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If the partnership provides you with

property, the amount of interest you are

(Form 1040), line 23. See the instructions for

information that the contribution was

allowed to deduct may be limited.

Schedule A (Form 1040), lines 23 and 28, for

property other than cash and doesn't give

details.

For more information on the special

you a Form 8283, see the Instructions for

provisions that apply to investment interest

These deductions are not taken into

Form 8283 for filing requirements. Do not file

expense, see Form 4952 and Pub. 550,

account in figuring your passive activity loss

Form 8283 unless the total claimed

Investment Income and Expenses.

for the year. Do not enter them on Form

deduction for all contributed items of

8582.

Code I. Deductions—royalty income.

property exceeds $500.

Include deductions allocable to royalties on

Code L. Deductions—portfolio (other).

Food inventory contributions. The

Schedule E (Form 1040), line 19. For this

Generally, you should report these amounts

partnership will report on an attached

type of expense, enter “From Schedule K-1

on Schedule A (Form 1040), line 28. See the

statement your share of qualified food

(Form 1065).”

instructions for Schedule A, lines 23 and 28,

inventory contributions. The food inventory

for details. These deductions are not taken

These deductions are not taken into

contribution isn't included in the amount

into account in figuring your passive activity

account in figuring your passive activity loss

reported in box 13 using code C. The

loss for the year. Do not enter them on Form

for the year. Do not enter them on Form

partnership will also report your share of the

8582.

partnership's net income from the business

Code M. Amounts paid for medical insur-

activities that made the food inventory

Code J. Section 59(e)(2) expenditures.

ance. Any amounts paid during the tax year

contribution(s). Your deduction for food

On an attached statement, the partnership

for insurance that constitutes medical care

inventory contributions cannot exceed 15%

will show the type and the amount of

for you, your spouse, your dependents, and

of your aggregate net income for the tax year

qualified expenditures for which you may

your children under age 27 who are not

from the business activities from which the

make a section 59(e) election. The

dependents. On line 29 of Form 1040, you

food inventory contribution was made

statement will also identify the property for

may be allowed to deduct such amounts,

(including your share of net income from

which the expenditures were paid or

even if you do not itemize deductions. If you

partnership or S corporation businesses that

incurred. If there is more than one type of

do itemize deductions, enter on line 1 of

made food inventory contributions). Amounts

expenditure, the amount of each type will

Schedule A (Form 1040) any amounts not

that exceed the 15% limitation may be

also be listed.

deducted on line 29 of Form 1040.

carried over for up to 5 years. Report the

If you deduct these expenditures in full in

deduction, subject to the 50% AGI limitation,

Code N. Educational assistance benefits.

the current year, they are treated as

on line 17 of Schedule A (Form 1040).

Deduct your educational assistance benefits

adjustments or tax preference items for

on a separate line of Schedule E (Form

purposes of alternative minimum tax.

Code D. Noncash contributions (30%).

1040), line 28, up to the $5,250 limitation. If

However, you may elect to amortize these

Report this amount, subject to the 30% AGI

your benefits exceed $5,250, you may be

expenditures over the number of years in the

limitation, on line 17 of Schedule A (Form

able to use the excess amount on Form 8863

applicable period rather than deduct the full

1040).

to figure the education credits.

amount in the current year. If you make this

Code E. Capital gain property to a 50%

election, these items are not treated as

Code O. Dependent care benefits. The

organization (30%). Report this amount,

adjustments or tax preference items.

partnership will report the dependent care

subject to the 30% AGI limitation, on line 17

Under the election, you can deduct

benefits you received. You must use Form

of Schedule A (Form 1040). See Special

circulation expenditures ratably over a 3-year

2441, Part III, to figure the amount, if any, of

30% Limit for Capital Gain Property in Pub.

period. Research and experimental

the benefits you may exclude from your

526.

expenditures and mining exploration and

income.

Code F. Capital gain property (20%).

development costs can be amortized over a

Code P. Preproductive period expenses.

Report this amount, subject to the 20% AGI

10-year period. Intangible drilling and

You may be able to deduct these expenses

limitation, on line 17 of Schedule A (Form

development costs can be amortized over a

currently or you may need to capitalize them

1040).

60-month period. The amortization period

under section 263A. See Pub. 225, Farmer's

begins with the month in which such costs

Code G. Contributions (100%). The

Tax Guide, and Regulations section

were paid or incurred.

partnership will report your share of qualified

1.263A-4 for details.

Make the election on Form 4562. If you

conservation contributions of property used

Code Q. Commercial revitalization de-

make the election, report the current year

in agriculture or livestock production. This

duction from rental real estate activities.

amortization of section 59(e) expenditures

contribution isn't included in the amount

Follow the Instructions for Form 8582 to

from Part VI of Form 4562 on line 28 of

reported in box 13 using code C. If you are a

figure how much of the deduction can be

Schedule E (Form 1040). If you do not make

farmer or rancher, you qualify for a 100%

reported on Schedule E (Form 1040),

the election, report the section 59(e)(2)

AGI limitation for this contribution. Otherwise,

line 28, column (f).

expenditures on line 28 of Schedule E (Form

your deduction for this contribution is subject

1040) and figure the resulting adjustment or

to a 50% AGI limitation. Report this

Code R. Pensions and IRAs. Payments

tax preference item (see Form 6251,

deduction on line 17 of Schedule A (Form

made on your behalf to an IRA, qualified

Alternative Minimum Tax—Individuals).

1040). See Pub. 526 for more information on

plan, simplified employee pension (SEP), or

Whether you deduct the expenditures or

qualified conservation contributions.

a SIMPLE IRA plan. See the Form 1040

elect to amortize them, report the amount on

instructions for line 32 to figure your IRA

Code H. Investment interest expense.

a separate line in column (h) of line 28 if you

deduction. Enter payments made to a

Include this amount on Form 4952, line 1. If

materially participated in the partnership

qualified plan, SEP, or SIMPLE IRA plan on

the partnership has investment income or

activity. If you didn't materially participate,

Form 1040, line 28. If the payments to a

other investment expense, it will report your

follow the Instructions for Form 8582 to figure

qualified plan were to a defined benefit plan,

share of these items in box 20 using codes A

how much of the deduction can be reported

the partnership should give you a statement

and B. Include investment income and

in column (f).

showing the amount of the benefit accrued

expenses from other sources to figure how

for the current tax year.

Code K. Deductions—portfolio (2%

much of your total investment interest is

floor). Amounts entered with code K are

deductible. You will also need this

Code S. Reforestation expense deduc-

deductions that are clearly and directly

information to figure your investment interest

tion. The partnership will provide a

allocable to portfolio income (other than

expense deduction.

statement that describes the qualified timber

investment interest expense and section 212

property for these reforestation expenses.

If the partnership paid or accrued interest

expenses from a REMIC). Generally, you

The expense deduction is limited to $10,000

on debts properly allocable to investment

should report these amounts on Schedule A

($5,000 if married filing separately) for each

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) - 2016 Page 10

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