2011 Shareholder'S Instructions For Schedule K-1 (Form 1120s) (Page 5 of 14) in pdf

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actively participating if you

The exclusion of amounts received

Specific Instructions

participated, for example, in making

under an employer’s adoption

management decisions or arranging

assistance program.

for others to provide services (such

Part III. Shareholder’s

as repairs) in a significant and bona

Commercial revitalization

Share of Current Year

fide sense. Management decisions

deduction. The special $25,000

that can count as active participation

Income, Deductions,

allowance for the commercial

include approving new tenants,

revitalization deduction from rental

Credits, and Other Items

deciding rental terms, approving

real estate activities is not subject to

capital or repair expenditures, and

the active participation rules or

The amounts shown in boxes 1

other similar decisions.

modified adjusted gross income limits

through 17 reflect your share of

discussed above. See the instructions

Modified adjusted gross income

income, loss, deductions, credits,

for box 12, code N for more

etc., from corporate business or

limitation. The maximum special

information.

rental activities without reference to

allowance that single individuals and

limitations on losses, credits, or other

married individuals filing a joint return

items that may have to be adjusted

can qualify for is $25,000. The

Special rules for certain other

because of:

maximum is $12,500 for married

activities. If you have net income

individuals who file separate returns

(loss), deductions, or credits from any

1. The adjusted basis of your

and who lived apart at all times during

activity to which special rules apply,

stock and debt in the corporation,

the year. The maximum special

the corporation will identify the activity

2. The at-risk limitations,

allowance for which an estate can

3. The passive activity limitations,

and all amounts relating to it on

qualify is $25,000 reduced by the

Schedule K-1 or on an attached

special allowance for which the

4. Any other limitations that must

statement.

surviving spouse qualifies.

be taken into account at the

shareholder level in figuring taxable

If you have net income subject to

If your modified adjusted gross

income (for example, the section 179

recharacterization under Temporary

income (defined below) is $100,000

expense limitation).

Regulations section 1.469-2T(f) and

or less ($50,000 or less if married

Regulations section 1.469-2(f), report

filing separately), your loss is

For information on these

such amounts according to the

deductible up to the maximum special

provisions, see Limitations on

allowance referred to in the preceding

Instructions for Form 8582.

Losses, Deductions, and Credits,

paragraph. If your modified adjusted

earlier.

gross income is more than $100,000

If you have net income (loss),

If you are an individual, and the

(more than $50,000 if married filing

deductions, or credits from either of

above limitations do not apply to the

separately), the special allowance is

the following activities, treat such

amounts shown on your Schedule

limited to 50% of the difference

amounts as nonpassive and report

K-1, take the amounts shown and

between $150,000 ($75,000 if

them as indicated in these

report them on the lines of your tax

married filing separately) and your

instructions.

return as indicated in the summarized

modified adjusted gross income.

1. The rental of a dwelling unit any

reporting information shown on page

When modified adjusted gross

shareholder used for personal

2 of the Schedule K-1. If any of the

income is $150,000 or more ($75,000

purposes during the year for more

above limitations apply, adjust the

or more if married filing separately),

than the greater of 14 days or 10% of

amounts on Schedule K-1 before you

there is no special allowance.

the number of days that the residence

report them on your return.

Modified adjusted gross income is

was rented at fair rental value.

When applicable, the passive

your adjusted gross income figured

2. Trading personal property for

activity limitations on losses are

without taking into account the

the account of owners of interests in

applied after the limitations on losses

following amounts, if applicable.

the activity.

for a shareholder’s basis in stock and

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Any passive activity loss.

debt and the shareholder’s at-risk

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Any rental real estate loss allowed

amount.

Self-charged interest. The

under section 469(c)(7) to real estate

professionals (defined earlier).

corporation will report any

The line numbers in the

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“self-charged” interest income or

summarized reporting information on

Any overall loss from a

expense that resulted from loans

page 2 of Schedule K-1 are

publicly-traded partnership.

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between you and the corporation (or

references to forms in use for

Any taxable social security or

calendar year 2011. If you file your

equivalent railroad retirement

between the corporation and another

tax return on a calendar year basis,

benefits.

S corporation or partnership if both

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but the corporation files a return for a

entities have the same owners with

Any deductible contributions to an

fiscal year, report the amounts on

the same proportional interest in each

IRA or certain other qualified

your tax return for the year in which

entity). If there was more than one

retirement plans under section 219.

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the corporation’s fiscal year ends. For

activity, the corporation will provide a

The domestic production activities

example, if the corporation’s tax year

deduction.

statement allocating the interest

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ends in February 2012, report the

income or expense with respect to

The student loan interest

amounts on your 2012 tax return.

each activity. The self-charged

deduction.

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interest rules do not apply to your

The tuition and fees deduction.

If you have losses, deductions, or

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interest in the S corporation if the

The deductible part of

credits from a prior year that were not

corporation made an election under

self-employment taxes.

deductible or usable because of

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Regulations section 1.469-7(g) to

The exclusion from income of

certain limitations, such as the basis

avoid the application of these rules.

interest from Series EE or I U.S.

rules or the at-risk limitations, take

See the Instructions for Form 8582

Savings Bonds used to pay higher

them into account in determining your

for details.

education expenses.

income, loss, or credits for this year.

-5-

Instructions for Schedule K-1 (Form 1120S)

2011 Shareholder'S Instructions For Schedule K-1 (Form 1120s) Page 5

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