Subchapter K

Subchapter K of the U.S. Internal Revenue Code governs the taxation of partnerships and LLCs treated as partnerships. It outlines how income, deductions, gains, and losses are passed through to individual partners or members, who report these items on their personal tax returns. Essentially, Subchapter K provides the rules for how multi-owner businesses divide profits and losses, ensuring each owner pays taxes only on their share, and clarifies partner responsibilities, allocations, and tax reporting obligations, maintaining transparency and fairness in partnership taxation.