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

•

Low sulfur diesel fuel production credit

an individual shareholder, report this amount

placed in service after September 13, 1995,

(Form 8896).

on line 16 of Form 6251.

and depreciated under the income forecast

•

General credits from an electing large

method.

Code C. This amount is your share of the

partnership. Report these credits on Form

corporation’s depletion adjustment. If you are

Use Form 8866, Interest Computation

3800, line 1t.

an individual shareholder, report this amount

Under the Look-Back Method for Property

on line 9 of Form 6251.

Code W. Recapture of other credits. On an

Depreciated Under the Income Forecast

attachment to Schedule K-1, the corporation

Codes D and E. Oil, gas, & geothermal

Method, to report any such interest.

will report any information you need to figure

properties — gross income and deductions.

Code E. Dispositions of property with

the recapture of the new markets credit;

The amounts reported on these lines include

section 179 deductions. The corporation will

qualified electric vehicle credit (see Pub. 535);

only the gross income from, and deductions

report your pro rata share of gain or loss on the

Indian employment credit (see section 45A(d));

allocable to, oil, gas, and geothermal

sale, exchange, or other disposition of property

or any credit for employer-provided childcare

properties included in box 1 of Schedule K-1.

for which a section 179 expense deduction was

facilities and services.

The corporation will report separately any

passed through to shareholders. If the

income from or deductions allocable to such

Box 14. Foreign Transactions

corporation passed through a section 179

properties that are included in boxes 2 through

deduction for the property, you must report the

Codes A through N. Use the information

12, and 17. Use the amounts reported here

gain or loss and any recapture of the section

and any other reported amounts to help you

identified by codes A through N and attached

179 expense deduction for the property on

schedules to figure your foreign tax credit. For

determine the net amount to enter on line 25 of

your income tax return (see the instructions for

more information, see Form 1116, Foreign Tax

Form 6251.

Form 4797 for details). The corporation will

Credit, and its instructions. Also see Pub. 514,

Code F. Other AMT Items. Enter the

provide all the following information with

Foreign Tax Credit for Individuals.

information on the statement attached by the

respect to a disposition of property for which a

corporation, along with items from other

Codes O and P. Extraterritorial income

section 179 expense deduction was passed

sources, on the applicable lines of Form 6251.

exclusion.

through to shareholders.

1. Corporation did not claim the exclusion.

Box 16. Items Affecting Shareholder

1. Description of the property.

If the corporation reports your pro rata share of

Basis

2. Date the property was acquired and

foreign trading gross receipts (code O) and the

placed in service.

Code A. Tax-exempt interest income. You

extraterritorial income exclusion (code P), the

3. Date of the sale or other disposition of

must report on your return, as an item of

corporation was not entitled to claim the

the property.

information, your share of the tax-exempt

exclusion because it did not meet the foreign

4. Your pro rata share of the gross sales

interest received or accrued by the corporation

economic process requirements. You may still

price or amount realized.

during the year. Individual shareholders include

qualify for your pro rata share of this exclusion

5. Your pro rata share of the cost or other

this amount on Form 1040, line 8b. Generally,

if the corporation’s foreign trading gross

basis plus the expense of sale (reduced as

you must increase the basis of your stock by

receipts for the tax year were $5 million or less.

explained in the instructions for Form 4797,

this amount.

To qualify for this exclusion, your foreign

line 21).

trading gross receipts from all sources for the

Code B. Other tax-exempt income.

6. Your pro rata share of the depreciation

tax year also must have been $5 million or

Generally, you must increase the basis of your

allowed or allowable, determined as described

less. If you qualify for the exclusion, report the

stock by the amount shown, but do not include

in the instructions for Form 4797, line 22, but

exclusion amount in accordance with the

it in income on your tax return.

excluding the section 179 expense deduction.

instructions beginning on page 4 for boxes 1,

7. Your pro rata share of the section 179

Code C. Nondeductible expenses. The

2, or 3, whichever applies. See Form 8873,

expense deduction (if any) passed through for

nondeductible expenses paid or incurred by

Extraterritorial Income Exclusion, for more

the property and the corporation’s tax year(s)

the corporation are not deductible on your tax

information.

in which the amount was passed through.

return. Generally, you must decrease the basis

2. Corporation claimed the exclusion. If the

of your stock by this amount.

