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Credits that may be reported on line

The amounts shown on lines

Form 4626, Alternative Minimum Tax —

12c, 12d, or 13 (depending on the type of

14b(1) and 14b(2) include only

Corporations; or Schedule I of Form

activity they relate to) include the

investment income and expenses

1041, U.S. Income Tax Return for Estates

CAUTION

following:

included on lines 4a, 4b, 4c, 4f, and 10 of

and Trusts.

•

Credit for backup withholding on

this Schedule K-1. The partnership should

Note: A partner that is a corporation

dividends, interest income, and other

attach a schedule that shows the amount

subject to alternative minimum tax must

types of income. Include the amount the

of any investment income and expenses

notify the partnership of its status.

partnership reports to you in the total that

included on any other lines of this

you enter on Form 1040, line 62.

Schedule K-1. Be sure to take these

Lines 16d(1) and 16d(2)—Gross

•

Nonconventional source fuel credit.

amounts into account, along with the

Income From, and Deductions

•

Qualified electric vehicle credit (Form

amounts on lines 14b(1) and 14b(2) and

Allocable to, Oil, Gas, and

8834).

your investment income and expenses

•

Geothermal Properties

Unused credits from cooperatives.

from other sources, when figuring the

•

The amounts reported on these lines

Work opportunity credit (Form 5884).

amounts to enter in Part II of Form 4952.

•

include only the gross income from, and

Welfare-to-work credit (Form 8861).

•

Self-Employment

deductions allocable to, oil, gas, and

Credit for alcohol used as fuel (Form

geothermal properties that are included

6478).

If you and your spouse are both partners,

•

on line 1 of Schedule K-1. The

Credit for increasing research activities

each of you must complete and file your

partnership should have attached a

(Form 6765).

own Schedule SE (Form 1040),

•

schedule that shows any income from or

Enhanced oil recovery credit (Form

Self-Employment Tax, to report your

deductions allocable to such properties

8830).

partnership net earnings (loss) from

•

that are included on lines 2 through 11

Disabled access credit (Form 8826).

self-employment.

•

and line 25 of Schedule K-1. Use the

Renewable electricity production credit

Line 15a—Net Earnings (Loss)

amounts reported on lines 16d(1) and

(Form 8835).

•

From Self-Employment

16d(2) and the amounts on the attached

Empowerment zone and renewal

schedule to help you figure the net

community employment credit (Form

If you are a general partner, reduce this

amount to enter on line 25 of Form 6251

8844).

amount before entering it on Schedule SE

•

(line 22 of Schedule I, Form 1041; line 2o

Indian employment credit (Form 8845).

(Form 1040) by any section 179 expense

•

of Form 4626).

Credit for employer social security and

deduction claimed, unreimbursed

Medicare taxes paid on certain employee

partnership expenses claimed, and

Line 16e—Other Adjustments

tips (Form 8846).

depletion claimed on oil and gas

•

and Tax Preference Items

Orphan drug credit (Form 8820).

properties. Do not reduce net earnings

•

New markets credit (Form 8874).

Enter the information on the schedule

from self-employment by any separately

•

Credit for small employer pension plan

attached by the partnership for line 16e

stated deduction for health insurance

startup costs (Form 8881).

on the applicable lines of Form 6251,

expenses.

•

Credit for employer-provided child care

Form 4626, or Schedule I of Form 1041.

If the amount on this line is a loss,

facilities and services (Form 8882).

•

enter only the deductible amount on

New York Liberty Zone business

Foreign Taxes

Schedule SE (Form 1040). See

employee credit (Form 8884).

•

Limitations on Losses, Deductions,

Use the information on lines 17a through

Credit for contributions to selected

and Credits beginning on page 2.

17h and attached schedules to figure your

community development corporations

foreign tax credit. For more information,

If your partnership is an options dealer

(Form 8847).

•

see Form 1116, Foreign Tax Credit

General credits from an electing large

or a commodities dealer, see section

(Individual, Estate, Trust, or Nonresident

partnership. Report these credits on Form

1402(i).

Alien Individual), and its instructions;

3800, line 1r.

If your partnership is an investment

Form 1118, Foreign Tax Credit —

club, see Rev. Rul. 75-525, 1975-2 C.B.

Corporations, and its instructions; and

Investment Interest

350.

Pub. 514, Foreign Tax Credit for

If the partnership paid or accrued interest

Line 15b—Gross Farming or

Individuals.

on debts properly allocable to investment

Fishing Income

property, the amount of interest you are

Other

If you are an individual partner, enter the

allowed to deduct may be limited.

amount from this line, as an item of

Lines 18a and 18b—Section

information, on Schedule E (Form 1040),

For more information and the special

59(e)(2) Expenditures

Part V, line 41. Also use this amount to

provisions that apply to investment

figure net earnings from self-employment

interest expense, see Form 4952,

The partnership will show on line 18a the

under the farm optional method on

Investment Interest Expense Deduction,

type of qualified expenditures to which an

Schedule SE (Form 1040), Section B,

and Pub. 550, Investment Income and

election under section 59(e) may apply. It

Part II.

Expenses.

will identify the amount of the expenditure

on line 18b. If there is more than one type

Line 15c—Gross Nonfarm

Line 14a—Interest Expense on

of expenditure, the amount of each type

Income

Investment Debts

will be listed on an attachment.

If you are an individual partner, use this

Enter this amount on Form 4952, line 1,

Generally, section 59(e) allows each

amount to figure net earnings from

along with your investment interest

partner to elect to deduct certain

self-employment under the nonfarm

expense from Schedule K-1, line 11, if

expenses ratably over the number of

optional method on Schedule SE (Form

any, and from other sources to figure how

years in the applicable period rather than

1040), Section B, Part II.

much of your total investment interest is

deduct the full amount in the current year.

deductible.

Adjustments and Tax

Under the election, you may deduct

circulation expenditures ratably over a

Lines 14b(1) and 14b(2)—

Preference Items

3-year period. Research and

Investment Income and

Use the information reported on lines 16a

experimental expenditures and mining

Investment Expenses

through 16e (as well as your adjustments

exploration and development costs qualify

Use the amounts on these lines to figure

and tax preference items from other

for a writeoff period of 10 years.

the amounts to enter in Part II of Form

sources) to prepare your Form 6251,

Intangible drilling and development costs

4952.

Alternative Minimum Tax — Individuals;

may be deducted over a 60-month period,

-9-

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 9

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