Definition - What does Schedule K-1 mean?
A schedule K-1 is a tax form through which an income tax earner can pass liability for their income to another party, often a beneficiary of this earned income.
Insuranceopedia explains Schedule K-1
The primary purpose of a K-1 form is to allow tax liability to be passed on. They are often used to manage assets for the beneficiaries of a trust since they allow them to circumvent the taxes on the assets.
A trust may file a schedule K-1 tax form for income that the trust earners but which is dispensed to a beneficiary.
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