How and where can income be reported?
Income reported on Schedule K-1 will be included on the taxpayer's return in various places depending on the type of income. Income reported on Schedule K-1 that is within the scope of VITA/TCE programs includes:
Royalty income is in scope for the VITA/TCE programs only when the source document of the royalty income is reported on Schedule K-1 or Form 1099-MISC, Box 2, Royalties, with no associated expenses. For these investors, the depletion allowance would already have been figured for them by the partnership or S corporation. Any other income, deductions, credits, etc., reported on Schedule K-1 is out of scope for the VITA/TCE programs, and the taxpayer should be referred to a professional tax preparer.