Partner'S Instructions For Schedule K-1 (Form 1065-B) - Partner'S Share Of Income (Loss) From An Electing Large Partnership (For Partner'S Use Only) - 2009 Page 4
ADVERTISEMENT
1
2
3
4
5
6
7
8
9
10
11
12Corporations should refer to the
avoid the passive loss or credit
Estates (other than qualifying estates),
Instructions for Form 8810 for the material
limitations.
trusts (other than qualifying revocable
participation standards that apply to them.
2. You do the work in your capacity as
trusts that made a section 645 election),
an investor and you are not directly
and corporations cannot actively
Individuals (other than limited
involved in the day-to-day operations of
participate.
partners). If you are an individual (either
the activity. Examples of work done as an
You are not considered to actively
a general partner or a limited partner who
investor that would not count toward
participate in a rental real estate activity if
owned a general partnership interest at all
material participation include:
at any time during the tax year your
times during the tax year), you materially
a. Studying and reviewing financial
interest (including your spouse’s interest)
participated in an activity only if one or
statements or reports on operations of the
in the activity was less than 10% (by
more of the following apply.
activity.
value) of all interests in the activity.
1. You participated in the activity for
b. Preparing or compiling summaries
more than 500 hours during the tax year.
Active participation is a less stringent
or analyses of the finances or operations
2. Your participation in the activity for
requirement than material participation.
of the activity for your own use.
the tax year constituted substantially all
You may be treated as actively
c. Monitoring the finances or
the participation in the activity of all
participating if you participated, for
operations of the activity in a
individuals (including individuals who are
example, in making management
nonmanagerial capacity.
not owners of interests in the activity for
decisions or arranging for others to
the tax year).
provide services (such as repairs) in a
Effect of determination. Income
significant and bona fide sense.
(loss), deductions, and credits from an
3. You participated in the activity for
Management decisions that can count as
activity are nonpassive if you determine
more than 100 hours during the tax year,
active participation include approving new
that:
and your participation in the activity for
•
tenants, deciding rental terms, approving
You materially participated in a trade or
the tax year was not less than the
capital or repair expenditures, and other
business activity of the partnership or
participation in the activity of any other
•
similar decisions.
You were a real estate professional in a
individual (including individuals who were
rental real estate activity of the
not owners of interests in the activity) for
An estate is a qualifying estate if the
partnership.
the tax year.
decedent would have satisfied the active
4. The activity was a significant
If you determine that you did not
participation requirement for the activity
participation activity for the tax year, and
materially participate in a trade or
for the tax year the decedent died. A
you participated in all significant
business activity of the partnership or if
qualifying estate is treated as actively
participation activities (including activities
you have income (loss), deductions, or
participating for tax years ending less
outside the partnership) during the year
credits from a rental activity of the
than 2 years after the date of the
for more than 500 hours. A significant
partnership (other than a rental real
decedent’s death.
participation activity is any trade or
estate activity in which you materially
Modified adjusted gross income
business activity in which you participated
participated as a real estate professional),
limitation. The maximum special
for more than 100 hours during the tax
the amounts from that activity are
allowance that single individuals and
year and in which you did not materially
passive. Report passive income (losses),
married individuals filing a joint return can
participate under any of the material
deductions, and credits as follows.
qualify for is $25,000. The maximum is
participation tests (other than this test 4).
1. If you have an overall gain (the
$12,500 for married individuals who file
5. You materially participated in the
excess of income over deductions and
separate returns and who lived apart all
activity for any 5 tax years (whether or not
losses, including any prior year unallowed
times during the year. The maximum
consecutive) during the 10 tax years that
loss) from a passive activity, report the
special allowance for which an estate can
immediately precede the tax year.
income, deductions, and losses from the
qualify is $25,000 reduced by the special
6. The activity was a personal service
activity as indicated in the instructions for
allowance for which the surviving spouse
activity and you materially participated in
the boxes in which those items were
qualifies.
the activity for any 3 tax years (whether or
reported.
not consecutive) preceding the tax year.
