General Instructions: 2012 Ia 1065 Partnership Return Of Income File Electronically (Page 2 of 2) in pdf

Bonus Depreciation:

Instructions for IA 1065 Schedule K-1: Partner’s Share of

For any assets placed in service after September 10, 2001, but before

Income, Deductions, & Modifications

May 6, 2003, Iowa continues to disallow the 30% bonus depreciation

Form IA K-1 shows each partner’s share of modifications, all-source

provisions of the federal Job Creation and Worker Assistance Act of 2002.

income, Iowa apportioned income, and Iowa tax credits. You must provide

In addition, Iowa does not allow the 50% or 100% bonus depreciation

complete information for each partner in an acceptable format. For your

provisions for assets acquired after December 31, 2007, and before

convenience, forms IA 1065 and IA Schedule K-1 are provided on our Web

January 1, 2013. Form IA 4562A must be filed to account for these

site. Individual partners: When completing your individual IA 1040, report

differences between Iowa and federal. The section 179 expensing limitation

the column (a) items. In addition, individual nonresident partners report

is $139,000 for tax years beginning in 2012.

totals from column (c) on Iowa form IA 126, “Iowa Nonresident and Part-

Line 4 - Total of lines 2 and 3.

year Resident Credit.”

Line 5 - Enter the total interest received from federal securities such as

PART I: GENERAL INFORMATION

U.S. Treasury bonds, notes, bills, and savings bonds included in taxable

Partnership/LLC information

income for federal income tax purposes. Include any loss on the sale or

Enter name and FEIN of partnership on each IA K-1 form.

exchange of a share from a regulated investment company held for six

Partner information

months or less to the extent the loss was disallowed under section

Enter name, Social Security Number or FEIN, and address of partner.

852(b)(4)(B) of the Internal Revenue Code.

Check the amended box if the K-1 is part of an amended 1065 return.

Line 6 - If a partnership is a member of another partnership or the

Check the appropriate box for the partner’s entity type.

beneficiary of an estate or trust, enter on this line the partnership’s

distributive share of REDUCTIONS furnished you by the other partnership

Check either the resident partner or nonresident partner box, based on

or estate or trust.

the partner’s current address.

Federal Work Opportunity Tax Credit, Employer Social Security Credit for

Enter partner’s percentage of ownership in the partnership.

Tips, and Alcohol and Cellulosic Biofuel Credit. Enter the amount of credits

Enter the partnership’s Iowa receipts, as reported on page 1, Part IV, line

allowable for the tax year to the extent that the credit increased federal

12, column A, of the IA 1065*.

partnership income.

Enter the partnership’s total receipts, as reported on page 1, Part IV, line

Additional Deduction for Wages Paid to Certain Individuals. Qualifying

12, column B, of the IA 1065*.

businesses may also take an additional deduction of wages paid to new

* If BAR is 100%, enter the Gross Receipts from line 1a, page 1 of the

employees who qualify as persons with disabilities or as ex-offenders.

federal 1065.

Line 7 - Add lines 5 and 6.

Corporate partners: Include your share of the partnership’s Iowa receipts

Line 8 - Subtract line 7 from line 4. This could result in either a positive

and total receipts in the business activity ratio (BAR) on the IA 1120.

or negative number.

Enter the partnership’s BAR from page 1, Part IV, line 13, of the IA 1065.

Line 9 - Add lines 1 and 8. This is the adjusted all-source income of the

PART II: PARTNER’S PRO RATA SHARE ITEMS:

partnership.

Column (a), lines 1 through 15(f):

PART IV – Business Activity Ratio (BAR)

Enter the same amounts as shown on the federal K-1. These figures are

If the partnership is doing business wholly within Iowa: Skip lines 1 -

reportable as part of income/loss on your IA 1040.

12 and enter 100.00 on line 13.

If the partnership is doing business both within and without Iowa:

Leave columns (b) and (c) blank for resident partners.

Complete all applicable lines. Dividends are net of special deductions.

Column (b), lines 1 through 15(f):

Business income means income which arises from the partnership’s unitary

For nonresident partners only, enter the partnership’s single factor Iowa

trade or business, a part of which is conducted within Iowa. Business

BAR. The BAR in column (b) must be applied equally to each line item

income must be apportioned to Iowa by means of the business activity ratio.

in column (a); no method of “separate accounting” is allowed. Please

Investment income may at the taxpayer’s election be included in the

see our Web site ( ) for more

computation of the business activity ratio. The taxpayer will have elected

information on the BAR for investment partnerships.

whether to include investment income in the computation of the business

Column (c), lines 1 through 15(f):

activity ratio for that and all subsequent years. Consequently, that year and

For nonresident partners only, multiply the amounts in column (a) by the

for subsequent years total investment income which is determined to be

percentage in column (b) and enter the product in column (c) for each line

business income will be included in the numerator as follows:

item. This is the amount apportionable to Iowa. Nonresidents: These figures

(1) Accounts receivable interest is to be included in the numerator to the

may be reportable on your IA 126 nonresident schedule.

extent allocable to Iowa.

Line 15(f) schedule: Show name and amount for each item reported on

(2) Other interest, net dividends, capital and ordinary gains, and royalties

line 15(f).

from intangibles must be included in the numerator if the commercial

Line 16(a): Enter the partner’s all-source modifications. This figure is equal

domicile is in Iowa.

to the partnership’s all-source modifications multiplied by the partner’s

(3) All investment income that is business income, including capital gains

ownership percentage. Individual partners: If this figure is a positive

or losses, must be included in the computation of the business activity

amount, report it on line 14 of your IA 1040. If this figure is a negative

ratio if the investment income is derived from intangible property that

amount, report it on line 24 of your IA 1040.

has become an integral part of some business activity occurring

Line 16(b): For nonresident partners only, enter the Iowa BAR.

regularly in or outside of Iowa. See Iowa Rule 54.2(3) for clarification.

Line 16(c): For nonresident partners only, multiply line 16(a) by the

(4) Capital and ordinary gains or losses, or rent and royalties from real

percentage on line 16(b) and enter here. Nonresident Partners: If this entry

property must be included in the numerator for property located in Iowa.

is a positive amount, also enter it on line 14 of your IA 126 form. If this

PART V

entry is a negative amount, enter it on line 24 of your IA 126 form.

Enter the partnership’s Iowa net income for three preceding years.

Part III: Partner’s Portion of IA Credits/Withholding: If the partnership

submitted Iowa withholding for the partner, enter it in the current-year

SIGNATURE:

amount column on the first line of the schedule. If none, enter zero.

The return must be signed and dated by a partner or member. The return

will not be considered valid unless this requirement is met. Also include

For all other credits, enter the tax credit name in the first column. If you

the signer’s title and daytime phone number.

received the credit from an Iowa governmental agency, enter your certificate

number in the second column. Enter the partner’s share of the current-year

PREPARER’S INFORMATION AND SIGNATURE:

amount in the third column.

Preparer’s signature and date signed. Preparer’s address and ID number.

41-017b (09/12/12)

General Instructions: 2012 Ia 1065 Partnership Return Of Income File Electronically Page 2

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