Looking for a Schedule K-1 Templates? Download it for free!

built-in gain property within the last 7 years

If you received the property in liquidation

from the disposition of all or part of your

and the partnership made a distribution of

of your interest, your basis in the distributed

partnership interest. For details, see Form

property to that partner other than the

property is equal to the adjusted basis of

8611.

previously contributed built-in gain property,

your partnership interest reduced by any

Code H. Recapture of investment credit.

the partner may be required to recognize

cash distributed in the same transaction.

The partnership will provide any information

gain under section 737. This gain is in

If you receive cash or property in

you need to figure your recapture tax on

addition to any gain recognized under

exchange for any part of a partnership

Form 4255, Recapture of Investment Credit.

section 731 on the distribution.

interest, the amount of the distribution

See the Form 3468 on which you took the

When this occurs, the partnership will

attributable to your share of the partnership's

original credit for other information you need

enter code B in box 19 of the contributing

unrealized receivable or inventory items

to complete Form 4255.

partner's Schedule K-1 and attach a

results in ordinary income (see Regulations

You may also need Form 4255 if you

statement that provides the information the

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

disposed of more than one-third of your

partner needs to figure the recognized gain

Partnership Interest, earlier).

interest in a partnership.

under section 737. The partnership is

required to provide the following information.

Code I. Recapture of other credits. On a

Box 20. Other Information

The fair market value (FMV) of the

statement attached to Schedule K-1, the

distributed property (other than money).

partnership will report any information you

Code A. Investment income. Report this

The amount of money received in the

need to figure the recapture of the new

amount on line 4a of Form 4952.

distribution.

markets credit (see Form 8874 and Form

The net precontribution gain of the

8874-B, Notice of Recapture Event for New

Code B. Investment expenses. Report

partner.

Markets Credit); Indian employment credit

this amount on line 5 of Form 4952.

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

Using the information from the attached

Code C. Fuel tax credit information. The

employer-provided childcare facilities and

statement, complete the worksheet below to

partnership will report the number of gallons

services (see Form 8882); alternative motor

figure your recognized gain under section

of each fuel sold or used during the tax year

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

737.

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

applicable credit per gallon. Use this

Computation of Section 737 Gain

qualified plug-in electric drive motor vehicles

information to complete Form 4136, Credit

credit (see section 30D(f)(5)).

1. Enter the FMV of the distributed

for Federal Tax Paid on Fuels.

property (other than

Code J. Look-back interest—completed

money)

. . . . . . . . . . .

Code D. Qualified rehabilitation expendi-

long-term contracts. The partnership will

2. Enter your adjusted basis in the

tures (other than rental real estate). The

report any information you need to figure the

partnership immediately before

partnership will report your share of qualified

interest due or to be refunded under the

the distribution. See

Basis

rehabilitation expenditures and other

look-back method of section 460(b)(2) on

Rules, earlier

. . . . . . . .

information you need to complete Form 3468

3. Enter the amount of money

certain long-term contracts. Use Form 8697,

for property not related to rental real estate

received in the distribution

Interest Computation Under the Look-Back

activities in box 20 using code D. Your share

4. Subtract line 3 from line 2. If zero

Method for Completed Long-Term

of qualified rehabilitation expenditures

or less, enter -0-

. . . . . . .

Contracts, to report any such interest.

related to rental real estate activities is

5. Subtract line 4 from line 1

. .

Code K. Look-back interest—income

reported in box 15 using code E. See the

forecast method. The partnership will

Instructions for Form 3468 for details. If the

6. Enter your net precontribution

report any information you need to figure the

gain

partnership is reporting expenditures from

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

interest due or to be refunded under the

more than one activity, the attached

7. Section 737 gain. Enter the

look-back method of section 167(g)(2) for

statement will separately identify the

lesser of the amount on line 5 or

certain property placed in service after

expenditures from each activity.

line 6

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

September 13, 1995, and depreciated under

Combine the expenditures (for Form

the income forecast method. Use Form

3468 reporting) from box 15, code E and

8866, Interest Computation Under the

The type of gain (section 1231 gain,

box 20, code D. The expenditures related to

Look-Back Method for Property Depreciated

capital gain) generated is determined by the

rental real estate activities (box 15, code E)

Under the Income Forecast Method, to

type of gain you would have recognized if

are reported on Schedule K-1 separately

report any such interest.

you sold the property rather than contributing

from other qualified rehabilitation

it to the partnership. Accordingly, report the

expenditures (box 20, code D) because they

Code L. Dispositions of property with

amount from line 7, above, on Form 4797 or

are subject to different passive activity

section 179 deductions. The partnership

Form 8949 and the Schedule D of your tax

limitation rules. See the Instructions for Form

will report your share of gain or loss on the

return.

8582-CR for details.

sale, exchange, or other disposition of

property for which a section 179 expense

Code C. Other property. Code C shows

Code E. Basis of energy property. If the

deduction was passed through to partners

the partnership's adjusted basis of property

partnership provides an attached statement

with code L. If the partnership passed

other than money immediately before the

for code E, use the information on the

through a section 179 expense deduction for

property was distributed to you. In addition,

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

the property, you must report the gain or loss

the partnership should report the adjusted

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

and any recapture of the section 179

basis and FMV of each property distributed.

3468.

expense deduction for the property on your

Decrease the adjusted basis of your interest

Codes F and G. Recapture of low-income

income tax return (see the Instructions for

in the partnership by the amount of your

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

Form 4797 for details). The partnership will

basis in the distributed property. Your basis

partnership will report recapture of a

provide all the following information.

in the distributed property (other than in

low-income housing credit with code F. All

liquidation of your interest) is the smaller of:

1. Description of the property.

other partnerships will report recapture of a

The partnership's adjusted basis

2. Date the property was acquired and

low-income housing credit with code G.

immediately before the distribution, or

placed in service.

Keep a separate record of recapture from

The adjusted basis of your partnership

each of these sources so that you will be

3. Date of the sale or other disposition of

interest reduced by any cash distributed in

able to correctly figure any recapture of

the property.

the same transaction.

low-income housing credit that may result

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

-14-

Partner'S Instructions For Schedule K-1 (Form 1065) - Partner'S Share Of Income, Deductions, Credits, Etc. (For Partner'S Use Only) - 2016 Page 14

Related Articles

Related forms

Related Categories