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) - 2003 Page 10
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10property (other than in liquidation of your
which the partnership held the qualified
foreign trading gross receipts from all
interest) is the smaller of:
small business stock (more than 6
sources for the tax year also must have
•
The partnership’s adjusted basis
months prior to the sale) and
been $5 million or less. See Form 8873,
immediately before the distribution or
2. Your distributive share of the gain
Extraterritorial Income Exclusion, for more
•
The adjusted basis of your partnership
eligible for the section 1045 rollover
information. If you qualify for the
interest reduced by any cash distributed
cannot exceed the amount that would
exclusion, limited partners must report the
in the same transaction.
have been allocated to you based on your
extraterritorial exclusion amount (Code
interest in the partnership at the time the
Q2) as a deduction reducing the amount
If you received the property in
stock was acquired.
reported in box 1 (see the box 1
liquidation of your interest, your basis in
instructions on page 6). General partners
the distributed property is equal to the
See the Instructions for Schedule D
who qualify for the exclusion must report
adjusted basis of your partnership interest
(Form 1040) for details on how to report
the Code Q2 amount in accordance with
reduced by any cash distributed in the
the gain and the amount of the allowable
the instructions for box 9, Code A1, B1, or
same transaction.
postponed gain.
C1, whichever applies.
If you contributed appreciated property
Code O9. Gain eligible for section 1045
b. Partnership claimed the exclusion. If
to the partnership within 5 years of a
rollover – stock not replaced. This gain
the partnership reports your distributive
distribution of other property to you, and
is eligible for the section 1045 rollover.
share of foreign trading gross receipts
the fair market value of the other property
Replacement stock has not been
(Code Q1) but not the amount of the
exceeded the adjusted basis of your
purchased by the partnership. The
extraterritorial income exclusion, the
partnership interest immediately before
partnership should also give you the
partnership met the foreign economic
the distribution (reduced by any cash
name of the corporation that issued the
process requirements and claimed the
received in the distribution), you may
stock, your share of the partnership’s
exclusion when figuring your distributive
have to recognize gain on the appreciated
adjusted basis and sales price of the
share of partnership income. You also
property. For property contributed after
stock, and the dates the stock was bought
may need to know the amount of your
June 8, 1997, the 5-year period is
and sold. Corporate partners are not
distributive share of foreign trading gross
generally extended to 7 years. See
eligible for the section 1045 rollover. To
receipts from this partnership to
section 737 for details.
qualify for the section 1045 rollover:
determine if you met the $5 million or less
Code O7. Gain eligible for section 1202
1. You must have held an interest in
exception discussed above for purposes
exclusion. This gain from the sale or
the partnership during the entire period in
of qualifying for an extraterritorial income
exchange of qualified small business
which the partnership held the qualified
exclusion from other sources.
stock (as defined in the Instructions for
small business stock (more than 6
Note: Upon request, the partnership
Schedule D) is eligible for the partial
months prior to the sale),
should furnish you a copy of the
section 1202 exclusion. The partnership
2. Your distributive share of the gain
partnership’s Form 8873 if there is a
should also give you the name of the
eligible for the section 1045 rollover
reduction for international boycott
corporation that issued the stock, your
cannot exceed the amount that would
operations, illegal bribes, kickbacks, etc.
share of the partnership’s adjusted basis
have been allocated to you based on your
and sales price of the stock, and the
Code R. Qualified 5-year Gain
interest in the partnership at the time the
dates the stock was bought and sold.
stock was acquired, and
Report the qualified 5-year gain on line 5
Corporate partners are not eligible for the
3. You must purchase other qualified
of the Qualified 5-year Gain Worksheet
section 1202 exclusion. The following
small business stock (as defined in the
for Schedule D (Form 1040), line 35.
additional limitations apply at the partner
Instructions for Schedule D (Form 1040))
Code S. Commercial Revitalization
level:
during the 60-day period that began on
Deduction
1. You must have held an interest in
the date the stock was sold by the
the partnership when the partnership
Follow the instructions on Form 8582 for
partnership.
acquired the qualified small business
commercial revitalization deductions from
stock and at all times thereafter until the
See the Instructions for Schedule D
rental real estate activities to figure how
partnership disposed of the qualified
(Form 1040) for details on how to report
much of the deduction can be reported on
small business stock.
the gain and the amount of the allowable
Schedule E, Part II, column (f).
2. Your distributive share of the
postponed gain.
Disclosure of Reportable
eligible section 1202 gain cannot exceed
Code P. Unrecaptured Section
Transactions
the amount that would have been
1250 Gain
The partnership will report any
allocated to you based on your interest in
Report this gain on line 11 of the
information you need to disclose
the partnership at the time the stock was
Unrecaptured Section 1250 Gain
information on certain reportable
acquired.
Worksheet on page D-7 of the
transactions in which the partnership
See the Instructions for Schedule D
Instructions for Schedule D (Form 1040).
participates. If the partnership participates
(Form 1040) for details on how to report
Do not report the gain on line 5 as stated
in a transaction that must be disclosed on
the gain and the amount of the allowable
in the worksheet instructions.
Form 8886, Reportable Transaction
exclusion.
Disclosure Statement, both the
Codes Q1 and Q2. Extraterritorial
Code O8. Gain eligible for section 1045
partnership and its partners may be
Income Exclusion
required to file Form 8886 for the
rollover – stock replaced. This gain is
a. Partnership did not claim the
eligible for the section 1045 rollover.
transaction. The determination of whether
exclusion. If the partnership reports your
Replacement stock has been purchased
you are required to disclose a partnership
distributive share of foreign trading gross
by the partnership. The partnership
transaction is based on the category(s)
receipts (Code Q1) and the extraterritorial
should also give you the name of the
under which the transaction qualified for
income exclusion (Code Q2), the
corporation that issued the stock, your
disclosure. See the Instructions for Form
partnership was not entitled to claim the
share of the partnership’s adjusted basis
8886 for details.
exclusion because it did not meet the
and sales price of the stock, and the
Other
foreign economic process requirements.
dates the stock was bought and sold.
Any other information you may need to
You may qualify for your distributive share
Corporate partners are not eligible for the
file with your return not shown elsewhere
of this exclusion because the
section 1045 rollover. To qualify for the
on Schedule K-1. The partnership should
partnership’s foreign trading gross
section 1045 rollover:
give you a description and the amount of
receipts for the tax year were $5 million or
1. You must have held an interest in
your share for each of these items.
less. To qualify for this exclusion, your
the partnership during the entire period in
-10-
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