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
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122011
Department of the Treasury
Internal Revenue Service
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)
income are made by the electing large
section 751(a) exchange must notify the
Section references are to the Internal
partnership.
partnership, in writing, within 30 days of
Revenue Code unless otherwise noted.
the exchange (or, if earlier, by January 15
For limited partners, income and other
What’s New
of the calendar year following the
items from the partnership’s trade or
•
calendar year in which the exchange
The IRS has created a page on
business and rental activities are treated
occurred). A “section 751(a) exchange” is
IRS.gov for information about Schedule
as being from a trade or business that is a
any sale or exchange of a partnership
K-1 (Form 1065-B) and its instructions at
single passive activity. These items are
interest in which any money or other
Information
reported in boxes 1, 4a, and 5, with most
property received by the partner in
about any future developments (such as
credits being reported in boxes 7 and 8.
exchange for that partner’s interest is
legislation enacted after we release it)
General partners must make their own
attributable to unrealized receivables (as
affecting Schedule K-1 (Form 1065-B)
determinations as to whether the activities
defined in section 751(c)) or inventory
and its instructions will be posted on that
are passive for them. Therefore,
items (as defined in section 751(d)).
page.
partnership items from trade or business,
•
Under the instructions for Box 9, Code
The written notice to the partnership
rental real estate, and other rental
M1, we have added a Note for income
must include the names and addresses of
activities are separately reported for each
exempt under section 892.
both parties to the exchange, the
activity in box 9.
identifying numbers of the transferor and
General Instructions
Income, etc., from other activities
(if known) of the transferee, and the
(investment and portfolio income and
exchange date.
deductions) are reported in boxes 2, 3,
An exception to this rule is made for
Purpose of Schedule K-1
4b, and 6 for both limited and general
sales or exchanges of publicly traded
partners.
The partnership uses Schedule K-1 to
partnership interests for which a broker is
report your share of the partnership’s
Errors
required to file Form 1099-B, Proceeds
income, deductions, credits, etc. Keep it
From Broker and Barter Exchange
You must report partnership items shown
for your records. Do not file it with your
Transactions.
on your Schedule K-1 (and any attached
tax return. The partnership has filed a
If a partner is required to notify the
statements) the same way that the
copy with the IRS.
partnership of a section 751(a) exchange
partnership treated the items on its return.
but fails to do so, the penalty is $100 for
You are liable for tax on your share of
If you believe the partnership has made
each such failure. However, no penalty
the partnership income, whether or not
an error on your Schedule K-1, notify the
will be imposed if the partner can show
distributed. Include your share on your tax
partnership. Do not change any items on
that the failure was due to reasonable
return if a return is required. Use these
your copy of Schedule K-1. Generally, an
cause and not willful neglect.
instructions to help you report the items
adjustment to correct an error will take
shown on Schedule K-1 on your tax
effect for the tax year in which the
Nominee Reporting
return.
partnership actually makes the
Any person who holds, directly or
adjustment. However, if the error involves
The amount of loss and deduction that
indirectly, an interest in a partnership as a
a change to your distributive share of a
you can claim on your tax return may be
nominee for another person must furnish
partnership item, the partnership should
less than the amount reported on
a written statement to the partnership by
file an amended partnership return and
Schedule K-1. It is the partner’s
the last day of the month following the
send you a corrected Schedule K-1.
responsibility to consider and apply any
end of the partnership’s tax year. This
If the treatment on your original or
applicable limitations. See Limitations on
statement must include the name,
amended return is inconsistent with the
Losses, Deductions, and Credits (later)
address, and identifying number of the
partnership’s treatment, you may be
for more information.
nominee and such other person,
subject to the accuracy-related penalty.
Electing Large
description of the partnership interest held
This penalty is in addition to any tax that
as nominee for that person, and other
results from making your amount or
Partnerships (ELPs)
information required by Temporary
treatment of the item consistent with that
Regulations section 1.6031(c)-1T. A
This partnership has elected simplified
shown on the partnership’s return. Any
nominee who fails to furnish this
reporting requirements intended to make
deficiency that results from making the
statement must furnish to the person for
it simpler for you to report your share of
amounts consistent may be assessed
whom the nominee holds the partnership
partnership income, credits, deductions,
immediately.
interest a copy of Schedule K-1 and
etc. Generally, income, capital gains,
related information within 30 days of
Sale or Exchange of
credits, and deductions are combined at
receiving it from the partnership.
the partnership level so that the number
Partnership Interest
of partnership items separately reported
A nominee who fails to furnish when
to partners is reduced. Most limitations
Generally, a partner who sells or
due all the information required by
and elections affecting partnership
exchanges a partnership interest in a
Temporary Regulations section
Feb 07, 2012
Cat. No. 26141W
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