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Line 10—Deductions Related to

Interest paid or accrued on debt

these sources so that you will be able to

properly allocable to your share of a

correctly compute any recapture of

Portfolio Income

working interest in any oil or gas property

low-income housing credit that may result

Amounts entered on this line are

(if your liability is not limited). If you did

from the disposition of all or part of your

deductions that are clearly and directly

not materially participate in the oil or gas

partnership interest. For more

allocable to portfolio income (other than

activity, this interest is investment interest

information, see the Instructions for Form

investment interest expense and section

reportable as described below; otherwise,

8586.

212 expenses from a REMIC). Generally,

it is trade or business interest.

you should enter line 10 amounts on

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Line 12b—Qualified

Contributions to a capital construction

Schedule A (Form 1040), line 22. See the

Rehabilitation Expenditures

fund (CCF). The deduction for a CCF

Instructions for Schedule A, lines 22 and

Related to Rental Real Estate

investment is not taken on Schedule E

27, for more information. However, enter

(Form 1040). Instead, you subtract the

Activities

deductions allocable to royalties on

deduction from the amount that would

The partnership should identify your

Schedule E (Form 1040), line 18. For the

normally be entered as taxable income on

share of the partnership’s rehabilitation

type of expense, write “From Schedule

line 39 (Form 1040). In the margin to the

expenditures from each rental real estate

K-1 (Form 1065).”

left of line 39, write ‘‘CCF’’ and the

activity. Enter the expenditures on the

amount of the deduction.

These deductions are not taken into

appropriate line of Form 3468,

The partnership should give you a

account in figuring your passive activity

Investment Credit, to figure your

description and the amount of your share

loss for the year. Do not enter them on

allowable credit.

for each of these items.

Form 8582.

Line 12c—Credits (Other Than

Credits

Line 11—Other Deductions

Credits Shown on Lines 12a

and 12b) Related to Rental Real

Amounts on this line are deductions not

If you have credits that are passive

Estate Activities

included on lines 8, 9, 10, 17g, and 18b,

activity credits to you, you must complete

such as:

Form 8582-CR (or Form 8810 for

The partnership will identify the type of

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Itemized deductions (Form 1040 filers

corporations) in addition to the credit

credit and any other information you need

enter on Schedule A (Form 1040)).

forms identified below. See the

to compute credits from rental real estate

Instructions for Form 8582-CR (or Form

activities (other than the low-income

Note: If there was a gain (loss) from a

8810) for more information.

housing credit and qualified rehabilitation

casualty or theft to property not used in a

expenditures).

Also, if you are entitled to claim more

trade or business or for income-producing

than one listed general business credit

purposes, the partnership will notify you.

Line 12d—Credits Related to

(investment credit, work opportunity

You will have to complete your own Form

Other Rental Activities

credit, welfare-to-work credit, credit for

4684.

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alcohol used as fuel, research credit,

The partnership will identify the type of

Any penalty on early withdrawal of

low-income housing credit, enhanced oil

credit and any other information you need

savings.

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recovery credit, disabled access credit,

to compute credits from rental activities

Soil and water conservation

renewable electricity production credit,

other than rental real estate activities.

expenditures. See section 175 for

Indian employment credit, credit for

limitations on the amount you are allowed

Line 13—Other Credits

employer social security and Medicare

to deduct.

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The partnership will identify the type of

taxes paid on certain employee tips,

Expenditures for the removal of

credit and any other information you need

orphan drug credit, and credit for

architectural and transportation barriers to

to compute credits other than on lines 12a

contributions to selected community

the elderly and disabled that the

through 12d. Expenditures qualifying for

development corporations), you must

partnership elected to treat as a current

the (a) rehabilitation credit from other than

complete Form 3800, General Business

expense. The deductions are limited by

rental real estate activities, (b) energy

Credit, in addition to the credit forms

section 190(c) to $15,000 per year from

credit, or (c) reforestation credit will be

identified below. If you have more than

all sources.

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reported to you on line 25.

one credit, see the Instructions for Form

Any amounts paid during the tax year

3800.

for insurance that constitutes medical

Credits that may be reported on line

care for you, your spouse, and your

12c, 12d, or 13 (depending on the type of

Line 12a—Low-Income

dependents. On line 28 of Form 1040,

activity they relate to) include the

Housing Credit

you may be allowed to deduct up to 60%

following:

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Your share of the partnership’s

of such amounts, even if you do not

Credit for backup withholding on

low-income housing credit is shown on

itemize deductions. If you do itemize

dividends, interest income, and other

line 12a. Any allowable credit is entered

deductions, enter on line 1 of Schedule A

types of income. Include the amount the

on Form 8586, Low-Income Housing

(Form 1040) any amounts not deducted

partnership reports to you in the total that

Credit.

on line 28 of Form 1040.

you enter on Form 1040, line 59.

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Payments made on your behalf to an

Nonconventional source fuel credit.

The partnership will report separately

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IRA, qualified plan, simplified employee

Qualified electric vehicle credit (Form

on line 12a(1) that portion of the

pension (SEP), or a SIMPLE IRA plan.

8834).

low-income housing credit to which

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See Form 1040 instructions for line 23 to

Unused credits from cooperatives.

section 42(j)(5) applies. All other

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figure your IRA deduction. Enter

Work opportunity credit (Form 5884).

low-income housing credits will be

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payments made to a qualified plan, SEP,

Welfare-to-work credit (Form 8861).

reported on line 12a(2).

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or SIMPLE IRA plan on Form 1040, line

Credit for alcohol used as fuel (Form

If part or all of the credit reported on

29. If the payments to a qualified plan

6478).

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line 12a(1) or 12a(2) is attributable to

were to a defined benefit plan, the

Credit for increasing research activities

additions to qualified basis of property

partnership should give you a statement

(Form 6765).

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placed in service before 1990, the

showing the amount of the benefit

Enhanced oil recovery credit (Form

partnership will attach a statement to tell

accrued for the current tax year.

8830).

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you the amount of the credit on each line

Interest expense allocated to

Disabled access credit (Form 8826).

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that is attributable to property placed in

debt-financed distributions. The manner

Renewable electricity production credit

service (a) before 1990 and (b) after

in which you report such interest expense

(Form 8835).

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1989.

depends on your use of the distributed

Empowerment zone employment credit

debt proceeds. See Notice 89-35, 1989-1

Keep a separate record of the amount

(Form 8844).

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C.B. 675, for details.

of low-income housing credit from each of

Indian employment credit (Form 8845).

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Partner’s Instructions for Schedule K-1 (Form 1065)

Partner'S Instructions For Schedule K-1 (Form 1065) - Partner'S Share Of Income, Credits, Deductions, Etc. (For Partner'S Use Only) - 2001 Page 8

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