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Reminder: A partner is required to notify

regulated investment company, report it

23. Extraterritorial income exclusion:

the partnership of its tax-exempt status.

on line 11 of that worksheet. Report on

a. Partnership did not claim the

line 10 of that worksheet any gain from

13. Your share of expenditures

exclusion. If the partnership reports your

the partnership’s sale or exchange of an

qualifying for the (a) rehabilitation credit

distributive share of foreign trading gross

interest in another partnership that is

from other than rental real estate

receipts and the extraterritorial income

attributable to unrecaptured section 1250

activities, (b) energy credit, or (c)

exclusion, the partnership was not entitled

gain.

reforestation credit. Enter the

to claim the exclusion because it did not

19. Any information you need to figure

expenditures on the appropriate line of

meet the foreign economic process

the interest due or to be refunded under

Form 3468 to figure your allowable credit.

requirements. You may qualify for your

the look-back method of section 167(g)(2)

14. Any information you need to figure

distributive share of this exclusion

for certain property placed in service after

your recapture tax on Form 4255,

because the partnership’s foreign trading

September 13, 1995, and depreciated

Recapture of Investment Credit. See the

gross receipts for the tax year were $5

under the income forecast method. Use

Form 3468 on which you took the original

million or less. To qualify for this

Form 8866, Interest Computation Under

credit for other information you need to

exclusion, your foreign trading gross

the Look-Back Method for Property

complete Form 4255.

receipts from all sources for the tax year

Depreciated Under the Income Forecast

also must have been $5 million or less.

You may also need Form 4255 if you

Method, to report any such interest.

See Form 8873, Extraterritorial Income

disposed of more than one-third of your

20. Any information a publicly traded

Exclusion, for more information. If you

interest in a partnership.

partnership needs to determine whether it

qualify for the exclusion, report the

15. Any information you need to figure

meets the 90% qualifying income test of

exclusion amount in accordance with the

your recapture of the qualified electric

section 7704(c)(2).

instructions on page 6 for line 1, 2, or 3,

vehicle credit. See Pub. 535 for details,

Reminder: A partner is required to notify

which ever applies.

including how to figure the recapture.

the partnership of its status as a publicly

b. Partnership claimed the exclusion.

16. Any information you need to figure

traded partnership.

If the partnership reports your distributive

your recapture of the Indian employment

share of foreign trading gross receipts but

credit. Generally, if the partnership

21. Amortizable basis of reforestation

not the amount of the extraterritorial

expenses and the year paid or incurred.

terminated a qualified employee less than

income exclusion, the partnership met the

1 year after the date of initial employment,

To figure your allowable amortization,

foreign economic process requirements

including limits that may apply, see

any Indian employment credit allowed for

and claimed the exclusion when figuring

section 194 and Pub. 535. Follow the

a prior tax year by reason of wages paid

your distributive share of partnership

or incurred to that employee must be

Instructions for Form 8582 to report

income. You also may need to know the

amortization allocable to a passive

recaptured. For details, see section

amount of your distributive share of

activity. However, if the box in Item H is

45A(d).

foreign trading gross receipts from this

checked, report the amortization following

17. Nonqualified withdrawals by the

partnership to determine if you met the $5

the rules for Publicly traded

partnership from a CCF. These

million or less exception discussed above

withdrawals are taxed separately from

partnerships on page 4. Report

for purposes of qualifying for an

amortization from a trade or business

your other gross income at the highest

extraterritorial income exclusion from

activity in which you materially

marginal ordinary income or capital gain

other sources.

tax rate. Attach a statement to your

participated on a separate line in Part II,

column (i), of Schedule E (Form 1040).

Federal income tax return to show your

Note: Upon request, the partnership

computation of both the tax and interest

22. Any information you need to figure

should furnish you a copy of the

the interest due under section 1260(b). If

for a nonqualified withdrawal. Include the

partnership’s Form 8873 if there is a

the partnership had gain from certain

tax and interest on Form 1040, line 58. To

reduction for international boycott

the left of line 58, write the amount of tax

constructive ownership transactions, your

operations, illegal bribes, kickbacks, etc.

tax liability must be increased by the

and interest and ‘‘CCF.’’

24. Any other information you may

interest charge on any deferral of gain

18. Unrecaptured section 1250 gain.

need to file your return not shown

recognition under section 1260(b). Report

Generally, report this amount on line 5 of

elsewhere on Schedule K-1.

the interest on Form 1040, line 57. Write

the Unrecaptured Section 1250 Gain

The partnership should give you a

Worksheet in the Schedule D (Form

“1260(b)” and the amount of the interest

description and the amount of your share

on the dotted line to the left of line 57.

1040) instructions. However, for an

for each of these items.

See section 1260(b) for details, including

amount passed through from an estate,

trust, real estate investment trust, or

how to figure the interest.

-11-

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 11

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