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amount from item 6 above the amount of

Code K. Section 1260(b) information. The

required by paragraphs (8) through (15) of

your distributive share of the section 179

partnership will report any information you

section 512(b)) for a partner that is a

expense deduction, reduced by any unused

need to figure the interest due under section

tax-exempt organization.

carryover of the deduction for this property.

1260(b). If the partnership had gain from

Note. A partner is required to notify the

This amount may be different than the

certain constructive ownership transactions,

partnership of its tax-exempt status.

amount of section 179 expense you

your tax liability must be increased by the

Code Q. Other information. The

deducted for the property if your interest in

interest charge on any deferral of gain

partnership will report:

the partnership has changed.

recognition under section 1260(b). Report

1. Any information a publicly traded

8. If the disposition is due to a casualty

the interest on Form 1040, line 63. Write

partnership needs to determine whether it

or theft, a statement providing the

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

meets the 90% qualifying income test of

information you need to complete Form

the dotted line to the left of line 63. See

section 7704(c)(2).

4684, Casualties and Thefts.

section 1260(b) for details, including how to

9. If the sale was an installment sale

figure the interest.

Note. A partner is required to notify the

made during the partnership’s tax year, any

partnership of its status as a publicly traded

Code L. Interest allocable to production

partnership.

information you need to complete Form

expenditures. The partnership will report

6252, Installment Sale Income. The

2. Any information or statements you

any information you need relating to interest

partnership also must separately report your

need to comply with the registration and

expense that you are required to capitalize

share of all payments received for the

disclosure requirements under sections

under section 263A for production

property in the following tax years. See the

6111 and 6662(d)(2)(B)(ii) and the list

expenditures. See Regulations sections

Instructions for Form 6252 for details.

keeping requirements of Regulations section

1.263A-8 through 1.263A-15 for more

301.6112-1. See Form 8264 and Notice

information.

Code G. Recapture of section 179

2004-80, 2004-50 I.R.B. 963, and Notice

Code M. CCF nonqualified withdrawals.

deduction. The partnership will report your

2005-22, 2005-12 I.R.B. 756 for more

The partnership will report your nonqualified

distributive share of any recapture of section

information.

withdrawals by the partnership from a

179 expense deduction if business use of

3. Any information you need to complete

capital construction fund (CCF). These

any property for which the section 179

a disclosure statement for reportable

withdrawals are taxed separately from your

expense deduction was passed through to

transactions in which the partnership

other gross income at the highest marginal

partners dropped to 50 percent or less. If

participates. If the partnership participates in

ordinary income or capital gains tax rate.

business use of the property dropped to 50

a transaction that must be disclosed on

Attach a statement to your federal income

percent or less, the partnership must

Form 8886, Reportable Transaction

tax return to show your computation of both

provide all the following information.

Disclosure Statement, both you and the

the tax and interest for a nonqualified

1. Your distributive share of the

partnership may be required to file Form

withdrawal. Include the tax and interest on

depreciation allowed or allowable (not

8886 for the transaction. The determination

Form 1040, line 63. To the left of line 63,

including the section 179 expense

of whether you are required to disclose a

write the amount of tax and interest

deduction).

transaction of the partnership is based on

and“CCF”

2. Your distributive share of the section

the category(s) under which the transaction

Code N. Information needed to figure

179 expense deduction (if any) passed

qualifies for disclosure and is determined by

depletion — oil and gas. This is your share

through for the property and the

the partnership. You may have to pay a

of gross income from the property, share of

partnership’s tax year(s) in which the

penalty if you are required to file Form 8886

production for the tax year, etc., needed to

amount was passed through. Reduce this

and fail to do so. See the instructions for

figure your depletion deduction for oil and

amount by the portion, if any, of your

Form 8886 for details.

gas wells. The partnership should also

unused (carryover) section 179 expense

4. Interest and additional tax on

allocate to you a share of the adjusted basis

deduction for this property.

compensation deferred under a section

of each partnership oil or gas property. See

409A nonqualified deferred compensation

Pub. 535 for how to figure your depletion

Code H. Special basis adjustment. If you

plan that does not meet the requirements of

deduction.

acquired an interest in an oil and gas

section 409A. See section 409A(a)(1)(B) to

partnership, you are required to attach a

Code O. Amortization of reforestation

figure the interest and additional tax on this

statement to your return for the year of the

costs. The partnership will provide a

income. Report this interest and tax on line

transfer that shows your computation of any

statement identifying your share of the

63 of Form 1040. This income is included in

section 743(b) basis adjustment and your

amortizable basis of reforestation

the amount in box 4, Guaranteed Payments.

allocation of the basis adjustment to specific

expenditures paid or incurred before

5. Inversion gain. The partnership will

properties. The partnership will provide the

October 23, 2004. The partnership will

provide a statement showing the amounts of

information you need to prepare this

separately report your share of the

each type of income or gain that is included

statement. See Regulations sections

amortizable basis for reforestation

in inversion gain. The partnership has

1.743(b)-1(k)(1)(ii) and (iii) for more

expenditures for the 7 preceding tax years.

included inversion gain in income elsewhere

information.

Your amortizable basis of reforestation

on Schedule K-1. Inversion gain is also

expenditures for each tax year from all

Code I. Section 453(l)(3) information. The

reported under code Q because your

properties is limited to $10,000 ($5,000 if

partnership will report any information you

taxable income and alternative minimum

need to figure the interest due under section

married filing separately), including your

taxable income cannot be less than the

453(l)(3) with respect to the disposition of

distributive share of the partnership’s

inversion gain. Also, your inversion gain (a)

expenditures and any qualified reforestation

certain timeshares and residential lots on

is not taken into account in figuring the

expenditures you separately paid or

the installment method. If you are an

amount of net operating loss (NOL) for the

incurred. To figure your allowable

individual, report the interest on Form 1040,

tax year or the amount of NOL that can be

line 63. Write “453(l)(3)” and the amount of

amortization, see section 194 and Pub. 535.

carried over to each tax year, (b) may limit

the interest on the dotted line to the left of

Follow the Instructions for Form 8582 to

the amount of your credits, and (c) is treated

line 63.

report a deduction allocable to a passive

as income from sources within the U.S. for

Code J. Section 453A(c) information. The

activity. If you materially participated in the

the foreign tax credit. See section 7874 for

partnership will report any information you

reforestation activity, report the deduction on

details.

need to figure the interest due under section

line 28, column (h), of Schedule E (Form

6. Any other information you may need

453A(c) with respect to certain installment

1040).

to file your return not shown elsewhere on

sales. If you are an individual, report the

Schedule K-1.

Code P. Unrelated business taxable

interest on Form 1040, line 63. Write

income. The partnership will report any

The partnership should give you a

“453A(c)” and the amount of the interest on

information you need to figure unrelated

description and the amount of your share for

the dotted line to the left of line 63. See the

business taxable income under section

each of these items.

instructions for Form 6252 for more

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

information. Also see section 453A(c) for

details on making the computation.

-13-

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

Partner'S Instructions For Schedule K-1 (Form 1065) - Partner'S Share Of Income, Deductions, Credits, Etc. (For Partner'S Use Only) - 2005 Page 13

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