Income-Schedules K-1 and Rental

This lesson covers the reporting of:

• Certain income from Schedules K-1 (Forms 1065, 1120S, and 1041). Volunteers who certify at the Advanced level are permitted to prepare

a Schedule E, Supplemental Income and Loss, only with Schedule K-1 income items identified in this lesson or Form 1099-MISC, Box 2, Royalties, with no associated expenses.

• Rental income and expenses are in scope only for military families renting their personal residence. Taxpayers are not required to report income and expenses if their home is rented less than 15 days during the year.

• Rental income and expenses are in scope only for the Military course. Volunteers must certify at Military level to prepare Schedule E for rental income. 

At the end of this lesson, using your resource materials, you will be able to:

• Identify Schedule K-1 income items that are within the scope of this programs

• Determine how to report Schedule K-1 income items

• Determine which types of rental income must be reported

• Identify how to report rental expenses