K-1 Form

K-1 Form

The K-1 Form is a tax document used to report income, deductions, and credits from partnerships, S corporations, estates, or trusts. It is issued to each partner or shareholder, detailing their share of the entity’s income or loss for the tax year.

In the case of partnerships, the K-1 (Form 1065) captures each partner’s portion of the partnership’s earnings, losses, and other tax items, which the partner must report on their individual tax return. For S corporations, the K-1 (Form 1120S) serves a similar purpose, informing shareholders of their allocable share of the company’s income, deductions, and credits.

For example, if a partnership generates $100,000 in income and has three partners, the K-1 forms will report each partner’s share based on their ownership percentage, such as 50%, 30%, and 20%. Each partner would then incorporate these amounts into their own tax filings.