Schedule K-1 (Form 1065) – Purpose
Form 1065 is an information return used to report the income, gains, losses, deductions, credits, and other information from the operation of a partnership. A partnership doesn’t pay tax on its income but passes through any profits or losses to its partners. Partners must include partnership items on their tax or information returns.
Although the partnership generally isn’t subject to income tax, you may be liable for tax on your share of the partnership income, whether or not distributed. Include your share on your tax return if a return is required.
The amount of loss and deduction you may claim on your tax return may be less than the amount reported on Schedule K-1. It is the partner’s responsibility to consider and apply any applicable limitations. See Limitations on Losses, Deductions, and Credits, later, for more information.
Keep this form for your records. Do not file it with your tax return unless you are specifically required to do so. The partnership files a copy of Schedule K-1 (Form 1065) with the IRS.
For your protection, Schedule K-1 may show only the last four digits of your identifying number (social security number (SSN), etc.). However, the partnership has reported your complete identifying number to the IRS.
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