Difference between reporting K-1 and Schedule E Page 2

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  • #172350 Reply
    Manuelo
    Member

    Ok guys, take a look at K-1 form (1065) and Schedule E Page 2 form (1040). Why IN THE WORLD would you report your share of partnership income in Schedule E Page 2 when there is ALREADY a K-1 form?

    I'm assuming the difference lies in whether you materially participated or not? If you materially participate, you report your partnership income on K-1. If you don't materially participate, you report your partnership income on Schedule E Page 2, which is then reported on the 1040.

    #355572 Reply
    Givemesleep
    Member

    The K1 comes from the partnership or S corp return. Schedule E

    Page 2 is were you report the K1 on the 1040. Same way you get a W2 for wages and report it on page 1 or you

    get a 1099 int and report on sch B of the 1040.

    #355573 Reply
    Manuelo
    Member

    What if the taxpayer received dividends from the partnership on K-1? I'm guessing this is reported on Schedule B and then the 1040 provided the TP is not materially participating?

    Partner's share of Charitable donations reported on K-1 would be an itemized deduction on his personal tax return.

    Partner's share of his capital gain/loss reported on K-1 would be recorded on Schedule D and then on the 1040. Subject to limits..

    Am I getting the concept right?

    #355574 Reply
    Givemesleep
    Member

    Correct my friend. The K1 simply reports the amounts to be seperately stated on the appropriare line of the 1040

    The only thing you have wrong is the material participation only matters

    When calculation how much loss can be deducted. This is done by using form

    8582 for passive activities if he/she does not materially participate. You also have to consider basis when deducting the loss but that is a seperate issue

    #355575 Reply
    round1
    Participant

    May I ask a related question: a TP received the K-1, he's a limited partner, there was an annual partnership loss (for ordinary partnership activity). Where should this prorated portion of loss be reported on his 1040? Can he, at all, take this loss? Btw, this loss reduced his calculated basis in the partnership.

    #3312625 Reply
    KIKI
    Guest

    THANK YOU. YOUR ANSWER WAS PERFECT. SIMPLE, CLEAR, AND PRECISE. I WISH MORE THINGS IN LIFE COULD BE THIS DIRECT AND ACCURATE.

    B WELL AND STAY SAFE!!!
    KIKI

    #3312628 Reply
    KIKI
    Guest

    THANK YOU. YOUR ANSWER WAS PERFECT. SIMPLE, CLEAR, AND PRECISE. I WISH MORE THINGS IN LIFE COULD BE THIS DIRECT AND ACCURATE.

    B WELL AND STAY SAFE!!!
    KIKI

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