Instructions For Schedule K-1-P(2) - Partner'S And Shareholder'S - Illinois Department Of Revenue

ADVERTISEMENT

Illinois Department of Revenue
Schedule K-1-P(2) Partner’s and Shareholder’s Instructions
General Information
apportionment factors and business income. You must determine
the portion of your business income taxed by Illinois by adding your
What is the purpose of Schedule K-1-P?
share of the partnership’s business income and apportionment
The partnership or the S corporation listed on the front of Schedule
factors to your own business income and apportionment factors. If
K-1-P has completed and provided you with the schedule to reflect
the partnership is included in your Schedule UB, report the items
your specific share of the partnership’s or the S corporation’s income,
on the Schedule K-1-P in the same manner as you would report the
modifications, and credits. Use the completed schedule and these
items from a non-unitary partner.
instructions to help you report the items shown on Schedule K-1-P on
What if I am a Grantor Trust or Disregarded Entity?
your Illinois Income Tax return. Attach a copy of Schedule K-1-P to
your tax return and keep a copy for your records.
If you are a grantor trust or other disregarded entity for federal and
Illinois income tax purposes, check the applicable box on Line 9b,
What must I attach?
enter the name and identification number of the taxpayer that will
You must attach a copy of any Schedule K-1-P you receive from
report the income or loss from your Schedule K-1-P on their tax
partnerships and S corporations to your tax return. You should also
return, and provide them with a copy of the Schedule K-1-P and a
keep a copy for your records.
copy of these instructions.
If you receive a Schedule K-1-P that has “the following
What if I received Schedule K-1-P from a Grantor
information is included in the Schedule K-1-P from _______” (the
Trust or Disregarded Entity?
name of the partnership or S corporation) written at the top, it is a
If the grantor trust or disregarded entity checkbox on Line 9b is
pro forma Schedule K-1-P. The pro forma Schedule K-1-P has been
checked and your name and identification number are listed, report
included to aid you in the completion of your return and should not
the items from the Schedule K-1-P as if it were provided to you by the
be submitted with your tax return.
taxpayer in Step 1.
What if the partnership is an investment
What if I believe the partnership or the S corporation
partnership?
has made an error on my Schedule K-1-P?
If the partnership that completed the Schedule K-1-P entered
If you believe the partnership or the S corporation has made an error on
“investment partnership” in Step 1, Line 4, all of the income you
your Schedule K-1-P, notify the partnership or the S corporation and ask
receive from the partnership is usually treated as nonbusiness
for a corrected Schedule K-1-P. Do not change any items on your copy.
income that is allocable to your state of residence (individuals) or
What does Column A represent?
state of commercial domicile (all other persons or entities). However,
Column A represents your specific share of the partnership’s or the
the income you receive from the partnership will be treated as
S corporation’s income, modifications, and credits. The partnership
business income if your investment in the partnership is related to
or the S corporation is required to complete this column if you were
another business activity of yours or serves an operational function
a partner or shareholder at any time during the partnership’s or the
to another business activity of yours or where your contribution to
S corporation’s tax year. If you were a resident of Illinois on the last
the partnership was made out of working capital from your trade or
day of the partnership’s or S corporation’s taxable year, all amounts
business. If your income is treated as business income, you must
in Column A must be included as income, modifications, and credits
apportion it as if you had earned the income directly, rather than
allocated to Illinois. If you were a resident of Illinois on the last day
through the partnership. The apportionment should be completed on
of the partnership’s or the S corporation’s tax year, and you are
the correct forms, as follows:
claiming a credit for taxes paid to another state, see “What does
Nonresident individuals - use Form IL-1040, Schedule NR.
Column B represent?” below.
Nonresident trusts and estates - use Form IL-1041, Schedule NR.
What does Column B represent?
Illinois residents may not include any income from an
Column B represents the portion of Column A that is allocated or
investment partnership in Column B of their Schedule CR.
apportioned to Illinois. If you were not a resident of Illinois on the last
Corporations (excluding S corporations) - use Form IL-1120 and
day of the partnership’s or the S corporation’s tax year, be sure the
complete Step 4, Figure your income allocable to Illinois.
amounts reported in Column B are included in the Illinois amounts
Partnerships or S corporations - use Form IL-1065 or
reported on your
Form IL-1120-ST and complete Step 6, Figure your income allocable
• Form IL-1040, Schedule NR, Nonresident and Part-Year Resident
to Illinois.
Computation of Illinois Tax, Column B;
• Form IL-1041, Schedule NR, Nonresident Computation of
Exempt organizations - use Form IL-990-T and complete Step 3,
Fiduciary Income, Column B;
Figure your income allocable to Illinois.
• Form IL-1120, Step 4, Figure your income allocable to Illinois;
What if I am engaged in a unitary business with this
• Form IL-1065 or Form IL-1120-ST, Step 6, Figure your income
partnership?
allocable to Illinois; or
• Form IL-990-T, Step 3, Figure your income allocable to Illinois.
If you are engaged in a unitary business with this partnership but
If you were a resident of Illinois on the last day of the partnership’s or
the partnership is not included in your Schedule UB, Combined
the S corporation’s tax year, and you are claiming a credit for taxes
Apportionment for Unitary Business Group, the partnership should
have attached a schedule showing your share of the partnership’s
paid to another state, subtract the amount of each item in Column B
Printed by authority of the State of Illinios - Web Only
Schedule K-1-P(2) (R-12/17)
Page 1 of 10

ADVERTISEMENT

00 votes

Related Articles

Related forms

Related Categories

Parent category: Financial
Go
Page of 10