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unless the total claimed deduction for all

Any amounts paid during the tax year

one credit, see the Instructions for Form

contributed items of property exceeds

for insurance that constitutes medical

3800.

$500.

care for you, your spouse, and your

Line 12a—Low-Income

dependents. On line 30 of Form 1040,

Charitable contribution deductions are

Housing Credit

you may be allowed to deduct up to 70%

not taken into account in figuring your

of such amounts, even if you do not

Your share of the partnership’s

passive activity loss for the year. Do not

itemize deductions. If you do itemize

low-income housing credit is shown on

enter them on Form 8582.

deductions, enter on line 1 of Schedule A

line 12a. Any allowable credit is entered

(Form 1040) any amounts not deducted

on Form 8586, Low-Income Housing

Line 9—Section 179 Expense

on line 30 of Form 1040.

Credit.

Deduction

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Payments made on your behalf to an

The partnership will report separately

Use this amount, along with the total cost

IRA, qualified plan, simplified employee

on line 12a(1) that portion of the

of section 179 property placed in service

pension (SEP), or a SIMPLE IRA plan.

low-income housing credit to which

during the year from other sources, to

See Form 1040 instructions for line 24 to

section 42(j)(5) applies. All other

complete Part I of Form 4562,

figure your IRA deduction. Enter

low-income housing credits will be

Depreciation and Amortization. Use Part I

payments made to a qualified plan, SEP,

reported on line 12a(2).

of Form 4562 to figure your allowable

or SIMPLE IRA plan on Form 1040, line

If part or all of the credit reported on

section 179 expense deduction from all

31. If the payments to a qualified plan

line 12a(1) or 12a(2) is attributable to

sources. Report the amount on line 12 of

were to a defined benefit plan, the

additions to qualified basis of property

Form 4562 allocable to a passive activity

partnership should give you a statement

placed in service before 1990, the

from the partnership using the

showing the amount of the benefit

partnership will attach a statement to tell

Instructions for Form 8582. However, if

accrued for the current tax year.

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you the amount of the credit on each line

the box in Item H is checked, report this

Interest expense allocated to

that is attributable to property placed in

amount following the rules for Publicly

debt-financed distributions. The manner

service (a) before 1990 and (b) after

traded partnerships on page 4. If the

in which you report such interest expense

1989.

amount is not a passive activity

depends on your use of the distributed

deduction, report it on Schedule E (Form

Keep a separate record of the amount

debt proceeds. See Notice 89-35, 1989-1

1040), Part II, column (j).

of low-income housing credit from each of

C.B. 675, for details.

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these sources so that you will be able to

Interest paid or accrued on debt

Line 10—Deductions Related to

correctly compute any recapture of

properly allocable to your share of a

Portfolio Income

low-income housing credit that may result

working interest in any oil or gas property

from the disposition of all or part of your

Amounts entered on this line are

(if your liability is not limited). If you did

partnership interest. For more

deductions that are clearly and directly

not materially participate in the oil or gas

information, see the Instructions for Form

allocable to portfolio income (other than

activity, this interest is investment interest

8586.

investment interest expense and section

reportable as described below; otherwise,

212 expenses from a REMIC). Generally,

it is trade or business interest.

Line 12b—Qualified

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you should enter line 10 amounts on

Contributions to a capital construction

Rehabilitation Expenditures

Schedule A (Form 1040), line 22. See the

fund (CCF). The deduction for a CCF

Related to Rental Real Estate

Instructions for Schedule A, lines 22 and

investment is not taken on Schedule E

Activities

27, for more information. However, enter

(Form 1040). Instead, you subtract the

deductions allocable to royalties on

deduction from the amount that would

The partnership should identify your

Schedule E (Form 1040), line 18. For the

normally be entered as taxable income on

share of the partnership’s rehabilitation

type of expense, write “From Schedule

line 41 (Form 1040). In the margin to the

expenditures from each rental real estate

K-1 (Form 1065).”

left of line 41, write ‘‘CCF’’ and the

activity. Enter the expenditures on the

amount of the deduction.

appropriate line of Form 3468,

These deductions are not taken into

The partnership should give you a

Investment Credit, to figure your

account in figuring your passive activity

description and the amount of your share

allowable credit.

loss for the year. Do not enter them on

for each of these items.

Form 8582.

Line 12c—Credits (Other Than

Credits Shown on Lines 12a

Credits

Line 11—Other Deductions

and 12b) Related to Rental Real

Amounts on this line are deductions not

If you have credits that are passive

Estate Activities

included on lines 8, 9, 10, 17g, and 18b,

activity credits to you, you must complete

The partnership will identify the type of

such as:

Form 8582-CR (or Form 8810 for

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credit and any other information you need

Itemized deductions (Form 1040 filers

corporations) in addition to the credit

to compute credits from rental real estate

enter on Schedule A (Form 1040)).

forms identified below. See the

activities (other than the low-income

Instructions for Form 8582-CR (or Form

Note: If there was a gain (loss) from a

housing credit and qualified rehabilitation

8810) for more information.

casualty or theft to property not used in a

expenditures).

trade or business or for income-producing

Also, if you are entitled to claim more

Line 12d—Credits Related to

purposes, the partnership will notify you.

than one listed general business credit

Other Rental Activities

You will have to complete your own Form

(investment credit, work opportunity

4684.

credit, welfare-to-work credit, credit for

The partnership will identify the type of

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Any penalty on early withdrawal of

alcohol used as fuel, research credit,

credit and any other information you need

savings.

low-income housing credit, enhanced oil

to compute credits from rental activities

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Soil and water conservation

recovery credit, disabled access credit,

other than rental real estate activities.

expenditures. See section 175 for

renewable electricity production credit,

Line 13—Other Credits

limitations on the amount you are allowed

Indian employment credit, credit for

to deduct.

employer social security and Medicare

The partnership will identify the type of

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Expenditures for the removal of

taxes paid on certain employee tips,

credit and any other information you need

architectural and transportation barriers to

orphan drug credit, and credit for

to compute credits other than on lines 12a

the elderly and disabled that the

contributions to selected community

through 12d. Expenditures qualifying for

partnership elected to treat as a current

development corporations), you must

the (a) rehabilitation credit from other than

expense. The deductions are limited by

complete Form 3800, General Business

rental real estate activities, (b) energy

section 190(c) to $15,000 per year from

Credit, in addition to the credit forms

credit, or (c) reforestation credit will be

all sources.

identified below. If you have more than

reported to you on line 25.

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

Partner'S Instructions For Schedule K-1 (Form 1065) - Partner'S Share Of Income, Credits, Deductions, Etc. (For Partner'S Use Only) - 2002 Page 8

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