- Business partners, S corporation shareholders, and investors in limited partnerships and certain ETFs use Appendix K-1 to report their income, losses, and dividends.
- K-1 tables are usually issued by pass-through commercial or financial organizations that do not pay corporate tax directly on their income, but pass the tax liability (along with most of their income) to their stakeholders.
- Appendix K-1 requires an entity to keep track of each participant’s basis or ownership interest in the enterprise.
- Several different types of income may be listed in Appendix K-1.
- Annex K-1 must be issued to taxpayers no later than March 15 or the third month after the end of the financial year of the organization.