The Schedule K-1 is a tax document issued for an investment in partnership interests. The purpose of the Schedule K-1 is to report your share of the partnership's income, deductions and credits. It is issued around the same time as Form 1099 and serves a similar purpose for tax reporting.
While a partnership is generally not subject to income tax, you are liable for tax on your share of the partnership income, whether or not it's distributed. This tax document is commonly issued by investors when they invest in limited partnerships (LPs) and some exchange-traded funds (ETFs), such as those that invest in commodities.
The Schedule K-1 tends to have a reputation for being one of the last tax documents to be received by the taxpayer when gathering all of their tax documents to file the federal tax return. To add insult to the wait, the Schedule K-1 can be quite complex and require multiple entries on the taypayer's federal return, including such entries on the Schedule A, Schedule B, Schedule D and, in some cases, Form 6781.