Federal Schedule K-1: Mastering the Compliance Challenges

Determining and Reporting a Partner's Income, Credits and Deductions

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Tuesday, December 22, 2009

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Course Materials

This seminar will offer experienced approaches to fine-tune compliance work on federal Schedule K-1 reporting, estimating, electing and coding.


Businesses and advisors involved with partnerships, S corporations and certain trusts must complete federal Schedule K-1s under increasingly tough IRS scrutiny. The Service has increased efforts to match income from K-1s against other tax returns to ensure accurate reporting.

Several different federal returns require K-1s, forcing taxpayers and their advisors to make exacting decisions about estimating a partner's share of income, deductions and credits. It is more important than ever to ensure accuracy in detail work like coding and reporting elections.

The IRS routinely revises the Schedule K-1s and instructions, so tax advisors must stay constantly updated with best practices for gathering necessary data and making complex decisions on how to treat income, make elections and estimate an individual partner's shares.

Listen as our panel of experienced federal tax advisors updates you on the most important and problematic sections of Schedule K-1 and offers insights and approaches geared toward a more thorough and accurate job with each schedule.



  1. Review of Schedule K-1
    1. Partnership information
    2. Individual partner information
      1. ID number, type of partner or entity, partner’s share of profit/loss/capital/liabilities
      2. Partner capital account analysis
      3. Partner’s share of current-year income, deductions, credits and other items
        1. Ordinary, real estate and rental income
        2. Guaranteed payments
        3. Interest income
        4. Ordinary and qualified dividends
        5. Royalties
    3. Special codes for partners, income and deduction categories, transactions, etc.
  2. Ongoing challenges with Schedule K-1 compliance
    1. Reporting income in the proper location on returns
    2. Avoiding mistakes with netting or combining income, reporting gross income
    3. Handling deductions from prior years
    4. Estimating K-1 income and identifying it
    5. Reporting partner/shareholder elections


The panel will address these and other critical aspects for preparing Schedule K-1s:

  • Estimating income: When and how to make an estimate, and how to identify it on returns.
  • Reporting income: Avoiding mistakes such as netting or combining income against losses or expenses, and failing to report gross income separately.
  • Reporting deductions: How to carry forward "at risk" or basis limitation losses and segregate them from current-year amounts.
  • Reporting elections: Whether and how to make a partner or shareholder election in response to the entity's change in accounting period.


Matt Bower
Matt Bower
Manager, Washington National Tax, Pass-Throughs Group
Deloitte Tax

He has eight years of professional experience and specializes in partnership taxation, particularly in M&A and...  |  Read More

Sarah I. Staudenraus
Sarah I. Staudenraus

Tax Partner

Ms. Staudenraus is part of the firm's Washington National Tax Practice and specializes in the federal tax...  |  Read More

Joseph F. Schlueter
Joseph F. Schlueter

Mr. Schlueter has more than 21 years of professional experience and serves as the firm's lead technical...  |  Read More

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