SCHEDULE K1 What is Inscope How to Report

SCHEDULE K-1 What is ‘In-scope’? How to Report in Tax Wise NTTC Training 2009 1

SCHEDULE K-1 WARNING During the interview look at all K-1 s In-scope K-1 s contain ONLY Interest Income (taxable and tax-exempt) Dividends (ordinary and qualified) Capital gains or losses (long or short) Everything else is Out-of-Scope NTTC Training 2009 2

SCHEDULE K-1 Reported to T/P by four types of entities Domestic Partnerships (Form 1065) Foreign Partnerships (Form 8865) Estates and Trusts (Form 1041) S Corporations (Form 1120 S) Must include all data on return Schedule K-1 not filed with return NTTC Training 2009 3

SAMPLE SCHEDULE K-1 (ABC) NTTC Training 2009 4

SCHEDULE K-1 INTEREST AND DIVIDENDS Interest Dividends –Ordinary and Qualified Use the Tax. Wise Interest or Dividend Statement (Do NOT fill out K-1) List Payer as [Name of Company] K-1 See sample ABC K-1 (may vary) NTTC Training 2009 5

Tax. Wise Interest Statement Example (ABC K-1) NTTC Training 2009 6

Tax. Wise Dividend Statement Examples (ABC K-1) K-1 Ordinary Dividends K-1 Qualified Dividends NTTC Training 2009 7

SCHEDULE K-1 CAPITAL GAINS OR LOSSES Short term Long term In Tax. Wise enter directly on Sch D (Do NOT fill out K-1) Short term – Line 5 Long term – Line 12 Direct entry provides proper tax treatment of short or long term gains NTTC Training 2009 8

Schedule D Capital Gains/Losses Direct Entry from K-1 NTTC Training 2009 9