When should a K-1 be included on corporate tax return with different fiscal year?

14 Thanks, that makes sense. But what if we receive a 2024 K-1 after we've already filed our corporate return for the fiscal year ending Sept 30, 2025? Do we have to amend? Also, does this same rule apply for foreign partnerships?

8 If you receive the 2024 K-1 after filing your corporate return that ends September 30, 2025, you would generally need to file an amended return to properly report the K-1 information. This is why many corporations with this situation will extend their return filing to ensure they have all K-1s. For foreign partnerships, the same general timing rule applies - you include the K-1 (or equivalent foreign reporting) on your return that encompasses the end of the partnership's tax year. However, foreign partnerships may have additional reporting requirements through forms like 8865 depending on your ownership percentage and other factors.

16 Did it handle any special allocations or Section 754 step-up calculations? Our partnerships are pretty complex and I'm wondering if this could help with the more technical aspects too.

19 How does it work with amended K-1s? We constantly get revised K-1s from our partnerships months after the original, and it's a nightmare trying to figure out what needs to be amended and what doesn't.

11 Yes, it does handle special allocations - it breaks down all the different income types and shows how they should flow through to your specific return. The Section 754 calculations were actually one of the more helpful features for us since those are complicated to track manually. For amended K-1s, that's exactly one of the problems it solved for us. The system flags what changes would trigger an amendment requirement versus what falls below materiality thresholds. We used to amend everything to be safe, but now we have clear guidance on what actually needs amendment.

22 How exactly does this service work? Do they just call the IRS for you? Couldn't I just do that myself if I'm willing to wait on hold?

16 I'm very skeptical about this. The IRS agents I've spoken with in the past have given incorrect information multiple times. Did you get anything in writing that actually protects you if audited?

7 The service essentially calls the IRS and waits on hold for you. When an agent finally picks up, you get a call back to connect with them. You absolutely could do it yourself if you're willing to wait on hold for potentially hours, but most business owners or tax professionals find their time is too valuable to spend waiting. No, they don't provide written documentation of the call. You're right that verbal advice from IRS agents isn't binding protection in an audit. I still found it valuable to get clarification directly, but I also documented the conversation myself including the agent's ID number for my records. For definitive protection, you'd want a private letter ruling, but that's a much more involved and expensive process.

5 Can you explain more about this? If we're a fiscal year corp (ending 6/30) with a calendar year partnership investment, when would we need to make these estimated payments? Is it based on projected K-1 income?

3 The estimated tax payment requirements for corporations are based on your expected tax liability for the current tax year. If your partnership interest generates significant income, you would need to factor that in when calculating your quarterly estimated payments. For your specific situation with a 6/30 fiscal year end and a calendar year partnership, you would need to make reasonable estimates of what the K-1 income will be for the calendar year that ends within your fiscal year. This can be tricky since you won't have the actual K-1 until after calendar year-end. Many corporate partners use prior year K-1 information adjusted for any known changes, or they get interim estimates from the partnership.

18 Does that rule apply if multiple related corporations collectively own more than 50%, but individually own less? Like if my corp owns 30% and our sister company owns 25%?

Yes, related corporations are generally aggregated for purposes of the majority interest taxable year rule. If your corporation and the sister company are considered related (typically meaning one owns 50% or more of the other, or they have common ownership), then your combined 55% ownership would trigger the majority interest rule. However, there are some nuances here. The "majority interest taxable year" is determined by looking at the partners who have the same tax year and collectively hold more than 50% of partnership capital and profits interests. So if both your corporations have the same fiscal year end, then yes, the partnership would generally need to adopt that fiscal year. This gets complex quickly, so you'd want to review IRC Section 706(b) and the related regulations, or consult with a tax professional familiar with partnership tax year rules if you think this might apply to your situation.

This is really helpful advice about maintaining the character of income. I'm dealing with a similar situation and hadn't considered how Section 1231 gains would flow through differently. Do you happen to know if there are any special rules for how depreciation recapture from the partnership gets reported on the corporate return? Our partnership owns rental properties and I want to make sure we're handling any depreciation recapture correctly when it eventually gets triggered.