Looking for a Schedule K-1 Templates? Download it for free!

2016

Department of the Treasury

Internal Revenue Service

Partner's Instructions for

Schedule K-1 (Form 1065)

Partner's Share of Income, Deductions, Credits, etc.

(For Partner's Use Only)

If the treatment on your original or

Form 1099-B, Proceeds From Broker and

Section references are to the Internal Revenue Code

unless otherwise noted.

amended return is inconsistent with the

Barter Exchange Transactions.

partnership's treatment, or if the partnership

Future Developments

If a partner is required to notify the

was required to but has not filed a return, you

partnership of a section 751(a) exchange but

must file Form 8082, Notice of Inconsistent

For the latest information about

fails to do so, the partner will be subject to a

Treatment or Administrative Adjustment

developments related to Schedule K-1 (Form

penalty for each such failure. However, no

Request (AAR), with your original or

1065) and the Partner's Instructions for

penalty will be imposed if the partner can

amended return to identify and explain any

Schedule K-1 (Form 1065), such as

show that the failure was due to reasonable

inconsistency (or to note that a partnership

legislation enacted after they were

cause and not willful neglect.

return has not been filed).

published, go to

Gain or loss from the disposition of

If you are required to file Form 8082 but

your partnership interest is generally

General Instructions

do not do so, you may be subject to the

TIP

net investment income under section

accuracy-related penalty. This penalty is in

1411 and may be subject to the net

addition to any tax that results from making

Purpose of Schedule K-1

investment income tax. See Form 8960, Net

your amount or treatment of the item

Investment Income Tax—Individuals,

consistent with that shown on the

The partnership uses Schedule K-1 to report

Estates, and Trusts, and its instructions for

partnership's return. Any deficiency that

your share of the partnership's income,

information about how to report and figure

results from making the amounts consistent

deductions, credits, etc. Keep it for your

the tax due.

may be assessed immediately.

records. Do not file it with your tax return

unless you are specifically required to do so.

Errors

Nominee Reporting

(See the instructions for Code O. Backup

withholding, later.) The partnership files a

If you believe the partnership has made an

Any person who holds, directly or indirectly,

copy of Schedule K-1 (Form 1065) with the

error on your Schedule K-1, notify the

an interest in a partnership as a nominee for

IRS.

partnership and ask for a corrected

another person must furnish a written

Schedule K-1. Do not change any items on

statement to the partnership by the last day

For your protection, Schedule K-1 may

your copy of Schedule K-1. Be sure that the

of the month following the end of the

show only the last four digits of your

partnership sends a copy of the corrected

partnership's tax year. This statement must

identifying number (social security number

Schedule K-1 to the IRS. If you are a partner

include the name, address, and identifying

(SSN), etc.). However, the partnership has

in a partnership that doesn't meet the small

number of the nominee and such other

reported your complete identifying number to

partnership exception and you report any

person, description of the partnership

the IRS.

partnership item on your return in a manner

interest held as nominee for that person, and

different from the way the partnership

other information required by Temporary

Although the partnership generally isn't

reported it, you must file Form 8082.

Regulations section 1.6031(c)-1T. A

subject to income tax, you may be liable for

nominee that fails to furnish this statement

tax on your share of the partnership income,

Sale or Exchange of

must furnish to the person for whom the

whether or not distributed. Include your

Partnership Interest

nominee holds the partnership interest a

share on your tax return if a return is

copy of Schedule K-1 and related

required. Use these instructions to help you

Generally, a partner who sells or exchanges

information within 30 days of receiving it from

report the items shown on Schedule K-1 on

a partnership interest in a section 751(a)

the partnership.

your tax return.

exchange must notify the partnership, in

writing, within 30 days of the exchange (or, if

The amount of loss and deduction you

A nominee who fails to furnish all the

earlier, by January 15 of the calendar year

may claim on your tax return may be less

information required by Temporary

following the calendar year in which the

than the amount reported on Schedule K-1. It

Regulations section 1.6031(c)-1T when due,

exchange occurred). A “section 751(a)

is the partner's responsibility to consider and

or who furnishes incorrect information, is

exchange” is any sale or exchange of a

apply any applicable limitations. See

subject to a $260 penalty for each failure.

partnership interest in which any money or

Limitations on Losses, Deductions, and

The maximum penalty is $3,193,000 for all

other property received by the partner in

Credits, later, for more information.

such failures during a calendar year. If the

exchange for that partner's interest is

nominee intentionally disregards the

Inconsistent Treatment of

attributable to unrealized receivables (as

requirement to report correct information,

defined in section 751(c)) or inventory items

each $260 penalty increases to $530 or, if

Items

(as defined in section 751(d)).

greater, 10% of the aggregate amount of

Generally, you must report partnership items

items required to be reported, and there is no

The written notice to the partnership must

shown on your Schedule K-1 (and any

limit to the amount of the penalty.

include the names and addresses of both

attached statements) the same way that the

parties to the exchange, the identifying

International Boycotts

partnership treated the items on its return.

numbers of the transferor and (if known) of

This rule doesn't apply if your partnership is

the transferee, and the exchange date.

Every partnership that had operations in, or

within the “small partnership exception” and

related to, a boycotting country, company, or

doesn't elect to have the tax treatment of

An exception to this rule is made for sales

a national of a boycotting country must file

partnership items determined at the

or exchanges of publicly traded partnership

Form 5713, International Boycott Report.

partnership level.

interests for which a broker is required to file

Dec 29, 2016

Cat. No. 11396N

Partner'S Instructions For Schedule K-1 (Form 1065) - Partner'S Share Of Income, Deductions, Credits, Etc. (For Partner'S Use Only) - 2016

Related Articles

Related forms

Related Categories