Updated October 16, 2026. Quick answer: Box 6 of Schedule K-1 (Form 1065) splits your share of the partnership’s dividends into 6a ordinary dividends, 6b qualified dividends and 6c dividend equivalents. The 2025 partner instructions send 6a to Form 1040 or 1040-SR, line 3b, and 6b to line 3a, while 6c is not reported on Form 1040. Part of a dividend box can be excludable PTEP from a foreign corporation.
What box 6 reports
Part III shows three dividend lines: “Ordinary dividends”, “Qualified dividends” and “Dividend equivalents”.
“The partnership uses Schedule K-1 to report your share of the partnership’s income, deductions, credits, etc.” “Keep it for your records.” “Don’t file it with your tax return unless you’re specifically required to do so.”
“Although the partnership generally isn’t subject to income tax, you may be liable for tax on your share of the partnership income, whether or not distributed.” “Include your share on your tax return if a return is required.”
This page covers one box. The full walk through every box on the schedule is on the Schedule K-1 (Form 1065) boxes page.
Where each dividend line goes on your return
| Box | What the instructions say |
|---|---|
| 6a Ordinary dividends | “Report ordinary dividends on Form 1040 or 1040-SR, line 3b.” |
| 6b Qualified dividends | “Report any qualified dividends on Form 1040 or 1040-SR, line 3a.” |
| 6c Dividend equivalents | “Dividend equivalents aren’t reported on Form 1040 or 1040-SR.” |
The broker version of the ordinary and qualified split is on the 1099-DIV box 1a and 1b page. The schedule that lists interest and dividends is covered on the Schedule B page.
“If you’re an individual and the passive activity rules don’t apply to the amounts shown on your Schedule K-1, take the amounts shown and enter them on the appropriate lines of your tax return.” “If you aren’t an individual, report the amounts in each box as instructed on your tax return.”
“If the partnership reports a section 743(b) adjustment to partnership items, report these adjustments as separate items on Form 1040 or 1040-SR in accordance with the reporting instructions for the partnership item being adjusted.”
The year to report in depends on the partnership’s year end. “If you file your tax return on a calendar-year basis, but your partnership files a return for a fiscal year, report the amounts on your tax return for the year in which the partnership’s fiscal year ends.” “if the partnership’s tax year ends in February 2026, report the amounts on your 2026 tax return.”
Portfolio income and the PTEP exclusion
“Portfolio income or loss (shown in boxes 5 through 9b and in box 11, code A) isn’t subject to the passive activity limitations.” “Portfolio income includes income (not derived in the ordinary course of a trade or business) from interest, ordinary dividends, annuities or royalties, and gain or loss on the sale of property that produces such income or is held for investment.”
Box 6a carries a foreign corporation note. “Some of the amounts reported in this box may be attributable to PTEP in annual PTEP accounts that you have with respect to a foreign corporation and are therefore excludable from your gross income.” “Don’t include the amount attributable to PTEP in your annual PTEP accounts on Form 1040 or 1040-SR, line 3b.” Box 6b has the matching instruction for line 3a, and the source for the amount is named: “Use Schedule K-3, Part V, to determine your share of distributions by foreign corporations to the partnership that are attributable to PTEP in your annual PTEP accounts with respect to the foreign corporations.”
The Form 4952 election and the K-3 caution
A tip under box 6b concerns investment interest. “Qualified dividends are excluded from investment income, but you may elect to include part or all of these amounts in investment income.” “See the instructions for Form 4952, line 4g, for important information on making this election.” The form is explained on the Form 4952 page.
“If you have any foreign source qualified dividends, see the Partner’s Instructions for Schedule K-3 for additional information.”
