Tax and residency

Schedule K-1

Also called K-1, Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc..

Schedule K-1 (Form 1065) is the annual statement a partnership issues to each partner reporting that partner's distributive share of the partnership's income, gains, losses, deductions and credits, which the partner must then report on their own tax return whether or not any cash was actually distributed.

What it decides

A partnership pays no income tax of its own. It files Form 1065 as an information return and passes profits and losses through to its partners, so an EB-5 investor whose new commercial enterprise is a limited partnership or an LLC taxed as a partnership receives a K-1 rather than a dividend statement. Under 26 CFR 1.702-1(a) each partner takes the distributive share into account whether or not distributed, which is how an investor owes tax in a year the project paid out nothing. While the investor is still a foreign partner, meaning not yet a US person, 26 U.S.C. 1446 makes the partnership withhold on effectively connected taxable income allocable to that partner at the highest individual rate, and the partner claims that withholding as a credit under section 33 on their own return. The K-1 is due when the partnership return is due, 15 March for a calendar year partnership, but Form 7004 buys an automatic six month extension to September, which is why K-1s often land after the April deadline for individual returns and personal extensions are routine.

Governed by 26 U.S.C. 6031(a) and (b), 6072(b), 1446(a), (b)(2)(A) and (d)(1), read on uscode.house.gov. 26 CFR 1.702-1(a) and 26 CFR 1.6081-2(a), read through the eCFR renderer API at www.ecfr.gov/api/renderer/v1/content/enhanced. IRS, Partner's Instructions for Schedule K-1 (Form 1065), 2025 revision, which carries the words whether or not distributed, and IRS, About Form 1065, last updated 20 July 2026, for the pass-through description. Note that 26 U.S.C. 702(a) only lists the items a partner takes into account separately: the whether or not distributed rule is in the regulation, not in the statute, so 702(a) alone will not carry that clause.

Where this is explained properly

Pages here that go into schedule k-1 rather than mentioning it.

Maintaining Your Investment During the Conditional Period

Related terms

New commercial enterpriseA new commercial enterprise, usually shortened to NCE, is the for-profit entity formed in the United States that receives the EB-5 investor's capital and gives the investor an equity stake in return, and it is the enterprise the petition is built around.
Limited partnerA limited partner is an EB-5 investor holding a passive equity interest in a new commercial enterprise organized as a limited partnership, the position most regional center offerings put investors in, and one USCIS accepts as enough engagement in management without any operational role.
Individual Taxpayer Identification NumberAn Individual Taxpayer Identification Number, or ITIN, is a nine digit number the IRS issues on Form W-7 to someone who needs a US taxpayer identification number for federal tax purposes but is not eligible for a Social Security number, and it is issued for federal tax purposes only: it does not permit work and does not change immigration status.
State income taxState income tax is a second layer of income tax that most US states charge their residents on all income wherever earned, with residence fixed by each state's own statute rather than by the federal residency tests or by immigration status, so an EB-5 family can become resident of a state on facts that have nothing to do with the green card.
Worldwide incomeWorldwide income is the rule that a United States resident for tax purposes, including a green card holder whose residence is still conditional, is taxed on income from every source anywhere in the world and not only on income arising inside the United States.

Checked against primary sources on 10 August 2026. Back to the glossary