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 includes:
Royalty income is in scope for the VITA/TCE Program only when the source document of the royalty income is a Schedule K-1. For these investors, the depletion allowance would already have been figured for them by the partnership or S corporation. Royalty income reported on Form 1099-MISC continues to be out of scope.
Any other income, deductions, credits, etc., reported on Schedule K-1 is out of scope for VITA/TCE, and the taxpayer should be referred to a professional tax preparer.