Do I need to pay taxes on this money that I never received from a 2016 K-1 with line 1 $2557 in ordinary business income?

[jam399566]

I bought a stock in April 2016 and never received any dividends or interest and never sold it.

[TomYoung · Accepted solution]

You fail to appreciate exactly what you bought here.  You purchased, I'd guess, an ETF, probably one that's organized as a "partnership".  Partnerships are "pass through" entities and what that means is that partnerships do not pay income taxes.  Instead they "pass through" to their partners each partner's proportionate share of their income, deductions, credits and so forth so - that's what the Schedule K-1 is doing - and then you report that activity on your own income tax return. 

This "pass through" is completely independent of the partnership sending any cash to you, or not.  In fact money distributed out of a partnership most commonly reduces your basis in the partnership, it's typically not an "income" event. 

So to answer your direct question, that answer is "Yes."

Tom Young