About Form 1065, U.S. Return of Partnership Income
1.Basic Information: This includes the partnership’s name, address, Employer Identification Number (EIN), and principal business activity.
2.Income Section: Reports the partnership’s total income, including gross receipts or sales, cost of goods sold, gross profit, and other income.
3.Deductions Section: Lists various deductible expenses such as salaries and wages, repairs and maintenance, bad debts, rent, taxes, interest, and depreciation.
4.Tax and Payments: While partnerships themselves do not pay income tax, there may be other taxes reported, such as self-employment tax for partners.
5.Schedule K: Summarizes the partnership’s income, deductions, and credits, and allocates them to the partners. This information is then reported on each partner’s Schedule K-1.
6.Schedule L (Balance Sheets): Shows the partnership’s assets, liabilities, and partners’ capital accounts at the beginning and end of the year.
7.Schedule M-1 (Reconciliation of Income): Reconciles the income (loss) per books with the income (loss) per Form 1065.
8.Schedule M-2 (Analysis of Partners’ Capital Accounts): Analyzes changes in the partners’ capital accounts during the tax year
Filing Requirements
Common Sections of Form 1065
1.Page 1: Basic Information, Income, and Deductions
2.Schedules K and K-1: Distributive share items
3.Schedules L, M-1, and M-2: Balance sheet, reconciliation, and analysis of capital accounts
Special Considerations
