2011 Shareholder'S Instructions For Schedule K-1 (Form 1120s) (Page 7 of 14) in pdf

Code D. Mining exploration costs

Box 8a. Net Long-Term

Schedule K-1 (Form 1120S)” across

recapture. The corporation will give

these columns.

Capital Gain (Loss)

you a statement that shows the

If the amount is a loss from a

Report the net long-term capital gain

information needed to recapture

passive activity, see Passive Loss

(loss) on Schedule D (Form 1040),

certain mining exploration costs

Limitations in the Instructions for

line 12.

(section 617). See Pub. 535 for

Form 4797. Report the loss following

details.

If you have any foreign

the Instructions for Form 8582 to

source net long-term capital

figure how much of the loss is

Code E. Other income (loss).

gain (loss), see the

allowed on Form 4797. If the

Amounts with code E are other items

CAUTION

instructions for line 14.

corporation had net section 1231 gain

of income, gain, or loss not included

(loss) from more than one activity, it

in boxes 1 through 9 or in box 10

Box 8b. Collectibles (28%)

will attach a statement that will

using codes A through D. The

Gain (Loss)

identify the section 1231 gain (loss)

corporation should give you a

Report collectibles gain or loss on line

from each activity.

description and the amount of your

4 of the 28% Rate Gain

share for each of these items.

If you have any foreign

Worksheet —Line 18 in the

Report loss items that are passive

source net section 1231 gain

Instructions for Schedule D (Form

activity amounts to you following the

(loss), see the instructions for

1040).

CAUTION

Instructions for Form 8582.

line 14.

Box 8c. Unrecaptured

Code E items may include the

Box 10. Other Income (Loss)

Section 1250 Gain

following.

•

Code A. Other portfolio income

Income from recoveries of tax

There are three types of

(loss). The corporation will report

benefit items. A tax benefit item is an

unrecaptured section 1250 gain.

portfolio income other than interest,

amount you deducted in a prior tax

Report your share of this

ordinary dividend, royalty, and capital

year that reduced your income tax.

unrecaptured gain on the

gain (loss) income, and attach a

Report this amount on Form 1040,

Unrecaptured Section 1250 Gain

statement to tell you what kind of

line 21, to the extent it reduced your

Worksheet —Line 19 in the

portfolio income is reported.

tax.

Instructions for Schedule D (Form

•

Gambling gains and losses.

1040) as follows.

If the corporation held a residual

•

1. If the corporation was not

interest in a real estate mortgage

Report unrecaptured section 1250

engaged in the trade or business of

investment conduit (REMIC), it will

gain from the sale or exchange of the

gambling, (a) report gambling

report on the statement your share of

corporation’s business assets on line

winnings on Form 1040, line 21 and

REMIC taxable income (net loss) that

•

(b) deduct gambling losses to the

Report unrecaptured section 1250

you report on Schedule E (Form

extent of winnings on Schedule A

gain from the sale or exchange of an

1040), line 38, column (d). The

(Form 1040), line 28.

interest in a partnership on line 10.

statement will also report your share

•

2. If the corporation was engaged

Report unrecaptured section 1250

of any “excess inclusion” that you

in the trade or business of gambling,

report on Schedule E (Form 1040),

gain from an estate, trust, regulated

(a) report gambling winnings on line

line 38, column (c), and your share of

investment company (RIC), or real

28 of Schedule E (Form 1040) and

estate investment trust (REIT) on line

section 212 expenses that you report

(b) deduct gambling losses (to the

11.

on Schedule E (Form 1040), line 38,

extent of winnings) on Schedule E

column (e). If you itemize your

If the corporation reports only

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

deductions on Schedule A (Form

unrecaptured section 1250 gain from

•

Gain (loss) from the disposition of

1040), you may also deduct these

the sale or exchange of its business

an interest in oil, gas, geothermal, or

section 212 expenses as a

assets, it will enter a dollar amount in

other mineral properties. The

miscellaneous deduction subject to

box 8c. If it reports the other two

corporation will attach a statement

the 2% limit on Schedule A (Form

types of unrecaptured gain, it will

that provides a description of the

1040), line 23.

provide an attached statement that

property, your share of the amount

Code B. Involuntary conversions.

shows the amount for each type of

realized from the disposition, your

unrecaptured section 1250 gain.

This is your net loss from involuntary

share of the corporation’s adjusted

conversions due to casualty or theft.

Box 9. Net Section 1231 Gain

basis in the property (for other than

The corporation will give you a

oil or gas properties), and your share

(Loss)

statement that shows the amounts to

of the total intangible drilling costs,

be reported on Form 4684,

The amount in box 9 is generally

development costs, and mining

Casualties and Thefts, line 34,

passive if it is from a:

exploration costs (section 59(e)

•

columns (b)(i), (b)(ii), and (c).

Rental activity, or

expenditures) passed through for the

•

Trade or business activity in which

If there was a gain (loss) from a

property. You must figure your gain or

you did not materially participate.

casualty or theft to property not used

loss from the disposition by

in a trade or business or for

However, an amount from a rental

increasing your share of the adjusted

income-producing purposes, the

real estate activity is not from a

basis by the intangible drilling costs,

corporation will provide you with the

passive activity if you were a real

development costs, or mine

estate professional (defined earlier)

information you need to complete

exploration costs for the property that

and you materially participated in the

Form 4684.

you capitalized (that is, costs that you

activity.

Code C. Section 1256 contracts

did not elect to deduct under section

If the amount is either (a) a loss

and straddles. The corporation will

59(e)). Report a loss in Part I of Form

that is not from a passive activity or

report any net gain or loss from

4797. Report a gain in Part III of

(b) a gain, report it on Form 4797, line

section 1256 contracts. Report this

Form 4797 in accordance with the

2, column (g). Do not complete

amount on Form 6781, Gains and

instructions for line 28. See

columns (b) through (f) on line 2 of

Losses From Section 1256 Contracts

Regulations section 1.1254-4 for

Form 4797. Instead, enter “From

and Straddles.

details.

-7-

Instructions for Schedule K-1 (Form 1120S)

2011 Shareholder'S Instructions For Schedule K-1 (Form 1120s) Page 7

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