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

b. If a loss is reported in box 1,

3. If you were a real estate

If you have any foreign source

follow the Instructions for Form 8582

professional and you materially

qualified dividends, see the

to figure how much of the loss can be

participated in the activity, report

instructions for box 14, later.

reported on Schedule E (Form 1040),

box 2 income (loss) on Schedule E

CAUTION

line 28, column (f).

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

Box 6. Royalties

4. If you have income from a

Box 2. Net Rental Real Estate

Report royalties on Schedule E (Form

passive activity in box 2, report the

1040), line 4.

Income (Loss)

income on Schedule E (Form 1040),

Generally, the income (loss) reported

Box 7. Net Short-Term Capital

line 28, column (g).

in box 2 is a passive activity amount

Gain (Loss)

Box 3. Other Net Rental Income

for all shareholders. However, the

Report the net short-term capital gain

(Loss)

income (loss) in box 2 isn't from a

(loss) on Schedule D (Form 1040),

passive activity if you were a real

The amount in box 3 is a passive

line 5.

estate professional (defined earlier)

activity amount for all shareholders. If

and you materially participated in the

Box 8a. Net Long-Term Capital

the corporation had more than one

activity. If the corporation had more

Gain (Loss)

rental activity, it will attach a statement

than one rental real estate activity, it

identifying the income or loss from

Report the net long-term capital gain

will attach a statement identifying the

each activity. Report the income or

(loss) on Schedule D (Form 1040),

income or loss from each activity.

loss as follows.

line 12.

If you are filing a 2016 Form 1040,

1. If box 3 is a loss, follow the

If you have any foreign source

use the following instructions to

Instructions for Form 8582 to figure

net long-term capital gain

determine where to report a box 2

how much of the loss can be reported

(loss), see the instructions for

amount.

on Schedule E (Form 1040), line 28,

CAUTION

box 14, later.

column (f).

1. If you have a loss from a

passive activity in box 2 and you meet

2. If income is reported in box 3,

Box 8b. Collectibles (28%) Gain

all the following conditions, report the

report the income on Schedule E

(Loss)

loss on Schedule E (Form 1040),

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

Report collectibles gain or loss on

line 28, column (f).

Portfolio Income

line 4 of the 28% Rate Gain

a. You actively participated in the

Worksheet—Line 18 in the

Portfolio income or loss (shown in

corporate rental real estate activities.

Instructions for Schedule D (Form

boxes 4 through 8b and in box 10,

See

Special allowance for a rental real

1040).

code A) isn't subject to the passive

estate

activity, earlier.

activity limitations. Portfolio income

Box 8c. Unrecaptured Section

b. Rental real estate activities with

includes income (not derived in the

1250 Gain

active participation were your only

ordinary course of a trade or

passive activities.

There are three types of unrecaptured

business) from interest, ordinary

section 1250 gain. Report your share

c. You have no prior year

dividends, annuities, or royalties, and

of this unrecaptured gain on the

unallowed losses from these

gain or loss on the sale of property

Unrecaptured Section 1250 Gain

activities.

that produces such income or is held

Worksheet—Line 19 in the

for investment.

d. Your total loss from the rental

Instructions for Schedule D (Form

real estate activities wasn't more than

Box 4. Interest Income

1040) as follows.

$25,000 (not more than $12,500 if

Report unrecaptured section 1250

Report interest income on Form 1040,

married filing separately and you lived

gain from the sale or exchange of the

line 8a.

apart from your spouse all year).

corporation's business assets on

Box 5a. Ordinary Dividends

e. If you are a married person filing

line 5.

separately, you lived apart from your

Report ordinary dividends on Form

Report unrecaptured section 1250

spouse all year.

1040, line 9a.

gain from the sale or exchange of an

f. You have no current or prior

interest in a partnership on line 10.

Box 5b. Qualified Dividends

year unallowed credits from a passive

Report unrecaptured section 1250

Report any qualified dividends on

activity.

gain from an estate, trust, regulated

Form 1040, line 9b.

investment company (RIC), or real

g. Your modified adjusted gross

estate investment trust (REIT) on

Qualified dividends are

income wasn't more than $100,000

line 11.

excluded from investment

(not more than $50,000 if married

TIP

income, but you may elect to

filing separately and you lived apart

If the corporation reports only

include part or all of these amounts in

from your spouse all year).

unrecaptured section 1250 gain from

investment income. See the

2. If you have a loss from a

the sale or exchange of its business

instructions for line 4g of Form 4952,

passive activity in box 2 and you don't

assets, it will enter a dollar amount in

Investment Interest Expense

meet all the conditions in (1) above,

box 8c. If it reports the other two types

Deduction, for important information

follow the Instructions for Form 8582

of unrecaptured gain, it will provide an

on making this election.

to figure how much of the loss you can

attached statement that shows the

report on Schedule E (Form 1040),

amount for each type of unrecaptured

line 28, column (f).

section 1250 gain.

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

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Shareholder'S Instructions For Schedule K-1 (Form 1120s) - 2016 Page 7

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