The Schedule K-1 (IRS Schedule K-1, Form 1065) is the tax form issued annually by a partnership to each partner, reporting the partner's allocable share of the fund's income, deductions, gains, losses, and credits.
Why It Matters
K-1s are the mechanism through which pass-through taxation works. The fund reports aggregate results on its partnership return (Form 1065), and each partner's share flows through on their K-1 for inclusion on their personal or entity tax return. Without timely K-1s, LPs cannot file their own returns, making K-1 delivery one of the most operationally visible commitments a fund makes to its investors.
Key Details
- K-1s for calendar-year funds are due by March 15, though most funds file extensions.
- With an extension, the deadline moves to September 15.
- Most LPs expect to receive K-1s by mid-summer (June through August) even with extensions.
- Late K-1s are the most common operational complaint from LPs.
- Each partner receives a unique K-1 reflecting their specific allocable share.
Capital Company prepares and delivers K-1s as part of fund tax administration, coordinating with the fund's tax preparer to ensure timely delivery to LPs.
This content is for informational purposes only and does not constitute legal, tax, or compliance advice. Consult qualified counsel for guidance specific to your situation.