K-1 box 11 code ZZ and codes A to S: other income on Schedule K-1 (Form 1065)
K-1 box 11 codes are the letter codes a partnership uses on Schedule K-1 (Form 1065) to report a partner's other income (loss) that doesn't fit boxes 1 to 10, from other portfolio income (code A) to cancellation of debt (code E). Code ZZ covers any other item, explained on an attached statement.
“The partnership will report portfolio income other than interest, ordinary dividend, royalty, and capital gain (loss) income, and attach a statement to tell you what kind of portfolio income is reported.” IRS, Partner’s Instructions for Schedule K-1 (Form 1065) (2025)
What does K-1 box 11 report?
K-1 box 11 reports the partner's share of other income (loss) that doesn't belong in boxes 1 through 10, because the partner needs it separately to apply a specific rule on their own return. According to the Partner's Instructions for Schedule K-1 (Form 1065) (2025), the partnership identifies each item with a letter code from A to S, with codes G, H and T to X reserved and code ZZ for anything else.
Code A is portfolio income other than interest, dividends, royalties and capital gain, which isn't subject to the passive activity rules. Codes C, M, N, O, Q and S are capital-type items that go through Form 6781, Form 8949 or Schedule D. Codes B, I, L, P and R are business property items for Form 4684 or Form 4797. Code E is cancellation of debt and code F is the net positive section 743(b) adjustment, which can arise after a transfer of an interest when the partnership has a section 754 election in place.
Where does each box 11 code go?
Each 2025 box 11 code goes to a specific form and line on an individual partner's return, according to the code-by-code instructions in the 2025 partner's instructions. The table lists every code, including reserved ones.
| Code | Meaning (2025) | Where it goes |
|---|---|---|
| A | Other portfolio income (loss) | Per the statement; REMIC items on Schedule E, line 38 |
| B | Involuntary conversions | Form 4684, Part II, line 34 |
| C | Section 1256 contracts and straddles | Form 6781 |
| D | Mining exploration costs recapture | Section 617 recapture, per the statement |
| E | Cancellation of debt | Schedule 1, line 8c, unless excluded on Form 982 |
| F | Section 743(b) positive income adjustments | With the item adjusted; detail in box 20, code U |
| G and H | Reserved for future use | None |
| I | Gain (loss) from disposition of oil, gas, geothermal, or other mineral properties (section 59(e)) | Form 4797, Part I (loss) or Part III (gain) |
| J | Recoveries of tax benefit items | Schedule 1, line 8z |
| K | Gambling gains and losses | Schedule 1, line 8b, and Schedule A, line 16; Schedule E if a gambling business |
| L | Income, gain, or loss from a section 751(b) distribution | Form 4797, Part II, line 10 |
| M | Gain eligible for section 1045 rollover (replacement stock purchased by partnership) | Schedule D and Form 8949 |
| N | Gain eligible for section 1045 rollover (replacement stock not purchased by the partnership) | Schedule D and Form 8949 |
| O | Sale or exchange of QSB stock with section 1202 exclusion | Schedule D and Form 8949 |
| P | Gain or loss on disposition of farm recapture property and other items to which section 1252 applies | Form 4797, Part III, line 27 |
| Q | Gain or loss on Fannie Mae or Freddie Mac qualified preferred stock | Schedule D, line 5 or 12 |
| R | Specially allocated ordinary gain (loss) | Form 4797, Part II, line 10 |
| S | Non-portfolio capital gain (loss) | Schedule D, line 5 (short-term) or 12 (long-term) |
| T to X | Reserved for future use | None |
| ZZ | Other | Per the statement; passive losses through Form 8582 |
For codes M and N, the partner can make or opt out of the section 1045 rollover, and must notify the partnership in writing if they opt out. For code O, the partner can claim the section 1202 exclusion only if they held their interest when the partnership acquired the stock and at all times until it was sold. For code K, gambling losses are deductible only up to winnings. For code E, a partner excluding cancellation of debt income under section 108 uses Form 982, which is also where the section 108(b)(5) election to reduce the basis of depreciable property is made. Corporate partners aren't eligible for the section 1045 rollover or the section 1202 exclusion.
