Question

Explain and give an example of the function of the 1020S K-1

Answer 1

Answer:

A schdeule K-1 is a tax document used to report the incomes, lossess, and dividends of a bsuiness's partner or an S corporation's shareholders. S corporation reports activity of Form 1120S, while a partnership reports transaction on Form 1065.

Partnership and S corporation are known pass-through entities because they generally don't pay income tax. The schedule K-1 is what allows partners and shareholders to report their share of income, deductions and credits to IRS on their tax returns, typiclly via form 1040