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b. If a loss is reported in box 1, follow

report the income following the rules for

Investment Interest Expense Deduction, for

the Instructions for Form 8582 to figure how

Publicly traded partnerships, earlier.

important information on making this

much of the loss can be reported on

election.

Box 3. Other Net Rental Income

Schedule E (Form 1040), line 28, column (f).

(Loss)

If you have any foreign source

However, if the box in item D is checked,

qualified dividends, see the

report the loss following the rules for Publicly

The amount in box 3 is a passive activity

traded partnerships, earlier.

instructions for box 16, later.

amount for all partners. If the partnership had

CAUTION

more than one rental activity, it will attach a

Box 2. Net Rental Real Estate

In the case of a corporate partner,

statement identifying the income or loss from

Income (Loss)

the partnership will attach a

TIP

each activity. Report the income or loss as

statement to the Schedule K-1

Generally, the income (loss) reported in

follows.

explaining what part of the dividends

box 2 is a passive activity amount for all

1. If box 3 is a loss, follow the

included in boxes 6a and 6b is eligible for the

partners. However, the income (loss) in

Instructions for Form 8582 to figure how

“dividends received by corporations

box 2 isn't from a passive activity if you were

much of the loss can be reported on

deduction” under section 243(a), (b), or (c).

a real estate professional (defined earlier)

Schedule E (Form 1040), line 28, column (f).

and you materially participated in the activity.

Box 7. Royalties

However, if the box in item D is checked,

If the partnership had more than one rental

report the loss following the rules for Publicly

Report royalties on Schedule E (Form 1040),

real estate activity, it will attach a statement

traded partnerships, earlier.

line 4.

identifying the income or loss from each

2. If income is reported in box 3, report

activity.

Box 8. Net Short-Term Capital

the income on Schedule E (Form 1040),

If you are filing a 2017 Form 1040, use

Gain (Loss)

line 28, column (g). However, if the box in

the following instructions to determine where

item D is checked, report the income

Report the net short-term capital gain (loss)

to report a box 2 amount.

following the rules for Publicly traded

on Schedule D (Form 1040), line 5.

partnerships, earlier.

1. If you have a loss from a passive

Box 9a. Net Long-Term Capital

activity in box 2 and you meet all the

Box 4. Guaranteed Payments

following conditions, report the loss on

Gain (Loss)

Schedule E (Form 1040), line 28, column (f).

Generally, amounts on this line are not

Report the net long-term capital gain (loss)

passive income, and you should report them

a. You actively participated in the

on Schedule D (Form 1040), line 12.

on Schedule E (Form 1040), line 28, column

partnership rental real estate activities. See

(j) (for example, guaranteed payments for

If you have any foreign source net

Special allowance for a rental real estate

personal services).

long-term capital gain (loss), see the

activity, earlier.

instructions for box 16, later.

b. Rental real estate activities with

Portfolio Income

CAUTION

active participation were your only passive

Box 9b. Collectibles (28%) Gain

Portfolio income or loss (shown in boxes 5

activities.

(Loss)

through 9b and in box 11, code A) isn't

c. You have no prior year unallowed

subject to the passive activity limitations.

losses from these activities.

Report collectibles gain or loss on line 4 of

Portfolio income includes income (not

the 28% Rate Gain Worksheet—Line 18 in

d. Your total loss from the rental real

derived in the ordinary course of a trade or

the Instructions for Schedule D (Form 1040).

estate activities wasn't more than $25,000

business) from interest, ordinary dividends,

(not more than $12,500 if married filing

annuities or royalties, and gain or loss on the

If you have any foreign source

separately and you lived apart from your

sale of property that produces such income

collectibles (28%) gain (loss), see

spouse all year).

or is held for investment.

the instructions for box 16, later.

CAUTION

e. If you are a married person filing

Box 5. Interest Income

Box 9c. Unrecaptured Section

separately, you lived apart from your spouse

Report interest income on line 8a of Form

all year.

1250 Gain

1040. If the amount of interest income

You have no current or prior year

There are three types of unrecaptured

included in box 5 includes interest from the

unallowed credits from a passive activity.

section 1250 gain. Report your share of this

credit for holders of clean renewable energy

g. Your modified adjusted gross income

unrecaptured gain on the Unrecaptured

bonds, the partnership will attach a

wasn't more than $100,000 (not more than

Section 1250 Gain Worksheet—Line 19 in

statement to Schedule K-1 showing your

$50,000 if married filing separately and you

the Instructions for Schedule D (Form 1040)

share of interest income from these credits.

lived apart from your spouse all year).

as follows.

Because the basis of your interest in the

Report unrecaptured section 1250 gain

partnership has been increased by your

h. Your interest in the rental real estate

from the sale or exchange of the

share of the interest income from these

activity wasn't held as a limited partner.

partnership's business assets on line 5.

credits, you must reduce your basis by the

2. If you have a loss from a passive

Report unrecaptured section 1250 gain

same amount. See line 4 of the

Worksheet

activity in box 2 and you do not meet all the

from the sale or exchange of an interest in a

for Adjusting the Basis of a Partner's Interest

conditions in (1) above, follow the

partnership on line 10.

in the

Partnership.

Instructions for Form 8582 to figure how

Report unrecaptured section 1250 gain

much of the loss you can report on

Box 6a. Ordinary Dividends

from an estate, trust, regulated investment

Schedule E (Form 1040), line 28, column (f).

company (RIC), or real estate investment

Report ordinary dividends on line 9a of Form

However, if the box in item D is checked,

trust (REIT) on line 11.

1040.

report the loss following the rules for Publicly

traded partnerships, earlier.

Box 6b. Qualified Dividends

If the partnership reports only

unrecaptured section 1250 gain from the

3. If you were a real estate professional

Report any qualified dividends on line 9b of

sale or exchange of its business assets, it

and you materially participated in the activity,

Form 1040.

will enter a dollar amount in box 9c. If it

report box 2 income (loss) on Schedule E

reports the other two types of unrecaptured

Qualified dividends are excluded

(Form 1040), line 28, column (h) or (j).

gain, it will provide an attached statement

from investment income, but you

TIP

4. If you have income from a passive

that shows the amount for each type of

may elect to include part or all of

activity in box 2, report the income on

unrecaptured section 1250 gain.

these amounts in investment income. See

Schedule E (Form 1040), line 28, column (g).

the instructions for line 4g of Form 4952,

However, if the box in item D is checked,

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

-7-

Instructions For Schedule K-1 (Form 1065) - Partner'S Share Of Income, Deductions, Credits, Etc. - 2017 Page 7

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