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4. Your share of the gross sales price or

disposition of certain timeshares and

A partner is required to notify the

amount realized.

residential lots on the installment method. If

partnership of its tax-exempt status.

TIP

you are an individual, report the interest on

5. Your share of the cost or other basis

Form 1040, line 62. Check box c and enter

plus the expense of sale.

“453(l)(3)” and the amount of the interest in

Code W. Precontribution gain (loss). If

6. Your share of the depreciation

the space to the left of line 62.

the partnership distributed any property with

allowed or allowable.

precontribution gain or loss to any partner

Code P. Section 453A(c) information.

7. Your share of the section 179

other than the contributing partner, and the

The partnership will report any information

expense deduction (if any) passed through

date of the distribution was within 7 years of

you need to figure the interest due under

for the property and the partnership's tax

the date the property was contributed to the

section 453A(c) with respect to certain

year(s) in which the amount was passed

partnership, the contributing partner must

installment sales. If you are an individual,

through. To figure the amount of depreciation

recognize a gain or loss under section 704(c)

report the interest on Form 1040, line 62.

allowed or allowable for Form 4797, line 22,

(1)(B). If the partnership made such a

Check box c and enter “453A(c)” and the

add to the amount from item 6, above, the

distribution during its tax year, it will enter

amount of the interest in the space to the left

amount of your share of the section 179

code W in box 20 of the contributing

of line 62. See the Form 6252 instructions for

expense deduction, reduced by any unused

partner's Schedule K-1 and attach a

more information. Also see section 453A(c)

carryover of the deduction for this property.

statement providing the amount of the

for details on how to figure the interest.

This amount may be different from the

partner's precontribution gain (loss) and

amount of section 179 expense you

Code Q. Section 1260(b) information.

identifying the character of the gain or loss

deducted for the property if your interest in

The partnership will report any information

(for example, capital gain (loss) or section

the partnership has changed.

you need to figure the interest due under

1231 gain (loss)). Report the precontribution

section 1260(b). If the partnership had gain

gain or loss on Form 8949/Schedule D or

8. If the disposition is due to a casualty

from certain constructive ownership

Form 4797 in accordance with the

or theft, a statement providing the

transactions, your tax liability must be

information provided by the partnership.

information you need to complete Form

increased by the interest charge on any

4684.

Code X. Section 108(i) information. If the

deferral of gain recognition under section

9. If the sale was an installment sale

partnership made a section 108(i) election or

1260(b). Report the interest on Form 1040,

made during the partnership's tax year, any

allocates any section 108(i) items to its

line 62. Enter “1260(b)” and the amount of

information you need to complete Form

partners, it will provide a statement

the interest in the space to the left of line 62.

6252, Installment Sale Income. The

identifying your share of:

See section 1260(b) for details, including

partnership will separately report your share

The deferred section 108(i) cancellation of

how to figure the interest.

of all payments received for the property in

debt (COD) income that has not been

future tax years. See the Form 6252

Code R. Interest allocable to production

included in income in the current or prior tax

instructions for details.

expenditures. The partnership will report

years,

any information you need relating to interest

The partnership's original issue discount

Code M. Recapture of section 179 deduc-

you are required to capitalize under section

(OID) deduction deferred under section

tion. The partnership will report your share

263A for production expenditures. See

108(i)(2)(A)(i) that has not been deducted in

of any recapture of section 179 expense

Regulations sections 1.263A-8 through

the current or prior tax years,

deduction if business use of any property for

1.263A-15 for details.

The deferred section 752 amount that is

which the section 179 expense deduction

treated as a distribution of money under

Code S. CCF nonqualified withdrawals.

was passed through to partners dropped to

section 752 in the current tax year, and

The partnership will report your share of

50% or less. If this occurs, the partnership

The deferred section 752 amount

nonqualified withdrawals from a capital

must provide the following information.

remaining as of the end of the current tax

construction fund (CCF). These withdrawals

year.

1. Your share of the depreciation

are taxed separately from your other gross

allowed or allowable (not including the

income at the highest marginal ordinary

Code Y. Net investment income. The

section 179 expense deduction).

income or capital gains tax rate. Attach a

partnership may use this code Y to report

statement to your federal income tax return

2. Your share of the section 179

information you may need to determine your

expense deduction (if any) passed through

to show your computation of both the tax and

net investment income tax under section

for the property and the partnership's tax

interest for a nonqualified withdrawal.

1411, including information regarding

Include the tax and interest on Form 1040,

year(s) in which the amount was passed

income from controlled foreign corporations

through. Reduce this amount by the portion,

line 62. In the space to the left of line 62,

(CFCs) and passive foreign investment

if any, of your unused (carryover) section

enter the amount of tax and interest and

companies (PFICs) the stock of which is

“CCF.”

179 expense deduction for this property.

owned by the partnership. Any information

that isn't provided elsewhere on

Code T. Depletion information—oil and

Code N. Interest expense for corporate

Schedule K-1 (or an attachment to

gas. This is your share of gross income

partners. The partnership will report each

Schedule K-1) is provided using code Y. For

from the property, share of production for the

corporate partner's share of the partnership's

CFCs and PFICs that you treat as qualified

tax year, and other information needed to

interest expense. This amount is reported

electing funds (QEFs), the information that is

figure your depletion deduction for oil and

elsewhere on Schedule K-1 and the total

relevant to you will depend on whether you,

gas wells. The partnership should also

amount is reported here for information only.

the partnership, or a lower-tier entity has

allocate to you a share of the adjusted basis

Your share of interest income is reported in

made an election under Regulations section

of each partnership oil or gas property. See

box 5 and your share of the partnership's

1.1411-10(g) with respect to the CFC or

Pub. 535 for details on how to figure your

liabilities is reported in Part II, item K. A

QEF. For example, if the partnership made

depletion deduction.

corporate partner's share of interest income,

an election under Regulations section

interest expense, and partnership liabilities

Code U. Reserved.

1.1411-10(g) for a CFC the stock of which is

are treated as income, expense, and

owned by the partnership, and the relevant

Code V. Unrelated business taxable in-

liabilities of the corporation for purposes of

income and deduction items derived from

come. The partnership will report any

the limitation on the deduction for interest

that CFC are reported elsewhere on the

information you need to figure unrelated

under section 163(j).

Schedule K-1, then you will not need the

business taxable income under section

information provided in code Y to complete

Code O. Section 453(l)(3) information.

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

your Form 8960.

The partnership will report any information

required by paragraphs (8) through (15) of

If you are an individual who is a U.S.

you need to figure the interest due under

section 512(b)) for a partner that is a

citizen or resident, or a domestic trust or

section 453(l)(3) with respect to the

tax-exempt organization.

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

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Partner'S Instructions For Schedule K-1 (Form 1065) - Partner'S Share Of Income, Deductions, Credits, Etc. (For Partner'S Use Only) - 2016 Page 15

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