The amounts shown in boxes 1 through 21 reflect your
share of income, loss, deductions, credits, and other items
from partnership business or rental activities without
reference to limitations on losses or adjustments that may
be required of you because of:
The adjusted basis of your partnership interest,
The amount for which you’re at risk,
The passive activity limitations, and
The excess business loss limitations.
For information on these provisions, see Limitations on
Losses, Deductions, and Credits, earlier.
Other limitations may apply to specific deductions (for
example, the section 179 expense deduction). Generally,
specific limitations apply before the at-risk, passive loss,
and excess business loss limitations.
If you’re an individual and the passive activity rules
don’t apply to the amounts shown on your Schedule K-1,
take the amounts shown and enter them on the
appropriate lines of your tax return. If the passive activity
rules do apply, report the amounts shown as indicated in
these instructions.
If you aren’t an individual, report the amounts in each
box as instructed on your tax return.
If you file your tax return on a calendar-year basis, but
your partnership files a return for a fiscal year, report the
amounts on your tax return for the year in which the
partnership’s fiscal year ends. For example, if the
partnership’s tax year ends in February 2026, report the
amounts on your 2026 tax return.
If you have losses, deductions, or credits from a prior
year that weren’t deductible or usable because of certain
limitations, such as the basis limitations or the at-risk
limitations, take them into account in determining your net
income, loss, or credits for this year. However, except for
passive activity losses and credits, don’t combine the
prior-year amounts with any amounts shown on this
Schedule K-1 to get a net figure to report on any
supporting schedules, statements, or forms attached to
your return. Instead, report the amounts on the attached
schedule, statement, or form on a year-by-year basis.
Section 743(b) adjustments. If the partnership
reports a section 743(b) adjustment to partnership items,
report these adjustments as separate items on Form 1040
or 1040-SR in accordance with the reporting instructions
for the partnership item being adjusted. A section 743(b)
adjustment increases or decreases your share of income,
deduction, gain, or loss for a partnership item. For
example, if the partnership reports a section 743(b)
adjustment to depreciation for property used in its trade or
Partner's Inst. for Sch. K-1 (Form 1065) (2025) 13
business, report the adjustment on Schedule E (Form
1040), line 28, in accordance with the instructions for
box 1 of Schedule K-1.
Tip: If you’re required to file Schedule E (Form 1040) and
receive a Schedule K-1 from multiple partnerships, report
items from each partnership’s Schedule K-1 on a separate
line 28 of Schedule E.
Codes. In box 11, boxes 13 through 15, and boxes 17
through 20, the partnership will identify each item by
entering a code in the column to the left of the dollar
amount entry space. These codes are identified under List
of Codes for Schedule K-1 (Form 1065) at the end of
these instructions.
Attached statements. The partnership will enter an
asterisk () after the code, if any, in the column to the left of
the dollar amount entry space for each item for which it
has attached a statement providing additional information.
For those informational items that can’t be reported as a
single dollar amount, the partnership will enter an asterisk
() in the left column and enter “STMT” in the dollar
amount entry space to indicate the information is provided
on an attached statement.
