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(see Regulations section 1.751-1(a) and

applicable credit per gallon. Use this

Computation of Section 737 Gain

Sale or Exchange of Partnership Interest,

information to complete Form 4136, Credit

1. Enter the FMV of the distributed

earlier). For details, see Pub. 541.

for Federal Tax Paid on Fuels.

property (other than

The partnership will separately identify

Code D. Qualified rehabilitation expendi-

money)

. . . . . . . . . . .

both of the following.

tures (other than rental real estate). The

2. Enter your adjusted basis in the

The FMV of the marketable securities

partnership immediately before

partnership will report your share of qualified

when distributed (minus your share of the

the distribution. See

Basis

rehabilitation expenditures and other

gain on the securities distributed to you).

Limitations

earlier

information you need to complete Form 3468

. . . . . .

The partnership's adjusted basis of those

3. Enter the amount of money

for property not related to rental real estate

received in the distribution

securities immediately before the

activities in box 20 using code D. Your share

4. Subtract line 3 from line 2. If zero

distribution.

of qualified rehabilitation expenditures

or less, enter -0-

. . . . . . .

related to rental real estate activities is

Decrease the adjusted basis of your

5. Subtract line 4 from line 1

reported in box 15 using code E. See the

. .

interest in the partnership (but not below

Instructions for Form 3468 for details. If the

zero) by the amount of cash distributed to

6. Enter your net precontribution

partnership is reporting expenditures from

you and the partnership's adjusted basis of

gain

. . . . . . . . . . . . .

more than one activity, the attached

the distributed securities. Advances or

7. Section 737 gain. Enter the

statement will separately identify the

drawings of money or property against your

lesser of the amount on line 5 or

expenditures from each activity.

share are treated as current distributions

line 6

. . . . . . . . . . . . .

made on the last day of the partnership's tax

Combine the expenditures (for Form

year.

3468 reporting) from box 15, code E and

box 20, code D. The expenditures related to

Your basis in the distributed marketable

The type of gain (section 1231 gain,

rental real estate activities (box 15, code E)

securities (other than in liquidation of your

capital gain) generated is determined by the

are reported on Schedule K-1 separately

interest) is the smaller of:

type of gain you would have recognized if

from other qualified rehabilitation

The partnership's adjusted basis in the

you sold the property rather than contributing

expenditures (box 20, code D) because they

securities immediately before the distribution

it to the partnership. Accordingly, report the

are subject to different passive activity

increased by any gain recognized on the

amount from line 7, above, on Form 4797 or

limitation rules. See the Instructions for Form

distribution of the securities, or

Form 8949 and the Schedule D of your tax

8582-CR for details.

The adjusted basis of your partnership

return.

interest reduced by any cash distributed in

Code E. Basis of energy property. If the

Code C. Other property. Code C shows

the same transaction and increased by any

partnership provides an attached statement

the partnership's adjusted basis of property

gain recognized on the distribution of the

for code E, use the information on the

other than money immediately before the

securities.

statement to complete lines 12a–d, 12f, 12g,

property was distributed to you. In addition,

If you received the securities in liquidation

12i, 12j, 12l, 12m, 12o, and 12q–u of Form

the partnership should report the adjusted

of your partnership interest, your basis in the

3468.

basis and FMV of each property distributed.

marketable securities is equal to the

Decrease the adjusted basis of your interest

Codes F and G. Recapture of low-income

adjusted basis of your partnership interest

in the partnership by the amount of your

housing credit. A section 42(j)(5)

reduced by any cash distributed in the same

basis in the distributed property. Your basis

partnership will report recapture of a

transaction and increased by any gain

in the distributed property (other than in

low-income housing credit with code F. All

recognized on the distribution of the

liquidation of your interest) is the smaller of:

other partnerships will report recapture of a

securities.

The partnership's adjusted basis

low-income housing credit with code G.

immediately before the distribution, or

Code B. Distribution subject to section

Keep a separate record of recapture from

The adjusted basis of your partnership

737. If a partner contributed section 704(c)

each of these sources so that you will be

interest reduced by any cash distributed in

built-in gain property within the last 7 years

able to correctly figure any recapture of

the same transaction.

and the partnership made a distribution of

low-income housing credit that may result

property to that partner other than the

from the disposition of all or part of your

If you received the property in liquidation

previously contributed built-in gain property,

partnership interest. For details, see Form

of your interest, your basis in the distributed

the partner may be required to recognize

8611.

property is equal to the adjusted basis of

gain under section 737. This gain is in

your partnership interest reduced by any

Code H. Recapture of investment credit.

addition to any gain recognized under

cash distributed in the same transaction.

The partnership will provide any information

section 731 on the distribution.

If you receive cash or property in

you need to figure your recapture tax on

When this occurs, the partnership will

exchange for any part of a partnership

Form 4255, Recapture of Investment Credit.

enter code B in box 19 of the contributing

interest, the amount of the distribution

See the Form 3468 on which you took the

partner's Schedule K-1 and attach a

attributable to your share of the partnership's

original credit for other information you need

statement that provides the information the

unrealized receivable or inventory items

to complete Form 4255.

partner needs to figure the recognized gain

results in ordinary income (see Regulations

You may also need Form 4255 if you

under section 737. The partnership is

section 1.751-1(a) and Sale or Exchange of

disposed of more than one-third of your

required to provide the following information.

Partnership Interest, earlier).

interest in a partnership.

The fair market value (FMV) of the

distributed property (other than money).

Code I. Recapture of other credits. On a

Box 20. Other Information

The amount of money received in the

statement attached to Schedule K-1, the

distribution.

partnership will report any information you

Code A. Investment income. Report this

The net precontribution gain of the

need to figure the recapture of the new

amount on line 4a of Form 4952.

partner.

markets credit (see Form 8874 and Form

8874-B, Notice of Recapture Event for New

Using the information from the attached

Code B. Investment expenses. Report

Markets Credit); Indian employment credit

statement, complete the worksheet below to

this amount on line 5 of Form 4952.

(see section 45A(d)); any credit for

figure your recognized gain under section

Code C. Fuel tax credit information. The

employer-provided childcare facilities and

737.

partnership will report the number of gallons

services (see Form 8882); alternative motor

of each fuel sold or used during the tax year

vehicle credit (see section 30B(h)(8));

for a nontaxable use qualifying for the credit

alternative fuel vehicle refueling property

for taxes paid on fuels, type of use, and the

credit (see section 30C(e)(5)); or the new

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

-14-

Instructions For Schedule K-1 (Form 1065) - Partner'S Share Of Income, Deductions, Credits, Etc. - 2017 Page 14

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