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 Page 3
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11who is related, under section 465(b)(3), to
Form 8582. See page 5 for the special
separately reported to general partners
a person (other than you) having such an
rules for PTPs.
for each trade or business, rental real
interest.
estate, and other rental activity.
Corporations. Use Form 8810,
Corporate Passive Activity Loss and
You should get a separate statement
Except for the PTP discussion on
Credit Limitations. See the instructions for
of income, expenses, etc., for each
!
page 5, the following information
more information.
activity from the partnership.
on passive activity limitations
CAUTION
For limited partners of an ELP, all
applies only to general partners.
Passive Activity Limitations
income, loss, deductions, and credits
Generally, passive activities include:
Section 469 provides rules that limit the
from trade or business and rental
deduction of certain losses and credits.
1. Trade or business activities in
activities generally are reported as being
These rules apply to partners who:
which you did not materially participate
from a trade or business that is a single
•
Are individuals, estates, trusts, closely
and
passive activity.
held corporations (other than S
2. Activities that meet the definition of
However, the determination of
corporations), or personal service
rental activities under Temporary
whether an activity is a passive activity
corporations and
Regulations section 1.469-1T(e)(3) and
•
must be made by any partner who is
Have a passive activity loss or credit for
Regulations section 1.469-1(e)(3).
either a:
the tax year.
•
General partner or
Passive activities do not include the
•
Individuals, estates, and trusts. If you
Limited partner who is a disqualified
following.
have a passive activity loss or credit, use
person (as defined on page 2) with
1. Trade or business activities in
Form 8582, Passive Activity Loss
respect to items of income, gain, loss,
which you materially participated.
Limitations, to figure your allowable
deduction, and credit attributable to
2. Rental real estate activities in which
passive losses and Form 8582-CR,
partnership oil and gas properties.
you materially participated if you were a
Passive Activity Credit Limitations, to
In addition, the partnership is required
“real estate professional” for the tax year.
figure your allowable passive credits.
to provide each general partner and
You were a real estate professional only if
If the publicly traded partnership
disqualified person the information
you met both of the following conditions.
!
(PTP) box on Schedule K-1 is
necessary to comply with the passive
a. More than half of the personal
checked, do not report passive
activity rules of section 469. Items of
CAUTION
services you performed in trades or
income (loss) from the partnership on
income, gain, loss, credit, etc., must be
businesses were performed in real
property trades or businesses in which
Worksheet for Adjusting the Basis of a Partner’s
you materially participated and
Interest in the Partnership
b. You performed more than 750
Keep for Your Records
hours of services in real property trades
or businesses in which you materially
1. Your adjusted basis at the end of the prior year. Do not enter less
participated.
than zero. Enter -0- if this is your first tax year. . . . . . . . . . . . . . .
1.
Note. For a closely held C corporation
Increases:
(defined in section 465(a)(1)(B)), the
2. Money and your adjusted basis in property contributed to the
above conditions are treated as met if
partnership less the associated liabilities (but not less than zero).
2.
more than 50% of the corporation’s gross
receipts were from real property trades or
3. Your increased share of or assumption of partnership liabilities.
businesses in which the corporation
(Subtract your share of liabilities shown on your 2006 Schedule K-1
materially participated.
from your share of liabilities shown on your 2007 Schedule K-1 and
add the amount of any partnership liabilities you assumed during
For purposes of this rule, each interest
the tax year.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.
in rental real estate is a separate activity,
unless you elect to treat all interests in
4. Your share of the partnership’s income or gain (including
rental real estate as one activity. For
tax-exempt income) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.
details on making this election, see the
5. Any gain recognized this year on contributions of property. Do not
Instructions for Schedule E (Form 1040).
include gain from transfer of liabilities . . . . . . . . . . . . . . . . . . . .
5.
If you are married filing jointly, either
Decreases:
you or your spouse must separately meet
both of the above conditions, without
6. Withdrawals and distributions of money and the adjusted basis of
taking into account services performed by
property distributed to you from the partnership. Do not include the
the other spouse.
amount of property distributions included in the partner’s income
A real property trade or business is
(taxable income) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.
any real property development,
Caution. A distribution may be taxable if the amount exceeds your
redevelopment, construction,
adjusted basis of your partnership interest immediately before the
reconstruction, acquisition, conversion,
distribution.
rental, operation, management, leasing,
7. Your share of the partnership’s nondeductible expenses that are
or brokerage trade or business. Services
not capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.
you performed as an employee are not
treated as performed in a real property
8. Your share of the partnership’s losses and deductions (including
trade or business unless you owned more
capital losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.
than 5% of the stock (or more than 5% of
9. Your adjusted basis in the partnership at end of this tax year. (Add
the capital or profits interest) in the
lines 1 through 5 and subtract lines 6 through 8 from the total. If
employer.
zero or less, enter -0-.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.
3. Working interests in oil or gas
wells.
Caution. The deduction for your share of the partnership’s losses
4. The rental of a dwelling unit any
and deductions is limited to your adjusted basis in your partnership
partner used for personal purposes during
interest. If you entered zero on line 9 and the amount computed for
the year for more than the greater of 14
line 9 was less than zero, a portion of your share of the partnership
losses and deductions may not be deductible (see Basis Rules on
days or 10% of the number of days that
page 2 for more information.)
the residence was rented at fair rental
value.
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