Purpose of Schedule K-1
Although the corporation may have to pay a built-in gains tax and an excess net passive income tax, you are liable for income tax on your share of the corporations income, whether or not distributed, and you must include your share on your tax return if a return is required. Your distributive share of S corporation income is not self-employment income and it is not subject to self-employment tax.
For more information, see the Instructions for the Scedule K1-1120S on the IRS Website.