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estate, follow the Instructions for Form 8960

included inversion gain in income elsewhere

security retirement or disability benefits, and

to figure and report your net investment

on Schedule K-1. Inversion gain is also

are partners in farm partnerships that receive

income and adjusted gross income or

reported under code Z because your taxable

conservation reserve program payments, do

modified adjusted gross income. Corporate

income and alternative minimum taxable

not pay self-employment tax on their portion

partners are not subject to the net investment

income cannot be less than the inversion

of the payments. The partnership will report

income tax. See Regulations sections

gain. Also, your inversion gain (a) isn't taken

your portion of the conservation reserve

1.1411-1 through -10 for details.

into account in figuring the net operating loss

program payments in box 20 using code Z.

(NOL) for the tax year or the NOL that can be

See Schedule SE (Form 1040) for

Code Z. Other information. The

carried over to each tax year, (b) may limit

information on excluding the payment from

partnership will report the following:

your credits, and (c) is treated as income

your calculation of self-employment tax.

1. Any information a publicly traded

from sources within the United States for the

10. Acceleration of AMT credit

partnership needs to determine whether it

foreign tax credit. See section 7874 for

(corporations only). If a corporate partner

meets the 90% qualifying income test of

details.

has made an election to accelerate the AMT

section 7704(c)(2).

5. Qualifying advanced coal project

credit in lieu of bonus depreciation, it is

property. Use the amounts the partnership

required to notify the partnership in writing of

A partner is required to notify the

partnership of its status as a publicly

provides you to figure the amounts to report

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

TIP

on Form 3468, lines 5a through 5c.

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

traded partnership.

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

6. Qualifying gasification project

2. Any information you need to

about the written notification that the electing

property. Use the amounts the partnership

complete a disclosure statement for

corporate partner must provide the

provides you to figure the amounts to report

reportable transactions in which the

partnership. The partnership is required to

on Form 3468, lines 6a and 6b.

partnership participates. If the partnership

refigure the electing corporate partner's

7. Qualifying advanced energy project

participates in a transaction that must be

share of depreciation on any eligible

property. Use the amount the partnership

disclosed on Form 8886, Reportable

qualified property or extension property to

provides you to figure the amount to report

Transaction Disclosure Statement, both you

eliminate bonus depreciation and use the

on Form 3468, line 7.

and the partnership may be required to file

straight line depreciation method for such

Form 8886 for the transaction. The

8. The information needed to complete

property. The partnership will attach a

determination of whether you are required to

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

statement to Schedule K-1 that lists each

disclose a transaction of the partnership is

Partner Interests in Partnerships. When

partnership item that includes bonus

based on the category(s) under which the

required, the partnership will make this report

depreciation and shows the electing

transaction qualifies for disclosure and is

on an attached statement to partners that are

corporate partner's adjustment for each item

determined by you and the partnership. You

a corporation (identified as a foreign partner

that results from the refigured depreciation

may have to pay a penalty if you are required

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

and elimination of the bonus depreciation.

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

partners that are a partnership (domestic or

The partner must adjust the amount shown

Instructions for Form 8886 for details.

foreign) if the reporting partnership knows, or

on Schedule K-1 for these partnership items

has reason to know, that one or more of the

by the amount of the corresponding

3. Interest and additional tax on

partners is a foreign corporation. If the

adjustment. See section 168(k)(4) for more

compensation deferred under a section

partnership allocates effectively connected

information.

409A nonqualified deferred compensation

income to the partner, the statement will

plan that doesn't meet the requirements of

11. Any information you may need to

contain the information needed to complete

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

comply with the limitation on excess farm

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

figure the interest and additional tax on this

losses of certain taxpayers under section

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

income. Report this interest and tax on

461(j).

partnership doesn't allocate effectively

line 62 of Form 1040. This income is

12. Any other information you may need

connected income to the partner, the

included in the amount in box 4, Guaranteed

to file your return not shown elsewhere on

statement will contain the information

Payments.

Schedule K-1.

needed to complete lines 13, 14, and 18 of

4. Inversion gain. The partnership will

Schedule P (Form 1120-F).

The partnership should give you a

provide a statement showing the amounts of

description and the amount of your share for

9. Conservation reserve program

each type of income or gain that is included

each of these items.

payments. Individuals who received social

in inversion gain. The partnership has

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) - 2016 Page 16

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