Form 1065 and Schedule K-1 are prepared according to the aggregate theory; however, special tax elections usually reflect the entity theory.

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Form 1065 and Schedule K-1 are prepared based on the aggregate theory, which treats the partnership as a collection of individuals rather than as a separate entity. However, certain tax elections such as electing to be taxed as a corporation may reflect the entity theory, which treats the partnership as a separate legal entity.

Form 1065 and Schedule K-1 Are Prepared According to the Aggregate