2011 Shareholder'S Instructions For Schedule K-1 (Form 1120s) (Page 6 of 14) in pdf

However, except for passive activity

b. If a loss is reported in box 1,

income on Schedule E (Form 1040),

losses and credits, do not combine

follow the Instructions for Form 8582

line 28, column (g).

the prior-year amounts with any

to figure how much of the loss can be

amounts shown on this Schedule K-1

reported on Schedule E (Form 1040),

Box 3. Other Net Rental

to get a net figure to report on your

line 28, column (f).

Income (Loss)

return. Instead, report the amounts on

The amount in box 3 is a passive

your return on a year-by-year basis.

Box 2. Net Rental Real Estate

activity amount for all shareholders. If

Income (Loss)

If you have amounts other

the corporation had more than one

than those shown on

rental activity, it will attach a

Generally, the income (loss) reported

Schedule K-1 to report on

statement identifying the income or

in box 2 is a passive activity amount

CAUTION

Schedule E (Form 1040), enter each

loss from each activity. Report the

for all shareholders. However, the

item separately on line 28 of

income or loss as follows.

income (loss) in box 2 is not from a

Schedule E (Form 1040).

passive activity if you were a real

1. If box 3 is a loss, follow the

estate professional (defined earlier)

Instructions for Form 8582 to figure

Codes. In box 10 and boxes 12

and you materially participated in the

how much of the loss can be reported

through 17, the corporation will

activity. If the corporation had more

on Schedule E (Form 1040), line 28,

identify each item by entering a code

than one rental real estate activity, it

column (f).

in the column to the left of the dollar

will attach a statement identifying the

2. If income is reported in box 3,

amount entry space. These codes are

income or loss from each activity.

report the income on Schedule E

identified on page 2 of Schedule K-1

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

and in these instructions.

If you are filing a 2011 Form 1040,

use the following instructions to

Attached statements. The

Portfolio Income

determine where to report a box 2

corporation will enter an asterisk (*)

amount.

Portfolio income or loss (shown in

after the code, if any, in the column to

1. If you have a loss from a

boxes 4 through 8b and in box 10,

the left of the dollar amount entry

passive activity in box 2 and you

code A) is not subject to the passive

space for each item for which it has

activity limitations. Portfolio income

meet all the following conditions,

attached a statement providing

includes income (not derived in the

report the loss on Schedule E (Form

additional information. For those

ordinary course of a trade or

1040), line 28, column (f).

informational items that cannot be

business) from interest, ordinary

a. You actively participated in the

reported as a single dollar amount,

dividends, annuities, or royalties, and

corporate rental real estate activities.

the corporation will enter an asterisk

gain or loss on the sale of property

See Special allowance for a rental

in the left column and enter “STMT” in

that produces such income or is held

real estate activity under Passive

the dollar amount entry space to

for investment.

Activity Limitations, earlier.

indicate the information is provided

b. Rental real estate activities with

on an attached statement.

Box 4. Interest Income

active participation were your only

passive activities.

Report interest income on line 8a of

Income (Loss)

c. You have no prior year

Form 1040.

unallowed losses from these

Box 1. Ordinary Business

Box 5a. Ordinary Dividends

activities.

Income (Loss)

d. Your total loss from the rental

Report ordinary dividends on line 9a

The amount reported in box 1 is your

real estate activities was not more

of Form 1040.

share of the ordinary income (loss)

than $25,000 (not more than $12,500

from trade or business activities of

if married filing separately and you

Box 5b. Qualified Dividends

the corporation. Generally, where you

lived apart from your spouse all year).

Report any qualified dividends on line

report this amount on Form 1040

e. If you are a married person

9b of Form 1040.

depends on whether the amount is

filing separately, you lived apart from

Note. Qualified dividends are

from an activity that is a passive

your spouse all year.

excluded from investment income,

activity to you. If you are an individual

f. You have no current or prior

but you may elect to include part or

shareholder filing a 2011 Form 1040,

year unallowed credits from a passive

all of these amounts in investment

find your situation below and report

activity.

income. See the instructions for line

your box 1 income (loss) as

g. Your modified adjusted gross

4g of Form 4952, Investment Interest

instructed after applying the basis

income was not more than $100,000

Expense Deduction, for important

and at-risk limitations on losses. If the

(not more than $50,000 if married

information on making this election.

corporation had more than one trade

filing separately and you lived apart

or business activity, it will attach a

from your spouse all year).

If you have any foreign

statement identifying the income or

2. If you have a loss from a

source qualified dividends,

loss from each activity.

passive activity in box 2 and you do

see the instructions for line

CAUTION

1. Report box 1 income (loss)

not meet all the conditions in 1 above,

14.

from corporate trade or business

follow the Instructions for Form 8582

activities in which you materially

to figure how much of the loss you

Box 6. Royalties

participated on Schedule E (Form

can report on Schedule E (Form

Report royalties on Schedule E (Form

1040), line 28, column (h) or (j).

1040), line 28, column (f).

1040), line 3b.

2. Report box 1 income (loss)

3. If you were a real estate

from corporate trade or business

professional and you materially

Box 7. Net Short-Term

activities in which you did not

participated in the activity, report box

Capital Gain (Loss)

materially participate, as follows.

2 income (loss) on Schedule E (Form

1040), line 28, column (h) or (j).

a. If income is reported in box 1,

Report the net short-term capital gain

4. If you have income from a

report the income on Schedule E

(loss) on Schedule D (Form 1040),

passive activity in box 2, report the

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

line 5.

-6-

Instructions for Schedule K-1 (Form 1120S)

2011 Shareholder'S Instructions For Schedule K-1 (Form 1120s) Page 6

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