Instructions For Form 8810 (2015) (Page 9 of 14) in pdf

(a) Loss From

Name of Activity

(b) Ratio

Worksheet 2, Column (e)

and Losses

▶

Totals . . . . . . . . . . . . . . . . . . . . . . . . . .

1.00

Worksheet 4

On Form 4797, report the $2,000 loss and

column. Enter the deductions allowed for

the $5,000 gain. On Worksheet 4, enter the

Form 1120 on the proper lines of Form 1120.

Use Worksheet 4 to allocate the unallowed

$17,143 of unallowed deductions allocated

Enter the allowed losses on the appropriate

deductions and losses for each activity

to Form 1120 in column (c) on the line for

forms.

among Form 1120 deductions and any

total Form 1120 deductions. Enter the $857

losses to be reported on Form 4797 and

Publicly Traded

of unallowed Form 8949 losses in column (c)

Form 8949 (and Schedule D (Form 1120), as

of line 2. Use Worksheet 4 to allocate the

Partnerships (PTPs)

applicable).

$17,143 to the Form 1120 deductions and

A PTP is a partnership whose interests are

show the allowed and unallowed Form 8949

If the unallowed loss is reported on one

traded on an established securities market or

loss.

form or schedule, skip the following example

are readily tradable on a secondary market

and complete Worksheet 4.

Line 1, column (a). Enter the current year

(or its substantial equivalent).

deductions for each Form 1120 expense

If the unallowed loss is from losses

An established securities market includes

(Worksheet 1, lines 6a through 6l) plus any

reported on more than one form or schedule,

any national securities exchange and any

prior year unallowed Form 1120 deduction

allocate the unallowed loss from among the

local exchange registered under the

for that activity. For example, if Worksheet 1,

net losses as follows.

Securities Exchange Act of 1934 or

line 6i shows current year depreciation for

Example. The corporation has one passive

exempted from registration because of the

the activity of $2,200, and the activity had

activity. The activity has an unallowed loss of

limited volume of transactions. It also

prior year unallowed depreciation of $1,200,

$18,000 in Worksheet 3, column (c), and the

includes any over-the-counter market.

enter $3,400 on Worksheet 4, line 1i, column

following net losses and net gain.

(a).

A secondary market generally exists

where a person stands ready to make a

Line 2, column (a). Enter any Form 8949

Form 1120

market in the interest. An interest is treated

losses (or any Schedule D (Form 1120)

Gross receipts

$100,000

losses, as applicable) from Worksheet 1,

as readily tradable if the interest is regularly

Deductions

120,000

quoted by persons, such as brokers or

line 8, plus any prior year unallowed losses

Net loss

($20,000)

dealers, who are making a market in the

from the 2014 Form 8949 for that activity.

interest.

Line 3, column (a). Enter any Form 4797

losses from Worksheet 1, line 9, plus any

The substantial equivalent of a secondary

market exists where there is no identifiable

Form 8949

Form 4797

prior year unallowed Form 4797 losses for

market maker, but holders of interests have a

Gain

$1,000 Gain

$5,000

that activity.

Loss

(2,000) Loss

(2,000)

readily available, regular, and ongoing

Line 1, column (b). Divide each of the

opportunity to sell or exchange interests

Net loss

($1,000) Net gain

$3,000

individual Form 1120 deductions shown in

through a public means of obtaining or

column (a) by the total of all of the Form

providing information on offers to buy, sell, or

1120 deductions in column (a) and enter the

exchange interests. Similarly, the substantial

Add the net losses of $20,000 and

ratio for each of the deductions in column

equivalent of a secondary market exists

$1,000, for a total of $21,000. Divide the net

(b). The total of the ratios must equal 1.00.

where prospective buyers and sellers have

loss reported on each form by the total of the

the opportunity to buy, sell, or exchange

Column (c). Allocate the portion of the loss

net losses, and multiply the result by the

interests in a timeframe and with the

in Worksheet 3, column (c), among the Form

unallowed loss of $18,000, as shown below.

regularity and continuity that the existence of

1120 deductions by multiplying the

unallowed loss attributable to the total Form

a market maker would provide.

Form

$20,000

1120 deductions by each of the ratios in

x $18,000= $17,143

Special Instructions for PTPs

1120:

$21,000

column (b). Enter the portion of the

Section 469(k) provides that the passive

unallowed loss in Worksheet 3, column (c),

activity rules and limitations must be applied

that is attributable to a Form 8949 (or

separately to items from each PTP.

Schedule D (Form 1120)) or Form 4797 loss

$1,000

Form 8949:

x $18,000 = $857

in column (c) of this worksheet.

$21,000

Losses from passive activities the

corporation holds through a PTP generally

Column (d). Subtract column (c) from

can be used only to offset income or gain

column (a) and enter the results in this

from passive activities of the same PTP. Any

Instructions for Form 8810 (2015)

-9-

Instructions For Form 8810 (2015) Page 9

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