To compute the amount of depreciation

corporation reports your pro rata share of

allowed or allowable for Form 4797, line 22,

Code D. Property distributions. Reduce the

foreign trading gross receipts but not the

add to the amount from item 6 above the

basis of your stock (as explained on page 2) by

amount of the extraterritorial income exclusion,

amount of your pro rata share of the section

these distributions. If these distributions

the corporation met the foreign economic

179 expense deduction, reduced by any

exceed the basis of your stock, the excess is

process requirements and claimed the

unused carryover of the deduction for this

treated as capital gain from the sale or

exclusion when figuring your pro rata share of

property. This amount could be different than

exchange of property and is reported on

corporate income. You also may need to know

the amount of section 179 expense you

Schedule D (Form 1040).

the amount of your pro rata share of foreign

deducted for the property if your interest in the

Code E. Repayment of loans from

trading gross receipts from this corporation to

corporation has changed.

shareholders. If these payments are made on

determine if you met the $5 million or less

8. If the disposition is due to a casualty or

a loan with a reduced basis, the repayments

exception discussed above for purposes of

theft, a statement providing the information you

must be allocated in part to a return of your

qualifying for an extraterritorial income

need to complete Form 4684, Casualties and

basis in the loan and in part to the receipt of

exclusion from other sources.

Thefts.

income. See Regulations section 1.1367-2 for

9. If the sale was an installment sale made

Note: Upon request, the corporation should

information on reduction in basis of a loan and

during the corporation’s tax year, a statement

furnish you a copy of the corporation’s Form

restoration in basis of a loan with a reduced

providing the information you need to complete

8873 if there is a reduction for international

basis. See Rev. Rul. 64-162, 1964-1 (Part 1)

Form 6252, Installment Sale Income. The

boycott operations, illegal bribes, kickbacks,

C.B. 304 and Rev. Rul. 68-537, 1968-2 C.B.

corporation will separately report your share of

etc.

372, for other information.

all payments received from the property in the

Code Q. Other foreign transactions. On an

Box 17. Other Information

following tax years. See the instructions for

attachment to Schedule K-1, the corporation

Form 6252 for details.

will report any other information on foreign

Code A. Investment income. Report this

transactions that you may need using code Q.

amount on line 4a of Form 4952.

Code F. Recapture of section 179

Code B. Investment expenses. Report this

Box 15. Alternative minimum tax (AMT)

deduction. The corporation will report your

amount on line 5 of Form 4952.

pro rata share of any recapture of section 179

items

Code C. Look back interest — completed

expense deduction if business use of any

Use the information reported in box 15 (as well

long-term contracts. The corporation will

property dropped to 50 percent or less. If this

as adjustments and tax preference items from

report any information you need to figure the

occurs, the corporation must provide the

other sources) to prepare your Form 6251,

interest due or to be refunded under the

following information.

Alternative Minimum Tax — Individuals, or

look-back method of section 460(b)(2) on

1. Your pro rata share of the depreciation

Schedule I of Form 1041, U.S. Income Tax

certain long-term contracts. Use Form 8697,

allowed or allowable (not including the section

Return for Estates and Trusts.

Interest Computation Under the Look-Back

179 expense deduction).

Code A. This amount is your share of the

Method for Completed Long-Term Contracts,

2. Your pro rata share of the section 179

corporation’s post-1986 depreciation

to report any such interest.

expense deduction (if any) passed through for

adjustment. If you are an individual

Code D. Look back interest — income

the property and the corporation’s tax year(s)

shareholder, report this amount on line 17 of

forecast method. The corporation will report

in which the amount was passed through.

Form 6251.

any information you need to figure the interest

Reduce this amount by the portion, if any, of

Code B. This amount is your share of the

due or to be refunded under the look-back

your unused (carryover) section 179 expense

corporation’s adjusted gain or loss. If you are

method of section 167(g)(2) for certain property

deduction for this property.

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Instructions for Schedule K-1 (Form 1120S)

Shareholder'S Instructions For Schedule K-1 (Form 1120s) - 2004 Page 8

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