Form 1065 Schedule K Lines 5 to 11 (2025)

Updated October 18, 2026. Quick answer: Schedule K lines 5 to 11 report the partnership’s portfolio income and gains: interest, dividends, royalties, capital gains, section 1231 gain, and an open line for other income. Most lines point to a specific schedule or form, such as Schedule D (Form 1065) or Form 4797.

Line 5: interest income

The instructions say “Enter only taxable portfolio interest on this line.” They define it: “Taxable interest is interest from all sources except interest exempt from tax and interest on tax-free covenant bonds.” The partner-side box is at Schedule K-1 box 5.

Lines 6a to 6c: dividends and dividend equivalents

For line 6a: “Enter only taxable ordinary dividends on line 6a, including any qualified dividends reported on line 6b.”

For line 6b: “Enter qualified dividends on line 6b.” 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 partnership 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 line 6c: “Enter the amount of dividend equivalents as defined in section 871(m).” The partner copy is explained at Schedule K-1 box 6.

Lines 7 and 8: royalties and short-term capital gain

Line 7 is one sentence in the instructions: “Enter the royalties received by the partnership.” For line 8: “Enter the gain (loss) that is portfolio income (loss) from Schedule D (Form 1065), line 7.” The form caption is “Net short-term capital gain (loss) (attach Schedule D (Form 1065))”.

Lines 9a to 9c: long-term gain, collectibles and unrecaptured section 1250 gain

For line 9a: “Enter the gain or loss that is portfolio income (loss) from Schedule D (Form 1065), line 15.” A caution follows: “If any gain or loss from Schedule D, line 7 or 15, is from the disposition of nondepreciable personal property used in a trade or business, it may not be treated as portfolio income.” The caution continues, “Instead, report it on Schedule K, line 11”.

For line 9b 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 9c: “The three types of unrecaptured section 1250 gain must be reported separately on an attached statement to Form 1065.” The three are “From the sale or exchange of the partnership’s business assets.” and “From the sale or exchange of an interest in a partnership.” and “From an estate, trust, REIT, or RIC.” Partners meet the same terms on the individual worksheets at Schedule D line 19 and Schedule D line 18.

Line 10: net section 1231 gain (loss)

The instructions say “Enter the net section 1231 gain (loss) from Form 4797, Part I, line 7.” They add “Don’t include net gain or loss from involuntary conversions due to casualty or theft.” and send that amount elsewhere: “Report net gain or loss from involuntary conversions due to casualty or theft on Schedule K, line 11”. Form 4797 Part I is covered at Form 4797 Part I, and the partner copy at Schedule K-1 box 10.

Line 11: other income (loss)

The instructions say “Enter any other item of income or loss not included on lines 1 through 10.” and “Determine other income (loss) without regard to any amount reported on line 6c.” On the form, “On the line to the left of the entry space for line 11, identify the type of income.” When there are several, “If there’s more than one type of income, attach a statement to Form 1065 that separately identifies each type and amount of income”. Two of the categories the instructions name are “Portfolio income not reported on lines 5 through 10.” and “Net gain (loss) from involuntary conversions due to casualty or theft.” This page does not walk through the remaining line 11 categories. The partner side is at Schedule K-1 box 11.

Where the number comes from

Lines 5, 6 and 7 come from the interest, dividend and royalty income the partnership received. Lines 8 and 9a come from Schedule D (Form 1065), line 10 comes from Form 4797, and line 11 comes from the separate statement the instructions call for. The lines just before this are on the lines 1 to 4 page.

Where it goes next

These lines flow into the analysis of net income on the next page, which starts “Combine Schedule K, lines 1 through 11.” See the analysis of net income (loss). The deductions follow on lines 12 to 14.

Edition and line numbers

This page reads the 2025 Form 1065 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. Form 1065 has no attach-to caption, so check the form’s own title and header instead. The title line reads “U.S. Return of Partnership Income” 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

• Including tax-exempt interest on line 5. The instructions say “Enter only taxable portfolio interest on this line.”
• Leaving casualty or theft gain in line 10. The instructions say “Don’t include net gain or loss from involuntary conversions due to casualty or theft.”
• Treating every Schedule D gain as portfolio income. The instructions say “it may not be treated as portfolio income.” for property used in a trade or business.

Related: Form 1065, Schedule K-1 box 5, Schedule K-1 box 6, Schedule K-1 box 10, and Form 4797 Part I.

Sources

• Instructions for Form 1065, U.S. Return of Partnership Income (2025): https://www.irs.gov/pub/irs-pdf/i1065.pdf
• Form 1065, U.S. Return of Partnership Income (2025): https://www.irs.gov/pub/irs-pdf/f1065.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.