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gain. Also, your inversion gain (a) is not

conservation reserve program payments, do

Code Z. Other information. The

taken into account in figuring the net

not pay self-employment tax on their portion

partnership will report:

operating loss (NOL) for the tax year or the

of the payments. The partnership will report

1. Any information a publicly traded

NOL that can be carried over to each tax

your portion of the conservation reserve

partnership needs to determine whether it

year, (b) may limit your credits, and (c) is

program payments in box 20 using code Z.

meets the 90% qualifying income test of

treated as income from sources within the

See Schedule SE (Form 1040) for

section 7704(c)(2).

U.S. for the foreign tax credit. See section

information on excluding the payment from

7874 for details.

your calculation of self-employment tax.

Note. A partner is required to notify the

5. Qualifying advanced coal project

10. Acceleration of AMT credit

partnership of its status as a publicly traded

property. Use the amounts the partnership

(corporations only). If a corporate partner

partnership.

provides you to figure the amounts to report

has made an election to accelerate the AMT

2. Any information you need to

on Form 3468, lines 5a through 5c.

credit in lieu of bonus depreciation, it is

complete a disclosure statement for

required to notify the partnership in writing of

6. Qualifying gasification project

reportable transactions in which the

this election. See Rev. Proc. 2009-16,

property. Use the amounts the partnership

partnership participates. If the partnership

2009-6 I.R.B. 449 and Rev. Proc. 2009-33,

provides you to figure the amounts to report

participates in a transaction that must be

2009-29 I.R.B. 150 for more information

on Form 3468, lines 6a and 6b.

disclosed on Form 8886, Reportable

about the written notification that the electing

Transaction Disclosure Statement, both you

7. Qualifying advanced energy project

corporate partner must provide the

and the partnership may be required to file

property. Use the amount the partnership

partnership. The partnership is required to

Form 8886 for the transaction. The

provides you to figure the amount to report

recompute the electing corporate partner's

determination of whether you are required to

on Form 3468, line 7.

share of depreciation on any eligible

disclose a transaction of the partnership is

8. The information needed to complete

qualified property or extension property to

based on the category(s) under which the

Schedule P (Form 1120-F), List of Foreign

eliminate bonus depreciation and use the

transaction qualifies for disclosure and is

Partner Interests in Partnerships. When

straight line depreciation method for such

determined by you and the partnership. You

required, the partnership will make this report

property. The partnership will attach a

may have to pay a penalty if you are required

on an attached statement to partners that are

statement to Schedule K-1 that lists each

to file Form 8886 and do not do so. See the

a corporation (identified as a foreign partner

partnership item that includes bonus

Instructions for Form 8886 for details.

under Regulations section 1.1446-1(c)(3)) or

depreciation and shows the electing

3. Interest and additional tax on

partners that are a partnership (domestic or

corporate partner's adjustment for each item

compensation deferred under a section

foreign) if the reporting partnership knows, or

that results from the recomputed

409A nonqualified deferred compensation

has reason to know, that one or more of the

depreciation and elimination of the bonus

plan that does not meet the requirements of

partners is a foreign corporation. If the

depreciation. The partner must adjust the

section 409A. See section 409A(a)(1)(B) to

partnership allocates effectively connected

amount shown on Schedule K-1 for these

figure the interest and additional tax on this

income to the partner, the statement will

partnership items by the amount of the

income. Report this interest and tax on

contain the information needed to complete

corresponding adjustment. See section

line 62 of Form 1040. This income is

lines 1 through 10, 13, 14, 15b, 17a, 17b,

168(k)(4) for more information.

included in the amount in box 4, Guaranteed

and 18 of Schedule P (Form 1120-F). If the

11. Any information you may need to

Payments.

partnership does not allocate effectively

comply with the limitation on excess farm

connected income to the partner, the

4. Inversion gain. The partnership will

losses of certain taxpayers under section

statement will contain the information

provide a statement showing the amounts of

461(j).

needed to complete lines 13, 14, and 18 of

each type of income or gain that is included

12. Any other information you may need

Schedule P (Form 1120-F).

in inversion gain. The partnership has

to file your return not shown elsewhere on

included inversion gain in income elsewhere

9. Conservation reserve program

Schedule K-1.

on Schedule K-1. Inversion gain is also

payments. Individuals who received social

The partnership should give you a

reported under code Z because your taxable

security retirement or disability benefits, and

description and the amount of your share for

income and alternative minimum taxable

are partners in farm partnerships that receive

each of these items.

income cannot be less than the inversion

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

-16-

Partner'S Instructions For Schedule K-1 (Form 1065) - Partner'S Share Of Income, Deductions, Credits, Etc. (For Partner'S Use Only) - 2014 Page 16

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