Shareholder'S Instructions For Schedule K-1 (Form 1120s)

If you didn't materially participate in

report in column (f). Material

In general, shareholders

the activity, use Form 8582 to figure

participation is defined earlier under

whose only sources for a

TIP

the amount to report on Schedule E

Passive Activity

Limitations. If the

credit listed on Form 3800,

(Form 1040), line 28, column (f). If you

proceeds were used in an investment

General Business Credit, Part III, are

materially participated in the

activity, report the interest on Form

partnerships, S corporations, estates,

reforestation activity, report the

4952. If the proceeds are used for

trusts, and cooperatives, aren't

deduction on Schedule E (Form

personal purposes, the interest is

required to complete the applicable

1040), line 28, column (h).

generally not deductible.

credit form or attach it to their return.

Contributions to a capital

Code P. Domestic production ac-

Instead, they can report the credit

construction fund (CCF). The

tivities information. The corporation

amounts reported to them by these

deduction for a CCF investment isn't

will provide you with a statement with

pass-through entities directly on Form

taken on Schedule E (Form 1040).

information that you must use to figure

3800, Part III, and enter the EIN of the

Instead, you subtract the deduction

the domestic production activities

entity in column (b) of Part III.

from the amount that would normally

deduction. Use Form 8903, Domestic

However, when applicable, all

be entered as taxable income on

Production Activities Deduction, to

shareholders must complete and

Form 1040, line 43. In the margin to

figure this deduction. For details, see

attach the following credit forms to

the left of line 43, enter "CCF" and the

the Instructions for Form 8903.

their return.

amount of the deduction.

Code Q. Qualified production ac-

Form 3468, Investment Credit

Penalty on early withdrawal of

tivities income (QPAI). Report the

(Form 3800, Part III, line 1a).

savings. Report this amount on Form

QPAI reported to you by the

Form 8864, Biodiesel and

1040, line 30.

corporation (in box 12 of

Renewable Diesel Fuels Credit (Form

Film, television, and live theatrical

Schedule K-1) in the applicable

3800, Part III, line 1l).

production expenses. The corporation

column of Form 8903, line 7.

will provide a statement that describes

See the Instructions for Form 3800 for

the film, television, or live theatrical

Code R. Employer's Form W-2 wa-

more details.

production generating these

ges. Report the portion of Form W-2

expenses. Generally, if the aggregate

Codes A, B, C, and D. Low-income

wages reported to you by the

cost of the production exceeds $15

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

corporation (in box 12 of

million, you aren't entitled to the

applies, the corporation will report

Schedule K-1) on Form 8903, line 17.

deduction. The limitation is $20 million

your share of the low-income housing

Code S. Other deductions.

for productions in certain areas (see

credit using code A or code C,

Amounts with this code may include

section 181 for details). If you didn't

depending on the date the building

the following.

materially participate in the activity,

was placed in service. If section 42(j)

Itemized deductions that Form

use Form 8582 to determine the

(5) doesn't apply, your share of the

1040 filers report on Schedule A

amount that can be reported on

credit will be reported using code B or

(Form 1040).

Schedule E (Form 1040), line 28,

code D, depending on the date the

Soil and water conservation

column (f). If you materially

building was placed in service. Any

expenditures and endangered

participated in the production activity,

allowable low-income housing credit

species recovery expenditures. See

report the deduction on Schedule E

reported using code A or code B is

section 175 for limitations on the

(Form 1040), line 28, column (h).

reported on line 4 of Form 8586,

amount you are allowed to deduct.

Current year section 108(i) original

Low-Income Housing Credit, or Form

Expenditures for the removal of

issue discount (OID) deduction. The

3800, Part III, line 1d (see TIP,

architectural and transportation

corporation will provide your share of

earlier). Any allowable low-income

barriers to the elderly and disabled

the corporation's OID deduction

housing credit reported using code C

that the corporation elected to treat as

deferred under section 108(i)(2)(A)(i)

or code D is reported on line 11 of

a current expense. The deductions

that is allowable as a deduction in the

Form 8586 or Form 3800, Part III,

are limited by section 190(c) to

current tax year under section 108(i)

line 4d (see TIP, earlier).

$15,000 per year from all sources.

(2)(A)(ii) or section 108(i)(5)(D)(i) or

Keep a separate record of the

Interest expense allocated to

(ii).

low-income housing credit from each

debt-financed distributions. The

The corporation will give you a

separate source so that you can

manner in which you report such

description and the amount of your

correctly figure any recapture of

interest expense depends on your use

share for each of these items.

low-income housing credit that may

of the distributed debt proceeds. If the

result from the disposition of all or part

proceeds were used in a trade or

Box 13. Credits

of your stock in the corporation. For

business activity, report the interest

If you have credits that are passive

more information on recapture, see

on Schedule E (Form 1040), line 28.

activity credits to you, you must

the instructions for Form 8611,

In column (a) enter the name of the

complete Form 8582-CR in addition to

Recapture of Low-Income Housing

corporation and “interest expense.” If

the credit forms identified below. See

Credit.

you materially participated in the trade

Passive Activity

Limitations, earlier,

or business activity, enter the interest

Code E. Qualified rehabilitation ex-

and the Instructions for Form

expense in column (h). If you didn't

penditures (rental real estate). The

8582-CR for details.

materially participate in the activity,

corporation will report your share of

follow the Instructions for Form 8582

the qualified rehabilitation

to figure the interest expense you can

expenditures and other information

Instructions for Schedule K-1 (Form 1120S) (2016)

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Shareholder'S Instructions For Schedule K-1 (Form 1120s) - 2016 Page 11

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