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) - 2014 Page 5
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13provide services (such as repairs) in a
disposed of, any unused losses are
The exclusion of amounts received
significant and bona fide sense.
allowed in full in the year of disposition.
under an employer's adoption assistance
Management decisions that can count as
program.
If you have an overall gain from a PTP,
active participation include approving new
the net gain is nonpassive income. In
Commercial revitalization
tenants, deciding rental terms, approving
addition, the nonpassive income is
deduction. The special $25,000
capital or repair expenditures, and other
included in investment income to figure
allowance for the commercial revitalization
similar decisions.
your investment interest expense
deduction from rental real estate activities
An estate is a qualifying estate if the
deduction.
is not subject to the active participation
decedent would have satisfied the active
Do not report passive income, gains, or
rules or modified adjusted gross income
participation requirement for the activity
losses from a PTP on Form 8582. Instead,
limits discussed above. See Code Q,
for the tax year the decedent died. A
use the following rules to figure and report
Commercial Revitalization Deduction,
qualifying estate is treated as actively
on the proper form or schedule your
later.
participating for tax years ending less than
income, gains, and losses from passive
Special rules for certain other activi-
2 years after the date of the decedent's
activities that you held through each PTP
ties. If you have net income (loss),
death.
you owned during the tax year.
deductions, or credits from any activity to
Modified adjusted gross income
1. Combine any current year income,
which special rules apply, the partnership
limitation. The maximum special
gains (losses), and any prior year
will identify the activity and all amounts
allowance that single individuals and
unallowed losses to see if you have an
relating to it on Schedule K-1 or on an
married individuals filing a joint return can
overall gain (loss) from the PTP. Include
attached statement.
qualify for is $25,000. The maximum is
only the same types of income and losses
If you have net income subject to
$12,500 for married individuals who file
you would include in your net income or
recharacterization under Temporary
separate returns and who lived apart all
loss from a non-PTP passive activity. See
Regulations section 1.469-2T(f) and
times during the year. The maximum
Pub. 925 for more details.
Regulations section 1.469-2(f), report
special allowance for which an estate can
2. If you have an overall gain, the net
such amounts according to the
qualify is $25,000 reduced by the special
gain portion (total gain minus total losses)
Instructions for Form 8582 (or Form 8810).
allowance for which the surviving spouse
is nonpassive income. On the form or
If you have net income (loss),
qualifies.
schedule you normally use, report the net
deductions, or credits from any of the
If your modified adjusted gross income
gain portion as nonpassive income and
following activities, treat such amounts as
(defined below) is $100,000 or less
the remaining income and the total losses
nonpassive and report them as instructed
($50,000 or less if married filing
as passive income and loss. To the left of
in these instructions.
separately), your loss is deductible up to
the entry space, enter “From PTP.” It is
Working interests in oil and gas wells.
the amount of the maximum special
important to identify the nonpassive
The rental of a dwelling unit any partner
allowance referred to in the preceding
income because the nonpassive portion is
used for personal purposes during the
paragraph. If your modified adjusted gross
included in modified adjusted gross
year for more than the greater of 14 days
income is more than $100,000 (more than
income for purposes of figuring on Form
or 10% of the number of days that the
$50,000 if married filing separately), the
8582 the “special allowance” for active
residence was rented at fair rental value.
special allowance is limited to 50% of the
participation in a non-PTP rental real
Trading personal property for the
difference between $150,000 ($75,000 if
estate activity. In addition, the nonpassive
account of owners of interests in the
married filing separately) and your
income is included in investment income
activity.
modified adjusted gross income. When
when figuring your investment interest
modified adjusted gross income is
expense deduction on Form 4952,
Self-charged interest. The partnership
$150,000 or more ($75,000 or more if
Investment Interest Expense Deduction.
must report any “self-charged” interest
married filing separately), there is no
income or expense that resulted from
Example. If you have Schedule E
special allowance.
loans between you and the partnership (or
income of $8,000, and a Form 4797 prior
between the partnership and another
Modified adjusted gross income is your
year unallowed loss of $3,500 from the
partnership in which you have an interest).
adjusted gross income figured without
passive activities of a particular PTP, you
If there was more than one activity, the
taking into account the following amounts,
have a $4,500 overall gain ($8,000 −
partnership will provide a statement
if applicable.
$3,500). On Schedule E (Form 1040),
allocating the interest income or expense
Any passive activity loss.
line 28, report the $4,500 net gain as
with respect to each activity. The
Any rental real estate loss allowed
nonpassive income in column (j). In
self-charged interest rules do not apply to
column (g), report the remaining
under section 469(c)(7) to real estate
your partnership interest if the partnership
professionals (as defined earlier).
Schedule E gain of $3,500 ($8,000 −
made an election under Regulations
$4,500). On the appropriate line of Form
Any overall loss from a publicly traded
section 1.469-7(g) to avoid the application
4797, report the prior year unallowed loss
partnership.
of these rules. See the Instructions for
of $3,500. Be sure to enter “From PTP” to
Any taxable social security or
Form 8582 for more information.
the left of each entry space.
equivalent railroad retirement benefits.
Any deductible contributions to an IRA
Publicly traded partnerships. The
3. If you have an overall loss (but did
or certain other qualified retirement plans
passive activity limitations are applied
not dispose of your entire interest in the
under section 219.
separately for items (other than the
PTP to an unrelated person in a fully
The domestic production activities
low-income housing credit and the
taxable transaction during the year), the
deduction.
rehabilitation credit) from each PTP. Thus,
losses are allowed to the extent of the
The student loan interest deduction.
a net passive loss from a PTP may not be
income, and the excess loss is carried
The tuition and fees deduction.
deducted from other passive income.
forward to use in a future year when you
Instead, a passive loss from a PTP is
have income to offset it. Report as a
The deduction for one-half of
suspended and carried forward to be
passive loss on the schedule or form you
self-employment taxes.
applied against passive income from the
normally use the portion of the loss equal
The exclusion from income of interest
same PTP in later years. If the partner's
to the income. Report the income as
from Series EE and I U.S. Savings Bonds
entire interest in the PTP is completely
used to pay higher education expenses.
Instructions for Schedule K-1 (1065-B)
-5-
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