded figures, before the form exists.
Related
Terms that come up beside this one
Partnership
A business with more than one owner that files its own information return and passes profit through to the partners.
S-corporation
A tax election under which a business pays its owner a salary and passes the remaining profit through to them without self-employment tax.
Basis
What you have invested in a business for tax purposes, adjusted each year for profit, loss and distributions.
Material participation
Whether an owner is genuinely involved in running a business, which decides how their share is taxed.