1. 1 NTTC Training 2009 SCHEDULE K-1 What is ‘In-scope’? How to Report in Tax Wise

2. 2 NTTC Training 2009 SCHEDULE K-1 WARNING  During the interview look at all K-1s  In-scope K-1s contain ONLY  Interest Income (taxable and tax-exempt)  Dividends (ordinary and qualified)  Capital gains or losses (long or short)  Everything else is Out-of-Scope

3. 3 NTTC Training 2009 SCHEDULE K-1  Reported to T/P by four types of entities  Domestic Partnerships (Form 1065)  Foreign Partnerships (Form 8865)  Estates and Trusts (Form 1041)  S Corporations (Form 1120S)  Must include all data on return  Schedule K-1 not filed with return

4. 4 NTTC Training 2009 SAMPLE SCHEDULE K-1 (ABC)

5. 5 NTTC Training 2009 SCHEDULE K-1 INTEREST AND DIVIDENDS  Interest  Dividends –Ordinary and Qualified  Use the TaxWise Interest or Dividend Statement (Do NOT fill out K-1)  List Payer as [Name of Company] K-1  See sample ABC K-1 (may vary)

6. 6 NTTC Training 2009 TaxWise Interest Statement Example (ABC K-1)

7. 7 NTTC Training 2009 TaxWise Dividend Statement Examples (ABC K-1) K-1 Ordinary Dividends K-1 Qualified Dividends

8. 8 NTTC Training 2009 SCHEDULE K-1 CAPITAL GAINS OR LOSSES  Short term  Long term  In TaxWise enter directly on Sch D (Do NOT fill out K-1)  Short term – Line 5  Long term – Line 12  Direct entry provides proper tax treatment of short or long term gains

9. 9 NTTC Training 2009 Schedule D Capital Gains/Losses Direct Entry from K-1