Partner'S Instructions For Schedule K-1 (Form 1065-B) - Partner'S Share Of Income (Loss) From An Electing Large Partnership (For Partner'S Use Only) - 2008 Page 10
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If you received the securities in
You must have held an interest in the
Replacement stock has not been
liquidation of your partnership interest,
partnership when the partnership
purchased by the partnership. The
your basis in the marketable securities is
acquired the QSB stock and at all times
partnership must also provide you with:
•
equal to the adjusted basis of your
thereafter until the partnership disposed
The name of the corporation that
partnership interest reduced by any cash
of the QSB stock.
issued the qualified small business (QSB)
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distributed in the same transaction and
Your distributive share of the eligible
stock,
•
increased by any gain recognized on the
section 1202 gain cannot exceed the
Your share of the partnership’s
distribution of the securities.
amount that would have been allocated to
adjusted basis of the QSB stock,
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you based on your interest in the
Your share of the partnership’s sales
If, within 7 years of a distribution to you
partnership at the time the QSB stock
price of the QSB stock,
of marketable securities, you contributed
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was acquired.
The dates the QSB stock was bought
appreciated property (other than those
and sold, and
securities) to the partnership and the FMV
See the Instructions for Schedule D
•
Your distributive share of the gain from
of those securities exceeded the adjusted
(Form 1040) for details on how to report
the sale of the QSB stock.
basis of your partnership interest
the gain and the amount of the allowable
Corporate partners are not eligible for
immediately before the distribution
exclusion.
the section 1045 rollover. To qualify for
(reduced by any cash received in the
Code M8. Gain eligible for section 1045
the section 1045 rollover:
distribution), you may have to recognize
rollover – stock replaced. This gain is
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You must have held an interest in the
gain on the appreciated property. See
eligible for the section 1045 rollover.
partnership during the entire period in
section 737 for details.
Replacement stock has been purchased
which the partnership held the QSB stock
Code M6. Distributions of property
by the partnership. The partnership must
(more than 6 months prior to the sale),
other than money. Box 9, Code M6,
also provide you with:
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Your distributive share of the gain
shows the partnership’s adjusted basis of
The name of the corporation that
eligible for the section 1045 rollover
property other than money immediately
issued the qualified small business (QSB)
cannot exceed the amount that would
before the property was distributed to
stock,
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have been allocated to you based on your
you. In addition, the partnership should
Your share of the partnership’s
interest in the partnership at the time the
attach a statement showing the cost basis
adjusted basis of the QSB stock,
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stock was acquired, and
and FMV of each property distributed.
Your share of the partnership’s sales
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You must purchase other QSB stock
Decrease the adjusted basis of your
price of the QSB stock,
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(as defined in the Instructions for
interest in the partnership by the amount
The dates the QSB stock was bought
Schedule D (Form 1040)) during the
of your basis in the distributed property.
and sold,
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60-day period that began on the date the
Your basis in the distributed property
Your distributive share of gain from the
QSB stock was sold by the partnership.
(other than in liquidation of your interest)
sale of the QSB stock, and
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See the Instructions for Schedule D
is the smaller of:
Your distributive share of the gain that
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(Form 1040) for details on how to report
The partnership’s adjusted basis
was deferred by the partnership under
the gain and the amount of the allowable
immediately before the distribution or
section 1045.
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postponed gain.
The adjusted basis of your partnership
Corporate partners are not eligible for
interest reduced by any cash distributed
Making the section 1045 election.
the section 1045 rollover. To qualify for
in the same transaction.
You make a section 1045 election on a
the section 1045 rollover:
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timely filed return for the tax year during
If you received the property in
You must have held an interest in the
which the partnership’s tax year ends.
liquidation of your interest, your basis in
partnership during the entire period in
Attach to your Schedule D (Form 1040) a
the distributed property is equal to the
which the partnership held the QSB stock
statement that includes the following
adjusted basis of your partnership interest
(more than 6 months prior to the sale)
information for each amount of gain that
reduced by any cash distributed in the
and
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you do not recognize under section 1045:
same transaction.
Your distributive share of the gain
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The name of the corporation that
eligible for the section 1045 rollover
If you contributed appreciated property
issued the QSB stock.
cannot exceed the amount that would
to the partnership within 7 years of a
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The name and EIN of the selling
have been allocated to you based on your
distribution of other property to you, and
partnership.
interest in the partnership at the time the
the FMV of the other property exceeded
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The dates the QSB stock was
QSB stock was acquired.
the adjusted basis of your partnership
purchased and sold.
interest immediately before the
See the Instructions for Schedule D
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The amount of gain that is not
distribution (reduced by any cash
(Form 1040) for details on how to report
recognized under section 1045.
received in the distribution), you may
the gain and the amount of the allowable
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If a partner purchases QSB stock, the
have to recognize gain on the appreciated
postponed gain.
name of the corporation that issued the
property. See section 737 for details.
Opting out of partnership election.
replacement QSB stock, the date the
Code M7. Gain eligible for section 1202
You can opt out of the partnership’s
stock was purchased, and the cost of the
exclusion. This gain from the sale or
section 1045 election and either (1)
stock.
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exchange of qualified small business
recognize the gain or (2) elect to
If a partner treats the partner’s interest
(QSB) stock (as defined in the
purchase different replacement QSB
in QSB stock that is purchased by a
Instructions for Schedule D) is eligible for
stock, either directly or through ownership
purchasing partnership as the partner’s
the partial section 1202 exclusion. The
of a partnership that acquired
replacement QSB stock, the name and
partnership must also provide you with:
replacement QSB stock. You satisfy the
EIN of the purchasing partnership, the
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The name of the corporation that
requirement to purchase replacement
name of the corporation that issued the
issued the QSB stock,
QSB stock if you own an interest in a
QSB stock, the partner’s share of the cost
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Your share of the partnership’s
partnership that purchases QSB stock
of the QSB stock that was purchased by
adjusted basis of the QSB stock,
during the 60-day period. You also must
the partnership, the computation of the
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Your share of the partnership’s sales
notify the partnership, in writing, if you opt
partner’s adjustment to basis with respect
price of the QSB stock, and
out of the partnership’s section 1045
to that QSB stock, and the date the stock
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The dates the QSB stock was bought
election. If you recognize gain, you must
was purchased by the partnership.
and sold.
notify the partnership, in writing, of the
Distribution of replacement QSB stock
amount of gain that you are recognizing.
Corporate partners are not eligible for
to a partner that reduces another
the section 1202 exclusion. The following
Code M9. Gain eligible for section 1045
partner’s interest in replacement QSB
additional limitations apply at the partner
rollover – stock not replaced. This gain
stock. You must recognize gain upon a
level.
is eligible for the section 1045 rollover.
distribution of replacement QSB stock to
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