If your modified adjusted gross income
2. If you have an overall loss (the
A personal service activity involves the
(defined below) is $100,000 or less
excess of deductions and losses,
performance of personal services in the
($50,000 or less if married filing
including any prior year unallowed loss,
fields of health, law, engineering,
separately), your loss is deductible up to
over income) or credits from a passive
architecture, accounting, actuarial
the amount of the maximum special
activity, report the income, deductions,
science, performing arts, consulting, or
allowance referred to in the preceding
losses, and credits from all passive
any other trade or business in which
paragraph. If your modified adjusted
activities using the Instructions for Form
capital is not a material income-producing
gross income is more than $100,000
8582 or Form 8582-CR (or Form 8810), to
factor.
(more than $50,000 if married filing
see if your deductions, losses, and credits
separately), the special allowance is
7. Based on all the facts and
are limited under the passive activity
limited to 50% of the difference between
circumstances, you participated in the
rules.
$150,000 ($75,000 if married filing
activity on a regular, continuous, and
separately) and your modified adjusted
Special allowance for rental real estate
substantial basis during the tax year.
gross income. When modified adjusted
activities. If you actively participated in
gross income is $150,000 or more
a rental real estate activity, you may be
Work counted toward material
($75,000 or more if married filing
able to deduct up to $25,000 of the loss
participation. Generally, any work that
separately), there is no special allowance.
from the activity from nonpassive income.
you or your spouse do in connection with
This “special allowance” is an exception
an activity held through a partnership
Modified adjusted gross income is your
to the general rule disallowing losses in
(where you own your partnership interest
adjusted gross income figured without
excess of income from passive activities.
at the time the work is done) is counted
taking into account the following.
The special allowance is not available if
•
toward material participation. However,
Any passive activity loss.
you were married, filed a separate return
•
work in connection with the activity is not
Any rental real estate loss allowed
for the year, and did not live apart from
counted toward material participation if
under section 469(c)(7) to real estate
your spouse at all times during the year.
either of the following applies.
professionals (as defined previously).
•
1. The work is not the sort of work that
Only individuals, qualifying estates,
Any overall loss from a publicly traded
owners of the activity would usually do
and qualifying revocable trusts that made
partnership.
•
and one of the principal purposes of the
a section 645 election can actively
Any taxable social security or
work that you or your spouse does is to
participate in a rental real estate activity.
equivalent railroad retirement benefits.
-4-
Instructions for Schedule K-1 (1065-B) (2009)
ADVERTISEMENT
0 votes
Related Articles
Related forms
Partner's Instructions For Schedule K-1 (form 1065-b) - Partner's Share Of Income (loss) From An Electing Large Partnership (for Partner's Use Only) - 2016
Financial
Partner's Instructions For Schedule K-1 (form 1065-b) - Partner's Share Of Income (loss) From An Electing Large Partnership (for Partner's Use Only) - 2001
Financial
Partner's Instructions For Schedule K-1 (form 1065-b) - Partner's Share Of Income (loss) From An Electing Large Partnership (for Partner's Use Only) - 2007
Financial
Partner's Instructions For Schedule K-1 (form 1065-b) - Partner's Share Of Income (loss) From An Electing Large Partnership (for Partner's Use Only) - 2011
Financial
Partner's Instructions For Schedule K-1 (form 1065-b) - Partner's Share Of Income (loss) From An Electing Large Partnership (for Partner's Use Only) - 2004
Financial
Partner's Instructions For Schedule K-1 (form 1065-b) - Partner's Share Of Income (loss) From An Electing Large Partnership (for Partner's Use Only) - 2003
Financial
Partner's Instructions For Schedule K-1 (form 1065-b) Draft - Partner's Share Of Income (loss) From An Electing Large Partnership (for Partner's Use Only) - 2011
Financial
Partner's Instructions For Schedule K-1 (form 1065-b) - Partner's Share Of Income (loss) From An Electing Large Partnership (for Partner's Use Only) - 2002
Financial
Related Categories
Parent category: Financial