What this line means
The identifying information for each partnership and S corporation you are a partner or shareholder in. For each entity, enter the name, employer identification number (EIN), and check whether it is a partnership (P) or S corporation (S). Also check the boxes if a basis computation is required or if you are not at risk for some or all of your investment. Schedule E provides space for four entities on line 28 — additional entities require supplemental pages.
Does this apply to you?
- You received a Schedule K-1 (Form 1065) from a partnership
- You received a Schedule K-1 (Form 1120-S) from an S corporation
- You are a member of a multi-member LLC taxed as a partnership
- You own shares in an S corporation that passed through income or loss to you
Easy to overlook
Every K-1 you receive must appear on Schedule E Each partnership and S corporation that issues you a Schedule K-1 must be listed on line 28 with a corresponding entry in the income/loss columns. Receiving multiple K-1s from different investments — rental partnerships, syndications, business partnerships — is common for active investors. Missing a single K-1 creates a mismatch because the IRS receives a copy of every K-1 issued. 1 IRS Schedule E instructions — Line 28
The “basis required” checkbox is not optional If you are an S corporation shareholder, the IRS requires you to check the basis computation box and attach Form 7203. This form was introduced to enforce basis tracking that was previously done informally. Failing to check the box and attach Form 7203 flags the return for follow-up. 2 General filing pattern — missing K-1 entities on Schedule E
Watch out for this
Using the wrong EIN from the K-1. Some entities have multiple EINs (parent and subsidiary, for example). Use the EIN printed on the Schedule K-1 itself, which is the entity’s federal tax identification number. Transposing digits or using a different entity’s EIN causes a mismatch in IRS records.
Footnotes
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IRS Schedule E (Form 1040) Instructions, Line 28. https://www.irs.gov/instructions/i1040se ↩
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IRS Form 7203 Instructions, S Corporation Shareholder Basis. https://www.irs.gov/instructions/i7203 ↩