How do you report K-1 box 11 code ZZ?
K-1 box 11 code ZZ covers any other income or loss information the partner may need to file their return, and the attached statement explains what each amount is. The Partner's Instructions for Schedule K-1 (Form 1065) (2025) give no fixed line for code ZZ, so the destination depends on what the statement says the item is.
A loss under code ZZ that is a passive activity amount to the partner goes through Form 8582 before it reaches the return, and if item D is checked, the partner follows the PTP rules instead. Prior-year amounts that were limited, such as losses suspended by basis or at-risk rules, aren't netted with code ZZ amounts on supporting schedules, except for passive losses. The character on the statement controls: an ordinary item stays ordinary and a capital item goes to Schedule D. If the statement is missing or doesn't identify the item, request it from the partnership. Form 8582 covers the passive side.
What does a box 11 code C calculation look like?
For example, Morgan's 2025 K-1 shows a $12,500 net gain in box 11, code C, from the partnership's section 1256 contracts. Morgan has no section 1256 contracts outside the partnership, no Form 1099-B adjustment and no net section 1256 loss carryback election, so the K-1 amount goes straight onto Form 6781, Part I.
| Step | Form and line | Amount |
|---|---|---|
| Box 11, code C net gain | Form 6781, line 1 | $12,500 |
| Net gain (no Form 1099-B adjustment, no carryback) | Form 6781, line 7 | $12,500 |
| Short-term portion, 40% | Form 6781, line 8, to Schedule D, line 4 | $5,000 |
| Long-term portion, 60% | Form 6781, line 9, to Schedule D, line 11 | $7,500 |
Morgan reports $5,000 as short-term and $7,500 as long-term capital gain, whatever the partnership's actual holding period was. According to the Instructions for Form 6781, lines 6 through 9 don't apply to partnerships, so the partnership reports the net amount in box 11, code C and each partner applies the 60/40 split on their own Form 6781. A partner who reports the full $12,500 as long-term on Schedule D, line 12 understates short-term gain.
What do reviewers check on K-1 box 11?
A reviewer checking K-1 box 11 confirms six items, each tied to the 2025 IRS instructions. The box 11 statement comes first, because most codes carry detail that decides the form and line, and code ZZ has no fixed destination at all. The prior-year return comes second, for section 1256 carryback elections, gambling activity and any section 1045 rollover elections. For box 11, code F and box 13, code V, the section 743(b) detail in box 20, code U should be in the file, because the adjustment is reported with the partnership item it changes. Code E needs the partner's own facts, such as insolvency, before any Form 982 exclusion. The Schedule K-1 (Form 1065) page maps every other box.
Every line checked against the documents the client sent
Filed reads the partner's K-1 and every box 11 statement, then checks each code against the form and line it should land on. Anything that doesn't tie comes back as a review item with a citation to the source.
Book a demoSchedule D line 12 includes the full $12,500 from box 11 code C, and no Form 6781 is attached. Confirm whether the gain should go through Form 6781 as $5,000 short-term and $7,500 long-term.
Common questions
What is K-1 box 11 code ZZ?
K-1 box 11 code ZZ is the other category for income (loss) items that don't have their own box 11 code. The 2025 partner's instructions describe it as any other information you may need to file your tax return, so the attached statement decides where it goes, and passive losses still go through Form 8582.
Where does K-1 box 11 code E go?
K-1 box 11 code E, cancellation of debt, generally goes on Schedule 1 (Form 1040), line 8c as income, according to the 2025 partner's instructions. A partner who qualifies to exclude it under section 108 files Form 982 instead, and can elect under section 108(b)(5) to reduce the basis of depreciable property.
Is K-1 box 11 code A passive income?
K-1 box 11 code A isn't passive income. The 2025 partner's instructions treat other portfolio income in code A as portfolio income, which isn't subject to the passive activity limitations even when the partner doesn't materially participate. The attached statement says what kind of portfolio income it is, which decides the line it goes on.