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of its Form 5713. You must file your own

Worksheet for Adjusting the Basis of a

Form 5713 to report the partnership's

activities and any other boycott operations

Keep for Your Records

Partner's Interest in the Partnership

that you may have. You may lose certain tax

1. Your adjusted basis at the end of the prior year. Do not enter less than zero.

benefits if the partnership participated in, or

Enter -0- if this is your first tax year

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

cooperated with, an international boycott.

Increases:

See Form 5713 and its instructions for more

information.

2. Money and your adjusted basis in property contributed to the partnership less

the associated liabilities (but not less than zero) . . . . . . . . . . . . . . . . . . . .

Definitions

3. Your increased share of or assumption of partnership liabilities. (Subtract your

share of liabilities shown in item K of your 2013 Schedule K-1 from your share of

liabilities shown in item K of your 2014 Schedule K-1 and add the amount of any

General Partner

partnership liabilities you assumed during the tax year (but not less than

zero)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A general partner is a partner who is

4. Your share of the partnership's income or gain (including tax-exempt income)

personally liable for partnership debts.

reduced by any amount included in interest income with respect to the credit to

holders of clean renewable energy bonds

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

Limited Partner

5. Any gain recognized this year on contributions of property. Do not include gain

from transfer of liabilities

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

A limited partner is a partner in a partnership

6. Your share of the excess of the deductions for depletion (other than oil and gas

formed under a state limited partnership law,

depletion) over the basis of the property subject to depletion . . . . . . . . . . . .

whose personal liability for partnership debts

Decreases:

is limited to the amount of money or other

property that the partner contributed or is

7. Withdrawals and distributions of money and the adjusted basis of property

distributed to you from the partnership. Do not include the amount of property

required to contribute to the partnership.

distributions included in the partner's income (taxable income)

. . . . . . . . . .

Some members of other entities, such as

Caution: A distribution may be taxable if the amount exceeds your adjusted

domestic or foreign business trusts or limited

basis of your partnership interest immediately before the distribution.

liability companies that are classified as

8. Your decreased share of partnership liabilities and any decrease in your

partnerships, may be treated as limited

individual liabilities because they were assumed by the partnership. (Subtract

your share of liabilities shown in item K of your 2014 Schedule K-1 from your

partners for certain purposes.

share of liabilities shown in item K of your 2013 Schedule K-1 and add the

amount of your individual liabilities that the partnership assumed during the tax

Nonrecourse Loans

year (but not less than zero))

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

Nonrecourse loans are those liabilities of the

9. Your share of the partnership's nondeductible expenses that are not capital

expenditures

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

partnership for which no partner or related

10. Your share of the partnership's losses and deductions (including capital losses).

person bears the economic risk of loss.

However, include your share of the partnership's section 179 expense deduction

for this year even if you cannot deduct all of it because of limitations . . . . . . .

10.

Elections

11. The amount of your deduction for depletion of any partnership oil and gas

property, not to exceed your allocable share of the adjusted basis of that

Generally, the partnership decides how to

property

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

11.

figure taxable income from its operations.

12. Your adjusted basis in the partnership at the end of this tax year. (Add lines 1

However, certain elections are made by you

through 6 and subtract lines 7 through 11 from the total. If zero or less,

enter -0-.)

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

12.

separately on your income tax return and not

by the partnership. These elections are

Caution: The deduction for your share of the partnership's losses and

deductions is limited to your adjusted basis in your partnership interest. If you

made under the following code sections.

entered zero on line 12 and the amount figured for line 12 was less than zero, a

portion of your share of the partnership losses and deductions may not be

Section 59(e) (deduction of certain

deductible. (See

Basis

Rules, earlier, for more information.)

qualified expenditures ratably over the period

of time specified in that section). For details,

see the instructions for code J in box 13.

activity limitations. These limitations are

increase your basis and then subtracting

Section 108(b)(5) (election related to

discussed below.

items that decrease your basis.

reduction of tax attributes due to exclusion

Other limitations may apply to specific

from gross income of discharge of

Use the worksheet above to figure the

indebtedness).

deductions (for example, the section 179

basis of your interest in the partnership.

expense deduction). Generally, specific

Section 263A(d) (preproductive

limitations apply before the basis, at-risk,

expenses). See the instructions for code P in

For more details on the basis rules, see

and passive loss limitations.

box 13.

Pub. 541, Partnerships.

Section 617 (deduction and recapture of

Basis Rules

At-Risk Limitations

certain mining exploration expenditures).

Generally, you may not claim your share of a

Generally, if you have (a) a loss or other

Section 901 (foreign tax credit).

partnership loss (including a capital loss) to

deduction from any activity carried on as a

Additional Information

the extent that it is greater than the adjusted

trade or business or for the production of

basis of your partnership interest at the end

income by the partnership and (b) amounts

For more information on the treatment of

of the partnership's tax year. Any losses and

in the activity for which you are not at risk,

partnership income, deductions, credits, etc.,

deductions not allowed this year because of

you will have to complete Form 6198,

see Pub. 535, Business Expenses.

the basis limit can be carried forward

At-Risk Limitations, to figure your allowable

indefinitely and deducted in a later year

loss.

To get forms and publications, see the

subject to the basis limit for that year.

instructions for your tax return or visit the IRS

The at-risk rules generally limit the

website at IRS.gov.

The partnership is not responsible for

amount of loss and other deductions that you

keeping the information needed to figure the

can claim to the amount you could actually

Limitations on Losses,

basis of your partnership interest. Although

lose in the activity. These losses and

the partnership does provide an analysis of

Deductions, and Credits

deductions include a loss on the disposition

the changes to your capital account in item L

of assets and the section 179 expense

There are potential limitations on partnership

of Schedule K-1, that information is based on

deduction. However, if you acquired your

losses that you can deduct on your return.

the partnership's books and records and

partnership interest before 1987, the at-risk

These limitations and the order in which you

cannot be used to figure your basis.

rules do not apply to losses from an activity

must apply them are as follows: the basis

You can figure the adjusted basis of your

of holding real property placed in service

rules, the at-risk limitations, and the passive

partnership interest by adding items that

before 1987 by the partnership. The activity

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

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Partner'S Instructions For Schedule K-1 (Form 1065) - Partner'S Share Of Income, Deductions, Credits, Etc. (For Partner'S Use Only) - 2014 Page 2

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