Partnership can take on various legal forms including, but not limited to, an LLC (Limited Liability Company) or and LP (Limited Partnership).When you enter into a partnership, you and your partner should come up with an agreement that says in detail who gets what.
At tax time, you will need to file a Form 1065 on behalf of your partnership. The partnership itself doesn’t pay income tax. The profits or losses get passed through to the partners. This is called pass-through income.
As a part of Form 1065, a form called a Schedule K-1 is prepared and given to each partner spelling out your cut of the profits, losses, deductions and credits from the partnership. You will need to report this info on your own return on page 2 of Schedule E.
If you did not receive a K-1 from your partnership, you can refer to your partnership agreement to determine your share.