With a 1065 return, the partnership reports the income. In other words, all income paid to to the partnership, is reported by the partnership as income "to" the partnership, not to the individual partners. Whatever funds the individual partners take out of the partnership is called distributions. The partnership will then issue each individual partner a K-1 that shows what that partner was "distributed" by the partnership. Each partner will need their individual K-1's for their personal 1040 tax return.
