Shareholder'S Instructions For Schedule K-1 (Form 1120s)

Code P. Domestic production

be entered as taxable income on line

If part or all of the low-income

activities information. The

43 (Form 1040). In the margin to the

housing credit reported using code A

corporation will provide you with a

left of line 43, enter ‘‘CCF’’ and the

or B is attributable to additions to

statement with information that you

amount of the deduction.

qualified basis property placed in

•

must use to figure the domestic

Penalty on early withdrawal of

service before 1990, the corporation

production activities deduction. Use

savings. Report this amount on Form

will provide an attached statement

Form 8903, Domestic Production

1040, line 30.

that will separately identify these

•

Activities Deduction, to figure this

Film and television production

amounts. Amounts placed in service

deduction. For details, see the

expenses. The corporation will

before 1990 are subject to different

Instructions for Form 8903.

provide a statement that describes

passive activity limitation rules. For

the film or television production

details, see Passive Activity

Code Q. Qualified production

generating these expenses.

Limitations on page 3 and Form

activities income (QPAI). Report

Generally, if the aggregate cost of the

8582-CR.

the QPAI reported to you by the

production exceeds $15 million, you

Codes C and D. Qualified

corporation (in box 12 of Schedule

are not entitled to the deduction. The

rehabilitation expenditures. The

K-1) on line 7 of Form 8903.

limitation is $20 million for

corporation will report your share of

Code R. Employer’s W-2 wages.

productions in certain areas (see

the qualified rehabilitation

Report the portion of W-2 wages

section 181 for details). If you did not

expenditures related to rental real

reported to you by the corporation (in

materially participate in the activity,

estate activities using code C. Your

box 12 of Schedule K-1) on line 13 of

use Form 8582 to determine the

share of qualified rehabilitation

Form 8903.

amount that can be reported on

expenditures from property not

Code S. Other deductions.

Schedule E (Form 1040), line 28,

related to rental real estate activities

Amounts with this code may include:

column (f). If you materially

will be reported using code D. On an

•

Itemized deductions that Form

participated in the production activity,

attached statement the corporation

1040 filers enter on Schedule A

report the deduction on Schedule E

will indicate the line number on Form

(Form 1040).

(Form 1040), line 28, column (h).

3468, Investment Credit, to report

•

Soil and water conservation

these expenditures (line 1b for

The corporation will give you a

expenditures. See section 175 for

pre-1936 buildings or line 1c for

description and the amount of your

limitations on the amount you are

certified historic structures). If the

share for each of these items.

allowed to deduct.

corporation is reporting expenditures

•

Expenditures for the removal of

Box 13. Credits & Credit

from more than one activity, the

architectural and transportation

attached statement will separately

Recapture

barriers to the elderly and disabled

identify the amount of expenditures

that the corporation elected to treat

If you have credits that are passive

from each activity for lines 1b and 1c.

as a current expense. The deductions

activity credits to you, you must

The expenditures related to rental

are limited by section 190(c) to

complete Form 8582-CR in addition

real estate activities (code C) are

$15,000 per year from all sources.

to the credit forms identified below.

•

reported on Schedule K-1 separately

Interest expense allocated to

See Passive Activity Limitations on

from other qualified rehabilitation

debt-financed distributions. The

page 3 and the Instructions for Form

expenditures (code D) because they

manner in which you report such

8582-CR for details.

are subject to different passive

interest expense depends on your

You may also have to file Form

activity limitation rules. Combine the

use of the distributed debt proceeds.

3800, General Business Credit, in

code C and code D expenditures on

If the proceeds were used in a trade

addition to the credit forms identified

lines 1b and 1c of Form 3468. See

or business activity, report the

below. If you have more than one

the Instructions for Form 8582-CR for

interest on line 28 of Schedule E

such credit, see the instructions for

details.

(Form 1040). In column (a) enter the

Form 3800.

Code E. Basis of energy property.

name of the corporation and “interest

Codes A and B. Low-income

If box 13 shows a dollar amount with

expense.” If you materially

housing credit. The corporation will

code E, the amount is for property

participated in the trade or business

report your share of the low-income

placed in service during 2005. Report

activity, enter the amount of interest

housing credit using code A if section

this amount on line 2 of Form 3468. If

expense in column (h). If you did not

42(j)(5) applies. If section 42(j)(5)

the corporation provides an attached

materially participate in the activity,

does not apply, your share of the

statement for code E, report the

follow the instructions for Form 8582

credit will be reported using code B.

amount identified for property placed

to determine the amount of interest

Any allowable low-income housing

in service during 2005 on line 2 and

expense you can report in column (f).

credit (reported as code A or code B)

the information for property placed in

See page 4 for a definition of material

is entered on line 4 of Form 8586,

service during 2006 on lines 3a

participation. If the proceeds were

Low-Income Housing Credit.

through 3g.

used in an investment activity, enter

the interest on Form 4952. If the

Keep a separate record of the

Code F. Other rental real estate

proceeds are used for personal

amount of low-income housing credit

credits. The corporation will identify

purposes the interest is generally not

from each of these sources so that

the type of credit and any other

deductible.

you can correctly figure any recapture

information you need to figure these

•

Contributions to a capital

of low-income housing credit that may

credits from rental real estate

construction fund (CCF). The

result from the disposition of all or

activities (other than the low-income

deduction for a CCF investment is not

part of your stock in the corporation.

housing credit and qualified

taken on Schedule E (Form 1040).

For more information, see the

rehabilitation expenditures). These

Instead, you subtract the deduction

instructions for Form 8611, Recapture

credits may be limited by the passive

from the amount that would normally

of Low-Income Housing Credit.

activity limitations. If the credits are

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Instructions for Schedule K-1 (Form 1120S)

Shareholder'S Instructions For Schedule K-1 (Form 1120s) - 2005 Page 10

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