Article: 50058
If you are a partner in a partnership (files Form 1065), you will receive Schedule K-1 and you will need to report that information on your return (Form 1040). Schedule K-1 is used to report your share of the partnership’s income, credits, deductions, etc.
Entering Schedule K-1
To add Schedule K-1 from Form 1065 follow the steps below.
- Click on the Review tab on the left of the screen in the Federal taxes section.
- Click the link I’d like to see the forms I’ve filled out or search for a form.
- Click on the Income tab.
- Click on Schedule K-1 for 1065 to add and open the form.
- Alternatively, search for Schedule K-1 in the search box and click Add Form beside Schedule K-1 for 1065.
- Enter in your applicable information.
- Click Save.
Basis Worksheet
Generally, a partner may only claim their share of a partnership loss (including a capital loss) to the extent it does not exceed their adjusted basis in the partnership at the end of the partnership’s tax year. Any losses and deductions that are not allowed can be carried forward until such time as they can be used.
As you enter your income, expenses, deductions, etc. that were reported on Schedule K-1, use the Basis Wkst or Basis Wkst (cont) tab, to enter the applicable basis information for the Schedule K-1 from Form 1065.
If your partnership loss is not reflected on Schedule E, page 2, you will want to verify you have entered your adjusted basis on the Basis Wkst under the Partner Basis section, line 1. The allowed or disallowed loss will be calculated on the Basis Worksheet. You can review this worksheet by viewing the return PDF.
Code Not Available
If the code is not available on the entry screen, you will need to determine if the amount should be reported elsewhere, or if it is just an informational value that does not need to be entered on your return. See the Partner’s Instructions for Schedule K-1 (Form 1065) for assistance.
Line 13 Code W
On Schedule K-1 from Form 1065, line 13, code W is not available in the drop down. This is because the Schedule K-1 partner’s instructions specify that code W can be reported in more than one location on the individual return. Specific reporting depends on how it applies to your specific return. If the partnership did not provide more detailed information, consult the Partner’s Instructions for Schedule K-1 (Form 1065) for guidance.