One of the hardest things to explain to the average tapayer is that K-1s don't have to be issued by April 15. In fact, current rules allow partnerships and trusts to issue K-1s with extended returns as late as October 15, which is also the extended due date for 1040s - and is after the due date for corporate returns. That creates an obvious problem for folks using the K-1s. K-1s are the the forms issued by partnerships, S corporations and trusts to report their income to their owners, who have to then report up the K-1 income on their own returns.
Yesterday the IRS announced (IR 2008-84) a rule change that will give taxpayers at least a little time to incorporate K-1s in their 1040s. Starting with next filing season, the extended due date for partnerships and trusts will be September 15. Extended S corporation returns are already due September 15. The new extension deadline applies to returns due after January 1, 2009, which means it takes effect for partnership years ending on September 30, 2008.
Additional coverage at the Tax Info Blog.
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