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USA Tax Glossary
Form 1065 is the U.S. Return of Partnership Income. A partnership files it as an information return to report income, gains, losses, deductions, and credits.
Investor Context
Real estate investors often see Form 1065 when property is owned by a partnership or multi-member LLC taxed as a partnership. The partnership generally passes tax items through to partners rather than paying federal income tax itself.
Why It Matters
It is the federal partnership return for many real estate LLCs.
It produces Schedule K-1 information for each partner.
It can include rental real estate activity reported on Form 8825.
Records To Prepare
Entity books and bank activity
Operating agreement and ownership percentages
Partner capital contributions and distributions
Property income, expenses, depreciation, and debt records
Common Caution
A partnership is a pass-through entity, but partners still need to report their shares correctly on their own returns.
Direct Answers
Generally, a partnership files an information return and passes profits or losses through to partners, who report their shares on their own returns.
Many multi-member LLCs taxed as partnerships file Form 1065 unless they have elected a different federal tax classification.
Official IRS Reference
IRS: About Form 1065Related Terms
Schedule K-1 reports an owner share of income, deductions, credits, and other tax items from a pass-through entity such as a partnership or S corporation.
Form 8825 is used by partnerships and S corporations to report rental real estate income and deductible rental real estate expenses.
The Qualified Business Income deduction, also called the Section 199A deduction or QBI deduction, is a deduction for eligible noncorporate taxpayers with qualified business income, subject to limitations.
