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 5
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The tuition and fees deduction.
applied against passive income from the
Example. You have a Schedule E loss
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The deduction for one-half of
same PTP in later years. If the partner’s
of $12,000 (current year losses plus prior
self-employment taxes.
year unallowed losses) and a Schedule D
entire interest in the PTP is completely
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The exclusion from income of interest
gain of $7,200. Report the $7,200 gain on
disposed of, any unused losses are
from Series EE and I U.S. Savings Bonds
the appropriate line of Schedule D. On
allowed in full in the year of disposition.
used to pay higher education expenses.
Schedule E (Form 1040), line 28, report
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If you have an overall gain from a PTP,
The exclusion of amounts received
$7,200 of the losses as a passive loss in
the net gain is nonpassive income. In
under an employer’s adoption assistance
column (f). Carry forward to 2009 the
unallowed loss of $4,800 ($12,000 −
addition, the nonpassive income is
program.
included in investment income to figure
$7,200).
Commercial revitalization
your investment interest expense
If you have unallowed losses from
deduction. The special $25,000
deduction.
more than one activity of the PTP or from
allowance for the commercial
the same activity of the PTP that must be
revitalization deduction from rental real
Do not report passive income, gains,
reported on different forms, you must
estate activities is not subject to the active
or losses from a PTP on Form 8582.
allocate the unallowed losses on a pro
participation rules or modified adjusted
Instead, use the following rules to figure
rata basis to figure the amount allowed
gross income limits discussed above. See
and report on the proper form or schedule
from each activity or on each form.
Code Q. Commercial Revitalization
your income, gains, and losses from
Deduction on page 11.
passive activities that you held through
To allocate and keep a record of
Special rules for certain other
each PTP you owned during the tax year.
TIP
the unallowed losses, use
activities. If you have net income (loss),
Worksheets 5, 6, and 7 of Form
1. Combine any current year income,
deductions, or credits from any activity to
8582. List each activity of the PTP in
gains (losses), and any prior year
which special rules apply, the partnership
Worksheet 5. Enter the overall loss from
unallowed losses to see if you have an
will identify the activity and all amounts
each activity in column (a). Complete
overall gain (loss) from the PTP. Include
relating to it on Schedule K-1 or on an
column (b) of Worksheet 5 according to
only the same types of income and losses
attachment.
its instructions. Multiply the total
you would include in your net income or
unallowed loss from the PTP by each
If you have net income subject to
loss from a non-PTP passive activity. See
ratio in column (b) and enter the result in
recharacterization under Temporary
Pub. 925 for more details.
column (c) of Worksheet 5. Then,
Regulations section 1.469-2T(f) and
2. If you have an overall gain, the net
complete Worksheet 6 if all the loss from
Regulations section 1.469-2(f), report
gain portion (total gain minus total losses)
the same activity is to be reported on one
such amounts according to the
is nonpassive income. On the form or
form or schedule. Use Worksheet 7
Instructions for Form 8582 (or Form
schedule you normally use, report the net
instead of Worksheet 6 if you have more
8810).
gain portion as nonpassive income and
than one loss to be reported on different
the remaining income and the total losses
If you have net income (loss),
forms or schedules for the same activity.
as passive income and loss. To the left of
deductions, or credits from any of the
Enter the net loss plus any prior year
the entry space, enter “From PTP.” It is
following activities, treat such amounts as
unallowed losses in column (a) of
nonpassive and report them as instructed
important to identify the nonpassive
Worksheet 6 (or Worksheet 7 if
in these instructions.
income because the nonpassive portion is
applicable). The losses in column (c) of
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Working interests in oil and gas wells.
included in modified adjusted gross
Worksheet 6 (column (e) of Worksheet 7)
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The rental of a dwelling unit any partner
income for purposes of figuring on Form
are the allowed losses to report on the
used for personal purposes during the
8582 the “special allowance” for active
forms or schedules. Report both these
year for more than the greater of 14 days
participation in a non-PTP rental real
losses and any income from the PTP on
or 10% of the number of days that the
estate activity. In addition, the nonpassive
the forms and schedules you normally
residence was rented at fair rental value.
income is included in investment income
use.
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Trading personal property for the
when figuring your investment interest
4. If you have an overall loss and you
account of owners of interests in the
expense deduction on Form 4952,
disposed of your entire interest in the PTP
activity.
Investment Interest Expense Deduction.
to an unrelated person in a fully taxable
Self-charged interest. The partnership
Example. If you have Schedule E
transaction during the year, your losses
must report any “self-charged” interest
income of $8,000, and a Form 4797 prior
(including prior year unallowed losses)
income or expense that resulted from
year unallowed loss of $3,500 from the
allocable to the activity for the year are
loans between you and the partnership
passive activities of a particular PTP, you
not limited by the passive loss rules. A
have a $4,500 overall gain ($8,000 −
(or between the partnership and another
fully taxable transaction is one in which
partnership in which you have an
$3,500). On Schedule E (Form 1040), line
you recognize all your realized gain
interest). If there was more than one
28, report the $4,500 net gain as
(loss). Report the income and losses on
activity, the partnership will provide a
nonpassive income in column (j). In
the forms and schedules you normally
statement allocating the interest income
column (g), report the remaining
use.
Schedule E gain of $3,500 ($8,000 −
or expense with respect to each activity.
The self-charged interest rules do not
$4,500). On the appropriate line of Form
Note. For rules on the disposition of an
apply to your partnership interest if the
4797, report the prior year unallowed loss
entire interest reported using the
partnership made an election under
of $3,500. Be sure to enter “From PTP” to
installment method, see the Instructions
Regulations section 1.469-7(g) to avoid
the left of each entry space.
for Form 8582.
the application of these rules. See the
3. If you have an overall loss (but did
Instructions for Form 8582 for more
not dispose of your entire interest in the
information.
PTP to an unrelated person in a fully
Specific Instructions
taxable transaction during the year), the
Publicly traded partnerships. The
losses are allowed to the extent of the
passive activity limitations are applied
Publicly Traded
income, and the excess loss is carried
separately for items (other than the
forward to use in a future year when you
low-income housing credit and the
Partnership (PTP)
have income to offset it. Report as a
rehabilitation credit) from each publicly
passive loss on the schedule or form you
traded partnership (PTP). Thus, a net
If the “publicly traded partnership” box is
normally use the portion of the loss equal
passive loss from a PTP may not be
checked, you are a partner in a publicly
to the income. Report the income as
deducted from other passive income.
traded partnership (PTP) and must follow
passive income on the form or schedule
Instead, a passive loss from a PTP is
the rules under Publicly traded
you normally use.
suspended and carried forward to be
partnerships discussed above.
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