Key Takeaways
- Form 1065 is due March 15 for calendar-year partnerships (6-month extension available).
- Partnership is a pass-through—files information return, pays no tax.
- Schedule K summarizes all items; Schedule K-1 shows each partner share.
- Late filing penalty is $235 per partner per month (Tax Year 2024).
- Partnerships with 100 or fewer eligible partners can elect out of CPAR.
- Small partnerships may be exempt from K-2/K-3 international reporting.
Last updated: January 2026
Form 1065 Overview
Why This Matters for the Exam
Form 1065 is the core partnership return. The exam tests due dates, the pass-through concept, and K-1 reporting.
Expect at least 3-4 questions on Form 1065.
Who Files Form 1065?
| Entity Type | File Form 1065? |
|---|---|
| General partnership | Yes |
| Limited partnership (LP) | Yes |
| Limited liability partnership (LLP) | Yes |
| LLC (partnership treatment) | Yes |
| LLC (S corp election) | No—file 1120-S |
Pass-Through Taxation
The partnership does not pay income tax:
| Level | Tax Treatment |
|---|---|
| Partnership | No federal income tax |
| Partners | Taxed on distributive share |
| Form 1065 | Information return only |
Filing Deadlines (Tax Year 2024)
| Return | Original Due Date | Extended Due Date |
|---|---|---|
| Calendar year | March 15, 2025 | September 15, 2025 |
| Fiscal year | 15th of 3rd month after year end | 6 months later |
Extension: Form 7004
| Detail | Information |
|---|---|
| Form | Form 7004 |
| Length | 6 months automatic |
| Due date | Same as original return |
Late Filing Penalties (Tax Year 2024)
| Penalty | Amount |
|---|---|
| Per partner per month | $235 |
| Maximum months | 12 months |
| Example (4 partners, 3 months late) | $235 × 4 × 3 = $2,820 |
Schedule K and Schedule K-1
| Schedule | Purpose |
|---|---|
| Schedule K | Partnership-level summary of all items |
| Schedule K-1 | Each partner's share of items |
Schedule K-1 Key Boxes
| Box | Item |
|---|---|
| 1 | Ordinary business income (loss) |
| 2 | Net rental real estate income (loss) |
| 8a | Net short-term capital gain (loss) |
| 9a | Net long-term capital gain (loss) |
| 12 | Section 179 deduction |
| 13 | Charitable contributions |
| 20 | Other information (including QBI) |
Centralized Partnership Audit Regime (CPAR)
Under CPAR, IRS audits the partnership and assesses tax at partnership level.
| Requirement | Detail |
|---|---|
| Elect out | 100 or fewer eligible partners |
| Eligible partners | Individuals, C corps, S corps, estates |
| Not eligible | Partnerships, trusts, disregarded entities |
| Procedure | Check "Yes" on Schedule B, attach B-2 |
Schedule K-2/K-3 (International)
| Requirement | Threshold |
|---|---|
| Small partnership exception | Receipts <$250k AND assets <$250k |
| Domestic filing exception | No foreign activity, all U.S. partners |
Real-World Scenario
Scenario: A 5-partner partnership files Form 1065 two months late without extension.
- Penalty: $235 × 5 partners × 2 months = $2,350.
- Avoidance: File Form 7004 by March 15 for automatic 6-month extension.
On the Exam
Expect 3-4 questions on Form 1065, typically:
- Due Date Questions: "When is Form 1065 due?"
- Penalty Questions: "What is the late filing penalty?"
- CPAR Questions: "Who can elect out of CPAR?"
The key is to remember: Due March 15 (extend to Sept 15). Pass-through = no entity tax. Penalty = $235/partner/month. CPAR elect-out for ≤100 eligible partners.
Test Your Knowledge
What is the original due date for a calendar-year partnership Form 1065?
A
B
C
D
Test Your Knowledge
A partnership with 3 partners files 4 months late. What is the penalty?
A
B
C
D
Test Your Knowledge
Which partnership can elect out of CPAR?
A
B
C
D