VNFA Q&A: Schedule K-1 Tax Documents
Question:
Can you spend some time talking about Schedule K’s, specifically for individuals such as myself who own stock in a company that mails this tax document to partners. It’s a little confusing as to what you report to the IRS and when you do report it.

Answer:
In recent years, many investments that have been made by investors include limited partnerships or Master Limited Partnerships, especially in energy.  The partnership files a Form 1065 and reports the partners’ shares on a 1065 Schedule K-1. More recently, many of these partnerships are switching to corporations which will then convert to stock rather than partnership interests or units. Dividends paid on stock get reported on a 1099DIV.  K-1s may be issued to shareholders of an S Corporation via a 1120S K-1 or to beneficiaries of estate and trusts using 1041 K-1. Click here to read the full answer on our website.