1. Schedule K-1
Pub 4491 – Pg 123
NTTC Training — 2013

2. Schedule K-1
Reports taxpayer’s share of income, other distributions, deductions, and credits from
Estates and Trusts (Form 1041)
Domestic Partnerships (Form 1065)
S Corporations (Form 1120S)
K-1s for Foreign Partnerships (Form 8865) are out of scope
NTTC Training — 2013

3. Intake and Interview Look for K-1s Verify in scope!
Carefully review any K-1s to make sure they are in scope. Nothing is more discouraging to the taxpayer than having them go through the intake process and wait to have their return prepared only to be told that their return is out of scope.
See Pub 4012, pg D-3 for specific K-1 instructions
NTTC Training 2013

4. Schedule K-1 In-scope K-1s contain ONLY Anything else is Out-of-Scope
Interest income (taxable and tax-exempt)
Dividends (ordinary and qualified)
Capital gains or losses (long or short)
Royalty Income
Foreign Tax paid for passive activities
Anything else is Out-of-Scope
Interest and Dividend line numbers not listed for K-1s as they vary
NTTC Training — 2013

5. Note: may have 2012 Form date but be 2013 income for taxpayer.
Schedule K-1 (Form 1041)
Watch dates - could be fiscal year rather than calendar year K-1
NTTC Training — 2013

6. Schedule K-1 (Form 1120S)
NTTC Training — 2013

7. Schedule K-1 (Form 1065-B)
NTTC Training — 2013

8. K-1 Interest Income Also look for exempt interest income
Box number varies by form
Look on the back of the form for the code descriptions
NTTC Training 2013

9. Reporting Income from K-1
Pub 4012, pg D-3
Do NOT use K-1 worksheet
Interest or Dividend Stmt – list payer as [Company] K1
Net Capital Gain/Loss – Sch D Line 5 for short-term, line 12 for long-term using scratch pad
One of very few direct entries on Sch D
NTTC Training — 2013

10. Reporting Income from K-1
Pub 4012, pg D-3
Schedule E for royalties
Foreign Tax paid on Form 1116
NTTC Training — 2013

11. Foreign Tax on K-1 Box number varies by form
Must be coded as Passive income
Will be covered in later lesson
Emphasize
Only the simplified method for foreign tax credits is in scope, unless certified for International
NTTC Training 2013

12. Quality Review Verify in scope Verify tax year Verify entries
On respective worksheets and forms
Not on K-1 in TaxWise
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13. Exit Interview
Will need to explain if out of scope
NTTC Training 2013

14. Schedule K-1
NTTC Training 2013