TL;DR: The form a partnership sends each partner showing their share of income, deductions and credits. The K-3 adds the international detail.

A partnership doesn't pay income tax — it reports. Each partner gets a Schedule K-1 showing their share of everything: ordinary income, interest, capital gains, 163(j) items, UBTI, and more. Partners plug those numbers into their own returns.

Since 2021, partnerships with international items also issue Schedules K-2 and K-3: foreign tax credit detail, CFC and PFIC information, and the data foreign partners need for ECI and 1446. Fund K-1s are famously late because they depend on every underlying investment's K-1 arriving first — hence extensions and estimates.

One partnership, one K-1 per partnerA fund partnership sends a K-1 and K-3 to each of three partners: a US individual, a tax-exempt endowment, and a foreign investor.Fund partnershipForm 1065US individualK-1EndowmentK-1 (+ UBTI)Foreign LPK-1 + K-3 + 8805
Same fund, different investors, different pages that matter.

Worked example

An endowment's K-1 from a real estate fund shows $400k of rental income and a footnote saying $90k of it is UBTI from debt-financed property. The endowment reports the $90k on Form 990-T. The foreign LP's package adds a K-3 and a Form 8805 showing tax the fund already paid on its behalf.

Where you'll see it: Every March–September. Estimates in Q1, final K-1s in Q3, amended ones whenever an underlying investment restates.

Code: Form 1065 Schedules K-1, K-2, K-3 · Related: Section 163(j), UBTI, Section 1446 withholding

Full explainer: Schedules K-2 and K-3, the international add-ons to the K-1 →

See all 53 terms in the glossary

This glossary is general information, simplified for learning. It is not tax, legal or investment advice, and real structures turn on facts and documents not shown here.