Looking for a Schedule K-1 Templates? Download it for free!

participation requirement for the activity

If you have net income subject to

such amounts are included in either of

for the tax year the decedent died. A

recharacterization under Temporary

these categories.

qualifying estate is treated as actively

Regulations section 1.469-2T(f) and

If your partnership is engaged in two or

participating for tax years ending less

Regulations section 1.469-2(f), report

more different types of activities subject to

than 2 years after the date of the

such amounts according to the

the at-risk provisions, or a combination of

decedent’s death.

Instructions for Form 8582 (or Form

at-risk activities and any other activity, the

8810).

partnership should give you a statement

Modified adjusted gross income

showing your share of nonrecourse

limitation. The maximum special

If you have net income (loss),

liabilities, partnership-level qualified

allowance that single individuals and

deductions, or credits from any of the

nonrecourse financing, and other

married individuals filing a joint return can

following activities, treat such amounts as

liabilities for each activity.

qualify for is $25,000. The maximum is

nonpassive and report them as instructed

$12,500 for married individuals who file

in column (c) of Schedule K-1 or in these

Qualified nonrecourse financing

separate returns and who lived apart all

instructions:

secured by real property used in an

times during the year. The maximum

activity of holding real property that is

1. Working interests in oil and gas

special allowance for which an estate can

subject to the at-risk rules is treated as an

wells if you are a general partner.

qualify is $25,000 reduced by the special

amount at risk. Qualified nonrecourse

2. The rental of a dwelling unit any

allowance for which the surviving spouse

financing generally includes financing for

partner used for personal purposes during

qualifies.

which no one is personally liable for

the year for more than the greater of 14

repayment that is borrowed for use in an

days or 10% of the number of days that

If your modified adjusted gross income

activity of holding real property and that is

the residence was rented at fair rental

(defined below) is $100,000 or less

loaned or guaranteed by a Federal, state,

value.

($50,000 or less if married filing

or local government or borrowed from a

3. Trading personal property for the

separately), your loss is deductible up to

“qualified” person.

account of owners of interests in the

the amount of the maximum special

activity.

allowance referred to in the preceding

Qualified persons include any persons

paragraph. If your modified adjusted

actively and regularly engaged in the

gross income is more than $100,000

Self-charged interest. The partnership

business of lending money, such as a

(more than $50,000 if married filing

will report any “self-charged” interest

bank or savings and loan association.

separately), the special allowance is

income or expense that resulted from

Qualified persons generally do not

limited to 50% of the difference between

loans between you and the partnership

include related parties (unless the

$150,000 ($75,000 if married filing

(or between the partnership and another

nonrecourse financing is commercially

separately) and your modified adjusted

partnership or S corporation if both

reasonable and on substantially the same

gross income. When modified adjusted

entities have the same owners with the

terms as loans involving unrelated

gross income is $150,000 or more

same proportional ownership interest in

persons), the seller of the property, or a

($75,000 or more if married filing

each entity). If there was more than one

person who receives a fee for the

separately), there is no special allowance.

activity, the partnership will provide a

partnership’s investment in the real

statement allocating the interest income

property.

Modified adjusted gross income is

or expense with respect to each activity.

your adjusted gross income figured

See Pub. 925 for more information on

The self-charged interest rules do not

without taking into account:

qualified nonrecourse financing.

•

apply to your partnership interest if the

Any passive activity loss.

Both the partnership and you must

•

partnership made an election under

Any rental real estate loss allowed

meet the qualified nonrecourse rules on

Regulations section 1.469-7(g) to avoid

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

this debt before you can include the

the application of these rules. See the

professionals (as defined on page 3).

amount shown next to “Qualified

•

Instructions for Form 8582 for more

Any taxable social security or

nonrecourse financing” in your at-risk

information.

equivalent railroad retirement benefits.

computation.

•

Any deductible contributions to an IRA

See Limitations on Losses,

or certain other qualified retirement plans

Deductions, and Credits beginning on

under section 219.

Specific Instructions

•

page 2 for more information on the at-risk

The student loan interest deduction.

•

limitations.

The tuition and fees deduction.

•

General Information and

The deduction for one-half of

Item G

self-employment taxes.

Questions

•

If the partnership is a registration-required

The exclusion from income of interest

tax shelter or has invested in a

from Series EE or I U.S. Savings Bonds

Item F

registration-required tax shelter, it should

used to pay higher education expenses.

•

Item F should show your share of the

have completed Item G. If you claim or

The exclusion of amounts received

partnership’s nonrecourse liabilities,

report any income, loss, deduction, or

under an employer’s adoption assistance

partnership-level qualified nonrecourse

credit from a tax shelter, you must attach

program.

financing, and other liabilities as of the

Form 8271, Investor Reporting of Tax

Commercial revitalization

end of the partnership’s tax year. If you

Shelter Registration Number, to your tax

deduction. The special $25,000

terminated your interest in the partnership

return. If the partnership has invested in a

allowance for the commercial

during the tax year, Item F should show

tax shelter, it must give you a copy of its

revitalization deduction from rental real

the share that existed immediately before

Form 8271 with your Schedule K-1. Use

estate activities is not subject to the active

the total disposition. A partner’s “other

this information to complete your Form

participation rules or modified adjusted

liability” is any partnership liability for

8271.

gross income limits discussed on page 4.

which a partner is personally liable.

If the partnership itself is a

See item 28 of the supplemental

registration-required tax shelter, use the

Use the total of the three amounts for

information instructions on page 12.

information on Schedule K-1 (name of the

computing the adjusted basis of your

Special rules for certain other

partnership, partnership identifying

partnership interest.

activities. If you have net income (loss),

number, and tax shelter registration

deductions, or credits from any activity to

Generally, you may use only the

number) to complete your Form 8271.

which special rules apply, the partnership

amounts shown next to “Qualified

Item H

will identify the activity and all amounts

nonrecourse financing” and “Other” to

relating to it on Schedule K-1 or on an

compute your amount at risk. Do not

If the box in Item H is checked, you are a

attachment.

include any amounts that are not at risk if

partner in a publicly traded partnership

-5-

Partner’s Instructions for Schedule K-1 (Form 1065)

Partner'S Instructions For Schedule K-1 (Form 1065) - Partner'S Share Of Income, Credits, Deductions, Etc. (For Partner'S Use Only) - 2003 Page 5

Related Articles

Related forms

Related Categories