Am a partner in an Scorp that does not make profit but have income.I receive no money myself,yet I still get K1's.can I leave this partnership and stop having to pay K1s?

Can you provide some additional details:
1) How many shareholders
2) What is your ownership percentage
3) Do you work for this corporation or are you just an investor
4) Please clarify "does not make profit but have income".  Seems contradictory

2 shareholders, myself and my business partner. We each own 50%. I work for the corporation but the company is essentially folding up, though not in the legal sense. I still generate income for the company part time. But neither myself nor my business partner receive salary or profit distributions anymore.

"can I leave this partnership"  That is a legal and contractual question, not an income tax one

I will provide some commentary and thoughts to help you in reaching a decision:

1. S corporations are pass-through entities, and as such, all earnings pass through to the shareholders and are taxed at the individual level.
2. Since the income is taxed at the shareholder level, S corporations typically make distributions to cover the tax impact that the shareholder incurs.
3. Your facts state "...make no profit".  If that is the case, then your comment "...stop having to pay K-1's" does not make sense.  If the S corporation is not making a profit, then your K-1 is not passing through profit and hence there should not be any tax implications to the shareholder.
4. As an S corporation shareholder, you should be maintaining a basis schedule of your investment in this business.  This starts with your initial capital contribution, any subsequent capital contributions and is adjusted annually by the applicable lines on your K-1.  The basis schedule is extremely important as it provides the information as to whether losses can be deducted by the shareholder and ultimately provides the information to determine a gain or loss upon disposition of the S corporation stock.
5. Until you sell your S corporation stock, you are required to continue to report the activity on the K-1 you receive.
6. Consider asking the other shareholder if they want to purchase your stock.  Keep in mind that you will need to know your basis to determine your gain or loss on this sale.
7. The comment "...the company is essentially folding up, though not in the legal sense" seems to indicate that you should have some internal discussion as to the viability of the business model and whether the business should continue or liquidate (legally).

I thought I read that K1's were reported for any income,  the pass through taxes were for any income at all. Am I mistaken?

" If the S corporation is not making a profit, then your K-1 is not passing through profit and hence there should not be any tax implications to the shareholder."

This statement needs to be clarified because there certainly ARE tax implications, even in a situation where the S-Corp is sustaining losses.   Those losses REDUCE YOUR BASIS in the S-Corp stock, affecting your capital gain or loss when you sell your stock.

"I thought I read that K1's were reported for any income,  the pass through taxes were for any income at all. Am I mistaken?"

I don't really understand that sentence.  ALL ACTIVITY of the S-Corp - income, loss, distributions, activities that require special handling on your personal income tax return, etc. - MUST pass through to the shareholders.  As long as the S-Corp exists the S-Corp must issue its income tax returns - Form 1120S - and the associated Schedule K-1(s) to its shareholders and the shareholders must consider how these Schedule K-1's affect their individual income tax returns.

Tom, I made the comment that you reference in your first parens.  The point of the comment to the OP is that if the S corporation is not making any profit, then the K-1 is not passing through profit and the shareholder should not have any tax to pay at the 1040 level.

No question there are other implications, basis adjustments, but the OP is asking about current tax implications.  If no S corp income then there should not be any current tax implications at the 1040 level.

JR.  The K-1 that you receive as a shareholder reflects the activity of the S corporation.  While the S corporation can generate income, that does not mean there is "net income".  Net income (income less expenses) is what is passed through to the S shareholder on the K-1 Part III line 1.

In addition, the S corporation is required to separately state a number of items, which are also reflected on your K-1.  If the S corporation has interest income from a bank, then this figure is separately stated on the K-1.  Even though the S corporation reflects a net loss from operations on line 1 of the K-1, you will still pick up the interest income that is also reported on the K-1 in line 4.  Other separately stated items would include any capital gains or losses.

Just once again, if the S corporation is not generating any current year profit (income less expenses), you should not have any current year tax to pay at the shareholder level (your 1040).  You don't indicate what type of income the company generates to provide additional clarification as to whether separately stated capital gains or losses are a significant factor for the company.

S corporations K-1's can be confusing and complicate the preparation of an individual 1040.  You may want to seek the advice of a tax professional who can spend an hour with you one on one to help you understand the tax implications of the K-1 to you as a shareholder.

Rick19744, this has been very helpful, thank you. At the very least I have a direction to follow to reexamine certain issues.

You're welcome.

Hopefully this thread is "active." Similar situation to the answer you gave.  I received a K-1 that listed business income, although I never received the income.  Called one of my partners and he said the income was my percentage of the business money that is in the bank, and I have to pay the tax on my share. Sounded kind of funny, I trust him, is this true?  Thank you.

Yes.

You sometimes earn money in an investment that doesn't get sent to you.  In that case what has happened is that the money that you earned - and are being taxed on - is being reinvested on your behalf.  In this case the business is taking your share of the earnings and using it to grow the business which will theoretically grow your investment.  

So, technically, you got the money and spent it on helping the business out.  You're taxed on money that you get, not on how you spend it.  And you spent your money (without any input from you, granted) on taking care of the business.

Thank you, Robert, very helpful.