The attached statement and dividend equivalents
“The partnership attached a statement to the Schedule K-1 identifying the dividends included in box 6a or 6b that are:” The four categories as printed:
| Category | As printed in the instructions |
|---|---|
| 1 | “Eligible for the deduction for dividends received under section 243(a), (b), or (c);” |
| 2 | “Eligible for the deduction for dividends received under section 245;” |
| 3 | “Eligible for the deduction for dividends received under section 245A; and” |
| 4 | “Hybrid dividends as defined in section 245A(e)(4).” |
Box 6c is different from the other two lines. “This information is provided for persons that aren’t U.S. persons, who are generally required to treat dividend equivalents as U.S. source dividends, and domestic partnerships with partners who may need this information.” “The ordinary dividends amount in box 6a doesn’t include the amount of dividend equivalents.”
The limits that apply before it reaches the return
“There are potential limitations on partnership losses that you can deduct on your return.” The order is stated too: “the basis limitations, the at-risk limitations, the passive activity limitations, and the excess business loss limitations.”
Basis comes first. “Generally, a partner may only claim their share of a partnership loss (including a capital loss) to the extent it doesn’t exceed their adjusted basis in the partnership at the end of the partnership’s tax year.” “Any losses and deductions not allowed can be carried forward.” Tracking the figure falls to you: “It’s the partner’s responsibility to track and maintain the information necessary to figure their adjusted basis in the partnership”. The capital account on the schedule does not substitute: “that information is based on the partnership’s books and records and can’t be used to figure the partner’s adjusted basis.”
The at-risk rules come next. “Generally, if you have (a) a loss or other deduction from any activity carried on as a trade or business or for the production of income by the partnership, and (b) amounts in the activity for which you aren’t at risk, you’ll have to complete Form 6198, At-Risk Limitations, to figure your allowable loss for the activity.” The form is explained on the Form 6198 page. “The at-risk rules generally limit the amount of loss and other deductions that you can claim to the amount you could actually lose in the activity.”
The last limit applies to business losses. “Your distributive share of losses attributable to all of the partnership’s trades or businesses may be limited under section 461(l).” “See Form 461, Limitation on Business Losses, and its instructions for more information.”
Corrections and matching
If a figure on the schedule looks wrong, the instructions give one route. “If you believe the partnership has made an error on your Schedule K-1, notify the partnership and ask for a corrected Schedule K-1.” “Don’t change any items on your copy of Schedule K-1.”
Items must also match what the partnership reported, but the instructions tie that rule to the centralized partnership audit regime. “If you’re a partner in a partnership that hasn’t elected out of the centralized partnership audit regime enacted by the Bipartisan Budget Act of 2015 (the BBA), you must report the items shown on your Schedule K-1 (and any attached statements) the same way that the partnership treated the items on its return.” If your treatment on an original or amended return is inconsistent with the partnership’s, “you must file Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR), with your original or amended return”.
Which revision applies
The edition read for this page is the 2025 Partner’s Instructions for Schedule K-1 (Form 1065) together with the 2025 Schedule K-1 (Form 1065) itself, which are the revisions irs.gov served when they were read on 2026-10-16. Check the revision printed on the Schedule K-1 you received, because a later revision can change the box layout, the codes and the reporting lines.
Common mistakes
- Entering the 6c dividend equivalents on Form 1040. The instructions say dividend equivalents aren’t reported on Form 1040 or 1040-SR, and that the 6a ordinary dividends amount doesn’t include them.
- Reporting PTEP as income. The instructions say not to include the amount attributable to PTEP in your annual PTEP accounts on line 3b or line 3a, and to use Schedule K-3, Part V, to find it.
- Ignoring the attached statement. The instructions say the partnership identifies on a statement the dividends in box 6a or 6b that are eligible for the section 243, 245 and 245A deductions or are hybrid dividends.
Related: 1099-DIV box 1a and 1b dividends, Schedule B (Form 1040), Form 4952 investment interest, Form 1040, and net investment income tax.
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Answer againSources
- 2025 Partner’s Instructions for Schedule K-1 (Form 1065): https://www.irs.gov/pub/irs-pdf/i1065sk1.pdf
- Schedule K-1 (Form 1065) (2025), Partner’s Share of Income, Deductions, Credits, etc.: https://www.irs.gov/pub/irs-pdf/f1065sk1.pdf
Read from the IRS documents linked above on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.