Form 1120-S Schedule K Lines 5 to 10 (2025)

Updated October 18, 2026. Quick answer: Schedule K lines 5 to 10 carry the S corporation’s dividends, royalties, capital gains, section 1231 gain and any other income that has no line of its own. Most lines point to a specific schedule or form, such as Schedule D (Form 1120-S) or Form 4797, and line 10 is an open line where the corporation names the type of income.

Lines 5a and 5b: dividends

The form prints “Ordinary dividends” on 5a and “Qualified dividends” on 5b. For 5a the instructions say “Enter only taxable ordinary dividends on line 5a, including any qualified dividends reported on line 5b.”

For 5b: “Enter qualified dividends on line 5b.” The instructions say “qualified dividends are dividends received from domestic corporations and qualified foreign corporations”, and then list exceptions that start “The following dividends aren’t qualified dividends.” The first is “Dividends the corporation received on any share of stock held for less than 61 days during the 121-day period that began 60 days before the ex-dividend date.” For more detail they say “See Pub. 550, Investment Income and Expenses, for more details.” The shareholder’s share goes in Schedule K-1 boxes 4 to 6. The same dividend terms appear on the individual side at Form 1099-DIV box 2a.

Line 6: royalties

Line 6 is one sentence in the instructions: “Enter the royalties received by the corporation.” For the shareholder copy: “Enter each shareholder’s pro rata share of royalties in box 6 of Schedule K-1.”

Lines 7 to 8c: capital gains and losses

For line 7: “Enter the gain (loss) that is portfolio income (loss) from Schedule D (Form 1120-S), line 7.” The form’s caption is “Net short-term capital gain (loss) (attach Schedule D (Form 1120-S))”. For line 8a the instruction is the same with a different source line: “Enter the gain or loss that is portfolio income (loss) from Schedule D (Form 1120-S), line 15.”

A caution follows: “If any gain or loss from line 7 or 15 of Schedule D is from the disposition of nondepreciable personal property used in a trade or business, it may not be treated as portfolio income.” The same instructions name the destination: “report it on line 10 of Schedule K”.

For line 8b the instructions say “A collectibles gain (loss) is any long-term gain or deductible long-term loss from the sale or exchange of a collectible that is a capital asset.” and “Collectibles include works of art, rugs, antiques, metal (such as gold, silver, or platinum bullion), gems, stamps, coins, alcoholic beverages, and certain other tangible property.”

For line 8c: “The three types of unrecaptured section 1250 gain must be reported separately on an attached statement to Form 1120-S.” The three are “From the sale or exchange of the corporation’s business assets.” and “From the sale or exchange of an interest in a partnership.” and “From an estate, trust, REIT, or RIC.” Shareholders meet the same terms on the individual worksheets at Schedule D line 19 and Schedule D line 18. The box 7 and 8 shareholder pages are at Schedule K-1 boxes 7 to 8.

Line 9: net section 1231 gain (loss)

The instructions say “Enter the net section 1231 gain (loss) from Form 4797, line 7.” They add “Don’t include net gain or loss from involuntary conversions due to casualty or theft.” The form’s caption is “Net section 1231 gain (loss) (attach Form 4797)”. The Form 4797 part that produces line 7 is explained at Form 4797 lines 7 to 9, and the shareholder copy is Schedule K-1 box 9.

Line 10: other income (loss)

The form prints “Other income (loss) (see instructions)”. The instructions say “Enter any other item of income or loss not included on lines 1 through 9.” They add “On the line to the left of the entry space for line 10, identify the type of income.” When there is more than one type, “attach a statement to Form 1120-S that separately identifies each type and amount of income”.

The instructions list categories, each with a code for Schedule K-1. Examples: “Report net loss from involuntary conversions due to casualty or theft.” for code B; “Report any net gain or loss from section 1256 contracts from Form 6781” for code C; “Gambling gains and losses subject to the limitations in section 165(d).” for code K; “Any gain or loss from line 7 or 15 of Schedule D that isn’t portfolio income” for code S; and “Include any other type of income (loss) not reported using codes A through S.” for code ZZ. The code-by-code shareholder pages start at Schedule K-1 box 10.

Where the number comes from

Lines 5a, 5b and 6 come from the corporation’s records of dividends and royalties received. Lines 7 and 8a come from Schedule D (Form 1120-S), line 8b and 8c are figured from the gain reported there and on Form 4797, line 9 comes from Form 4797, and line 10 comes from whatever other items the corporation has, listed by type on a statement.

Where it goes next

These lines flow to the shareholders and into the reconciliation. The form’s line 18 caption begins “Combine the total amounts on lines 1 through 10.” The instructions also have a reminder that applies before you enter these items: “reduce each item of passive investment income (within the meaning of section 1362(d)(3)(C)) by its proportionate share of the net passive income tax (Form 1120-S, page 1, line 23a)”. The earlier income lines are on the lines 1 to 4 page and the deductions start on the lines 11 to 13 page. The whole return is explained at Form 1120-S.

Edition and line numbers

This page reads the 2025 Form 1120-S and its 2025 instructions, the current files irs.gov served on 2026-10-18. They are the files for the tax year 2025 return, filed in 2026. The title line of the form reads “U.S. Income Tax Return for an S Corporation” and the header reads “For calendar year 2025 or tax year beginning”. Check the tax year printed on the form you are filling in and use that year’s line numbers, because a different year’s form can number or word its lines differently.

Common mistakes

• Reporting nondepreciable business property gain as portfolio income. The instructions say it “may not be treated as portfolio income.”
• Including casualty or theft in line 9. The instructions say “Don’t include net gain or loss from involuntary conversions due to casualty or theft.”
• Leaving line 10 unlabeled. The instructions say “On the line to the left of the entry space for line 10, identify the type of income.”

Related: Form 1120-S, Schedule K-1 boxes 4 to 6, Schedule K-1 boxes 7 to 8, Schedule K-1 box 9, and Schedule K-1 box 10.

Sources

• Instructions for Form 1120-S, U.S. Income Tax Return for an S Corporation (2025): https://www.irs.gov/pub/irs-pdf/i1120s.pdf
• Form 1120-S, U.S. Income Tax Return for an S Corporation (2025): https://www.irs.gov/pub/irs-pdf/f1120s.pdf

Read from the IRS documents linked above on October 18, 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.