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IRS Form 1065 - Partnership Income 2019 2018 NOTES
7 Schedule K-1 Form 1065 – Partner’s Share of Income
*Review Line 19 for a
distribution
**Only add back the eligible
“Other” deductions, such as
Amortization or Casualty Loss.
***Follow specific investor
guidelines. Adjustments
may not be required if there
is evidence these roll over
regularly, it is verified to be a
line of credit or if the business
has sufficient assets to cover
the liability.
a. Ordinary Income/Loss (Line 1) *
+/–
b. Net Rental Real Estate; Other Net Income (Loss) (Lines 2, 3)*
+/–
c
. Guaranteed Payments to Partner (2019 Line 4c, 2018 Line 4)
+
8 Form 1065 - Adjustments to Business Cash Flow
a. Ordinary (Income) Loss from Other Partnerships (Line 4)
+/–
b. Nonrecurring Other (Income) or Loss (Lines 5, 6 & 7)
+/–
c. Depreciation (Line 16c, including 8825 Line 14)
+
d. Depletion (Line 17)
+
e. Amortization/Casualty (Review Attachment Related to
Line 20**)
+
f. Mortgages or Notes Payable in Less than 1 Year (Schedule L,
Line 16d***)
–
g. Non-deductible Travel and Entertainment Expenses
(Schedule M-1, Line 4b)
–
Subtotal
=
Percent Ownership (From Schedule K-1) % %
Total Form 1065
=
Total Partnership Income
IRS Form 1120S – S Corporation Earnings 2019 2018 NOTES
9 Schedule K-1 Form 1120S – Shareholder’s Share of Income
*Review Line 16d for a
distribution
**Only add back the eligible
“Other” deductions, such as
Amortization or Casualty Loss.
***Follow specific investor
guidelines. Adjustments
may not be required if there
is evidence these roll over
regularly, it is verified to be a
line of credit or if the business
has sufficient assets to cover
the liability.
a. Ordinary Income (Loss) (Line 1)*
+/–
b. Net Rental Real Estate; Other Net Rental Income (Loss)
(Lines 2, 3)*
+/–
10 Form 1120S - Adjustments to Business Cash Flow
a. Nonrecurring Other (Income) Loss (Lines 4, 5)
+/–
b. Depreciation (Line 14, including 8825 Line 14)
+
c. Depletion (Line 15)
+
d. Amortization/Casualty Loss (Review Attachment Related
to
Line 19**)
+
e. Mortgages or Notes Payable in Less than 1 Year (Schedule L,
Line 17d***)
–
f. Non-deductible Travel and Entertainment Expenses (Schedule
M-1, Line 3b)
–
Subtotal
=
Percent Ownership (From Schedule K-1) % %
Total Form 1120S
=
Total S-Corp Income
Partnership or S Corporation
A self-employed borrower’s share of Partnership or S Corporation earnings may be considered provided that:
• The borrower can document ownership share (for example, the Schedule K-1); and
• The K-1 reflects a documented, stable history of receiving cash distributions of income consistent with the level of business income used
to qualify; or lenders must verify the business has adequate liquidity to support the withdrawal of earnings.
• See liquidity calculators to aid in confirmation of adequate liquidity.
Note: See additional information on the fourth page of this calculator.