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Line 21—Nondeductible

basis of your partnership interest

2. Number of gallons of each fuel sold

immediately before the distribution

or used during the tax year for a

Expenses

(reduced by any cash received in the

nontaxable use qualifying for the credit for

The nondeductible expenses paid or

distribution), you may have to recognize

taxes paid on fuels, type of use, and the

incurred by the partnership are not

gain on the appreciated property. For

applicable credit per gallon. Use this

deductible on your tax return. Decrease

property contributed after June 8, 1997,

information to complete Form 4136,

the adjusted basis of your interest in the

the 5-year period is generally extended to

Credit for Federal Tax Paid on Fuels.

partnership by this amount.

7 years. See section 737 for details.

3. Your share of gross income from

Line 22—Distributions of

the property, share of production for the

Line 23—Distributions of

tax year, etc., needed to figure your

Money (Cash and Marketable

Property Other Than Money

depletion deduction for oil and gas wells.

Securities)

Line 23 shows the partnership’s adjusted

The partnership should also allocate to

Line 22 shows the distributions the

basis of property other than money

you a share of the adjusted basis of each

partnership made to you of cash and

immediately before the property was

partnership oil or gas property. See Pub.

certain marketable securities. The

distributed to you. In addition, the

535 for how to figure your depletion

marketable securities are included at their

partnership should report the adjusted

deduction.

fair market value (FMV) on the date of

basis and FMV of each property

4. Recapture of the section 179

distribution (minus your share of the

distributed. Decrease the adjusted basis

expense deduction. If the recapture was

partnership’s gain on the securities

of your interest in the partnership by the

caused by a disposition of the property,

distributed to you). If the amount shown

amount of your basis in the distributed

include the amount on Form 4797, line

on line 22 exceeds the adjusted basis of

property. Your basis in the distributed

17. The recapture amount is limited to the

your partnership interest immediately

property (other than in liquidation of your

amount you deducted in earlier years.

before the distribution, the excess is

interest) is the smaller of:

•

5. Recapture of certain mining

treated as gain from the sale or exchange

The partnership’s adjusted basis

exploration expenditures (section 617).

of your partnership interest. Generally,

immediately before the distribution or

•

6. Any information or statements you

this gain is treated as gain from the sale

The adjusted basis of your partnership

of a capital asset and should be reported

need to comply with section 6111

interest reduced by any cash distributed

on the Schedule D for your return.

(regarding tax shelters) or section

in the same transaction.

However, the gain may be ordinary

6662(d)(2)(B)(ii) (regarding adequate

If you received the property in

income. For details, see Pub. 541.

disclosure of items that may cause an

liquidation of your interest, your basis in

understatement of income tax on your

the distributed property is equal to the

The partnership will separately identify

return).

adjusted basis of your partnership interest

both of the following:

•

7. Preproductive period farm

reduced by any cash distributed in the

The FMV of the marketable securities

expenses. You may be eligible to elect to

same transaction.

when distributed (minus your share of the

deduct these expenses currently or

gain on the securities distributed to you).

If you contributed appreciated property

•

capitalize them under section 263A. See

The partnership’s adjusted basis of

to the partnership within 5 years of a

Pub. 225, Farmer’s Tax Guide, and

those securities immediately before the

distribution of other property to you, and

Regulations section 1.263A-4.

distribution.

the FMV of the other property exceeded

Decrease the adjusted basis of your

8. Any information you need to figure

the adjusted basis of your partnership

interest in the partnership (but not below

the interest due under section 453(l)(3)

interest immediately before the

zero) by the amount of cash distributed to

with respect to the disposition of certain

distribution (reduced by any cash

you and the partnership’s adjusted basis

timeshares and residential lots on the

received in the distribution), you may

of the distributed securities. Advances or

installment method. If you are an

have to recognize gain on the appreciated

drawings of money or property against

individual, report the interest on Form

property. For property contributed after

your distributive share are treated as

1040, line 58. Write “453(l)(3)” and the

June 8, 1997, the 5-year period is

current distributions made on the last day

amount of the interest on the dotted line

generally extended to 7 years. See

of the partnership’s tax year.

to the left of line 58.

section 737 for details.

9. Any information you need to figure

Your basis in the distributed

Lines 24a and 24b—Recapture

the interest due under section 453A(c)

marketable securities (other than in

of Low-Income Housing Credit

with respect to certain installment sales. If

liquidation of your interest) is the smaller

you are an individual, report the interest

A section 42(j)(5) partnership will report

of:

•

recapture of a low-income housing credit

on Form 1040, line 58. Write “453A(c)”

The partnership’s adjusted basis in the

on line 24a. All other partnerships will

and the amount of the interest on the

securities immediately before the

report recapture of a low-income housing

dotted line to the left of line 58.

distribution increased by any gain

credit on line 24b. Keep a separate record

recognized on the distribution of the

10. Any information you need to figure

of recapture from each of these sources

securities or

the interest due or to be refunded under

•

so that you will be able to correctly

The adjusted basis of your partnership

the look-back method of section 460(b)(2)

compute any recapture of low-income

interest reduced by any cash distributed

on certain long-term contracts. Use Form

housing credit that may result from the

in the same transaction and increased by

8697, Interest Computation Under the

disposition of all or part of your

any gain recognized on the distribution of

Look-Back Method for Completed

partnership interest. For more

the securities.

Long-Term Contracts, to report any such

information, see Form 8611, Recapture

If you received the securities in

interest.

of Low-Income Housing Credit.

liquidation of your partnership interest,

11. Any information you need relating

your basis in the marketable securities is

to interest expense that you are required

Supplemental Information

equal to the adjusted basis of your

to capitalize under section 263A for

partnership interest reduced by any cash

production expenditures. See Regulations

Line 25

distributed in the same transaction and

sections 1.263A-8 through 1.263A-15 for

increased by any gain recognized on the

Amounts shown on line 25 include:

more information.

distribution of the securities.

12. Any information you need to figure

1. Taxes paid on undistributed capital

unrelated business taxable income under

If, within 5 years of a distribution to you

gains by a regulated investment company

section 512(a)(1) (but excluding any

of marketable securities, you contributed

or real estate investment trust. Form 1040

modifications required by paragraphs (8)

appreciated property (other than those

filers enter your share of these taxes on

through (15) of section 512(b)) for a

securities) to the partnership and the FMV

line 65, check the box for Form 2439, and

partner that is a tax-exempt organization.

of those securities exceeded the adjusted

add the words “Form 1065.”

-10-

Partner’s Instructions for Schedule K-1

Partner'S Instructions For Schedule K-1 (Form 1065) - Partner'S Share Of Income, Credits, Deductions, Etc. (For Partner'S Use Only) - 2001 Page 10

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