Form 1065 K-1s: IRS Throws Rocks at Hornets’ Nest

Author: Bradley Burnett

The IRS isn’t making life easy for partnership tax preparers. On the 2025 Form 1065 and Schedule K-1, the agency has ramped up its demands for detailed disclosures—and changed the rules yet again. Are you ready to navigate these new complexities?

This course dives deep into the latest IRS requirements, including tax basis capital account reporting, tiered partnership disclosures, and built-in gains tracking. We’ll show you what the IRS wants, why it matters, and how to comply without losing your mind. If you prepare partnership returns, this course is your roadmap to avoiding costly mistakes and staying ahead of the compliance curve.

Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2028 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card

Publication Date: February 2026

Designed For
Anyone desiring to learn current IRS requirements for completing Schedule K-1 of Form 1065

Topics Covered

• Capital accounts – Tax basis reporting tweaked again
• 2025 Form 1065 Schedule K-1 – Reporting requirements
• Disregarded entity partners – Disclosures, depth of implications
• 3-year average annual gross receipts test – 5 places it matters
• Basis in partner’s partnership interest – Timing, timing, timing, timing
• Disguised sales – Form 1065 question re: partner disclosure
• §704(c) Built-in gains and loss – New “as-you-go” info required
• Aggregation of at-risk activities – Disclosures with sticky implications
• Grouping of passive activities – Disclosure and detail required
• Changes to forms highlighted

Learning Objectives

• Identify the adventure IRS throws in front of any preparer of Form 1065, Schedule K-1
• Identify new opportunities and challenges affected by OBBB Act
• Identify the plethora of K-1 info required (built-in gains lying in wait, disregarded entity partners, new tiered partnership reporting and more)
• Identify tax basis capital account reporting – What must be computed and disclosed (and by when)
• Identify the basic computation for a partner’s capital account

Level
Update

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
Basic understanding of tax preparation.

Advance Preparation
None