Each partners distributive share of the partnership's income must be reported. Code Section 702 establishes a list of items that must be separately stated at the partnership level so that their character can remain intact as the income and losses are passed through and reported at the partner level. Section 702(a) lists the following items that must be stated:
Net short-term capital gains and losses.
Net long-term capital gains and losses.
Section 1231 gains and losses,
Dividends eligible for a dividends-received deduction.
Taxes paid to a foreign country or to a U.S. possession.
The easiest way for me to think about these is to picture a K-1 (1120S). Separately stated items have their own box. Nonseparately stated items are included in box 1 (which is the amount from Form 1120S, page 1).