What's a K-1 and why does it matter in divorce cases?
The K-1 is a key document in cases involving passthrough entities (S-corps, multi-member LLCs and Partnerships).
Each year an entity will prepare their tax returns and issue each of their partners/shareholders a K-1 which reports their proportionate share of income, distributions, and also contains other key information such as a partners ownership interest, among others.
The K-1 is not typically attached to a personal tax return, and will need to be requested separately. The information can be relevant in determining both i) ownership of assets for equitable distribution as well as ii) income for support purposes.
and have a Happy tax return Tuesday!
Check out our explanation on YouTube Shorts:
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