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What is the difference between separately and nonseparately stated items for an S corp?

The important thing to understand is that S Corporations are a type of passthrough entity, which means that the shareholders’ pay the tax. However, there are certain items that are nonseparately stated, which means that they are included on the tax return for the S Corp. Nonseparately stated items are items that occur in the normal course of business:

Separately stated items are items that are included on the K-1 for the shareholder of the S Corp. Separately stated items would include:


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  • For an S corporation, what items are separately stated on shareholder K-1s?

    Certain types of items are excluded from the S corporations business operations and would be included on the K-1 for its shareholders: The visual below outlines items that are normal course of business and would be classified as nonseparately stated items (included in the tax return for the S Corp):