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8. Any information you need to figure

18. Nonqualified withdrawals by the

24. Extraterritorial income exclusion:

the interest due under section 453(l)(3)

partnership from a CCF. These

a. Partnership did not claim the

with respect to the disposition of certain

withdrawals are taxed separately from

exclusion. If the partnership reports your

timeshares and residential lots on the

your other gross income at the highest

distributive share of foreign trading gross

installment method. If you are an

marginal ordinary income or capital gain

receipts and the extraterritorial income

individual, report the interest on Form

tax rate. Attach a statement to your

exclusion, the partnership was not entitled

1040, line 61. Write “453(l)(3)” and the

Federal income tax return to show your

to claim the exclusion because it did not

amount of the interest on the dotted line

computation of both the tax and interest

meet the foreign economic process

to the left of line 61.

for a nonqualified withdrawal. Include the

requirements. You may qualify for your

9. Any information you need to figure

tax and interest on Form 1040, line 61. To

distributive share of this exclusion

the interest due under section 453A(c)

the left of line 61, write the amount of tax

because the partnership’s foreign trading

with respect to certain installment sales. If

and interest and ‘‘CCF.’’

gross receipts for the tax year were $5

you are an individual, report the interest

19. Unrecaptured section 1250 gain.

million or less. To qualify for this

on Form 1040, line 61. Write “453A(c)”

Generally, report this amount on line 5 of

exclusion, your foreign trading gross

and the amount of the interest on the

the Unrecaptured Section 1250 Gain

receipts from all sources for the tax year

dotted line to the left of line 61.

Worksheet in the Schedule D (Form

also must have been $5 million or less.

10. Any information you need to figure

1040) instructions. However, for an

See Form 8873, Extraterritorial Income

the interest due or to be refunded under

amount passed through from an estate,

Exclusion, for more information. If you

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

trust, real estate investment trust, or

qualify for the exclusion, report the

on certain long-term contracts. Use Form

regulated investment company, report it

exclusion amount in accordance with the

8697, Interest Computation Under the

on line 11 of that worksheet. Report on

instructions on page 6 for line 1, 2, or 3,

Look-Back Method for Completed

line 10 of that worksheet any gain from

whichever applies.

Long-Term Contracts, to report any such

the partnership’s sale or exchange of an

b. Partnership claimed the exclusion.

interest.

interest in another partnership that is

If the partnership reports your distributive

11. Any information you need relating

attributable to unrecaptured section 1250

share of foreign trading gross receipts but

to interest expense that you are required

gain.

not the amount of the extraterritorial

to capitalize under section 263A for

20. Any information you need to figure

income exclusion, the partnership met the

production expenditures. See Regulations

the interest due or to be refunded under

foreign economic process requirements

sections 1.263A-8 through 1.263A-15 for

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

and claimed the exclusion when figuring

more information.

for certain property placed in service after

your distributive share of partnership

12. Any information you need to figure

September 13, 1995, and depreciated

income. You also may need to know the

unrelated business taxable income under

under the income forecast method. Use

amount of your distributive share of

section 512(a)(1) (but excluding any

Form 8866, Interest Computation Under

foreign trading gross receipts from this

modifications required by paragraphs (8)

the Look-Back Method for Property

partnership to determine if you met the $5

through (15) of section 512(b)) for a

Depreciated Under the Income Forecast

million or less exception discussed above

partner that is a tax-exempt organization.

Method, to report any such interest.

for purposes of qualifying for an

21. Any information a publicly traded

Reminder: A partner is required to notify

extraterritorial income exclusion from

partnership needs to determine whether it

the partnership of its tax-exempt status.

other sources.

meets the 90% qualifying income test of

13. Your share of expenditures

Note: Upon request, the partnership

section 7704(c)(2).

qualifying for the (a) rehabilitation credit

should furnish you a copy of the

Reminder: A partner is required to notify

from other than rental real estate

partnership’s Form 8873 if there is a

the partnership of its status as a publicly

activities, (b) energy credit, or (c)

reduction for international boycott

traded partnership.

reforestation credit. Enter the

operations, illegal bribes, kickbacks, etc.

expenditures on the appropriate line of

22. Amortizable basis of reforestation

25. Commercial revitalization deduction

Form 3468 to figure your allowable credit.

expenses and the year paid or incurred.

from rental real estate activities. Follow

14. Any information you need to figure

To figure your allowable amortization,

the instructions on Form 8582 for

your recapture tax on Form 4255,

including limits that may apply, see

commercial revitalization deductions from

Recapture of Investment Credit. See the

section 194 and Pub. 535. Follow the

rental real estate activities to figure how

Form 3468 on which you took the original

Instructions for Form 8582 to report

much of the deduction can be reported on

credit for other information you need to

amortization allocable to a passive

Schedule E, Part II, column (g).

complete Form 4255.

activity. However, if the box in Item H is

26. Any information you need to

checked, report the amortization following

You may also need Form 4255 if you

complete a tax shelter disclosure

the rules for Publicly traded

disposed of more than one-third of your

statement for each reportable transaction

partnerships on page 4. Report

interest in a partnership.

in which the partnership participates. As a

amortization from a trade or business

15. Any information you need to figure

partner, you are an indirect participant in

activity in which you materially

your recapture of the qualified electric

any tax shelter transaction entered into by

participated on a separate line in Part II,

vehicle credit. See Pub. 535 for details,

the partnership. You are required to file a

column (i), of Schedule E (Form 1040).

including how to figure the recapture.

tax shelter disclosure statement for each

23. Any information you need to figure

16. Recapture of new markets credit

of these transactions with your income tax

the interest due under section 1260(b). If

(see Form 8874).

return. See your income tax return

the partnership had gain from certain

17. Any information you need to figure

instructions (Schedule E instructions for

constructive ownership transactions, your

your recapture of the Indian employment

Form 1040) for more information.

tax liability must be increased by the

credit. Generally, if the partnership

27. Any other information you may

interest charge on any deferral of gain

terminated a qualified employee less than

need to file your return not shown

recognition under section 1260(b). Report

1 year after the date of initial employment,

elsewhere on Schedule K-1.

the interest on Form 1040, line 61. Write

any Indian employment credit allowed for

The partnership should give you a

“1260(b)” and the amount of the interest

a prior tax year by reason of wages paid

description and the amount of your share

on the dotted line to the left of line 61.

or incurred to that employee must be

for each of these items.

See section 1260(b) for details, including

recaptured. For details, see section

how to figure the interest.

45A(d).

-11-

Partner’s Instructions for Schedule K-1

Partner'S Instructions For Schedule K-1 (Form 1065) - Partner'S Share Of Income, Credits, Deductions, Etc. (For Partner'S Use Only) - 2002 Page 11

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