Glossary · Tax & Reporting
Schedule K-1 (K-1)
A Schedule K-1 is a US tax form that reports each partner's share of a partnership's income, deductions, gains, losses and credits for the tax year.
Partnerships, including most US private funds and onshore hedge funds structured as limited partnerships, do not generally pay US federal income tax themselves. Instead they file Form 1065 and issue each partner a Schedule K-1 showing that partner’s allocated share of the partnership’s tax items. Partners use the K-1 to prepare their own returns.
For calendar-year partnerships the filing deadline is generally March 15, extendable by six months. Because many investors need K-1s to file their own returns, delivery timing is a frequent investor-relations issue, and funds that invest in other partnerships often depend on receiving underlying K-1s first.
K-1 preparation requires tax capital accounts, book-to-tax adjustments, partner-level allocations and, where relevant, state and international schedules such as K-2 and K-3. Pitfalls include allocation errors from late closings or transfers, missing investor tax data, and inconsistencies between the K-1 and the audited financial statements.
For how Fundtec prepares and delivers K-1s, see File Your K-1s.
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Where this comes up in our work
File Your K-1s
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