Changes coming to Schedule K 1 Form 1065

[Lee B]

"The section of the partnership K-1 delineating partners’ share of debts of the partnership may be subject to modifications with the anticipated release of the 2023 draft version of Schedule 1065 Schedule K-1. A recent article penned by Kristen Parillo and published in Tax Notes Today on May 9, 2023,[1] provides coverage of a session held on May 5, 2023 at the American Bar Association Section of Taxation meeting. During the meeting, Adrienne Mikolashek, the IRS Deputy Associate Chief Counsel for Passthroughs and Special Industries, reportedly highlighted these prospective changes to the Schedule K-1.

The 2022 iteration of Schedule K-1, Form 1065, featured three lines that categorized a partner’s share of debts into recourse, qualified non-recourse, and non-recourse. As reported in the article, the IRS plans to subdivide the recourse liability category in 2023, thereby distinctly identifying debt restoration obligations and partner debt guarantees."

I fondly remember the words, Tax Simplification