If the partnership is reporting expenditures from more than one activity, the attached statement will separately identify the expenditures from each activity. See the Form 6252 instructions for details. You are claiming the investment credit (Form 3468) or the biodiesel and renewable diesel fuels credit (Form 8864) in Part III with box A or B checked. If you determine that you didn't materially participate in a trade or business activity of the partnership or if you have income (loss), deductions, or credits from a rental activity of the partnership (other than a rental real estate activity in which you materially participated as a real estate professional), the amounts from that activity are passive. Distribution subject to section 737. Do not include the amount attributable to PTEP in your annual PTEP accounts on Form 1040 or 1040-SR, line 3b. Deductionsportfolio (formerly deductible by individuals under section 67 subject to the 2% AGI floor). The at-risk rules generally limit the amount of loss and other deductions that you can claim to the amount you could actually lose in the activity. The partnership isn't responsible for keeping the information needed to figure the basis of your partnership interest. Gain eligible for section 1045 rollover.Replacement stock purchased by the partnership. The amounts reported reflect your distributive share of the partnerships UBIA of qualified property of each qualified trade, business, or aggregation. However, include your share of the partnership's section 179 expense deduction for this year even if you cannot deduct all of it because of limitations. The dates the QSB stock was purchased and sold. 115 - 97, made it less desirable to classify advisory fees and other investment expenses as Sec. If the proceeds are used for personal purposes, the interest is generally not deductible. For your protection, this form may show only the last four digits of the TIN in items E and H2, as noted under Purpose of Schedule K-1, earlier. Portfolio income or loss (shown in boxes 5 through 9b and in box 11, code A) isn't subject to the passive activity limitations. Your participation in the activity for the tax year constituted substantially all the participation in the activity of all individuals (including individuals who are not owners of interests in the activity). Report this amount, subject to the 30% AGI limitation, on Schedule A (Form 1040), line 12. Use this amount, along with the total cost of section 179 property placed in service during the year from other sources, to complete Part I of Form 4562, Depreciation and Amortization. This information is necessary if your losses are limited under section 704(d). Codes F and G. Recapture of low-income housing credit. Unused investment credit from the qualifying advanced coal project credit, qualifying gasification project credit, qualifying advanced energy project credit, and advanced manufacturing investment credit allocated from cooperatives (Form 3468, line 9). Use Form 8866, Interest Computation Under the Look-Back Method for Property Depreciated Under the Income Forecast Method, to report any such interest. The partnership should also give you (a) the name of the corporation that issued the QSB stock, (b) your share of the partnership's adjusted basis and sales price of the QSB stock, and (c) the dates the QSB stock was bought and sold. You must have held an interest in the partnership when the partnership acquired the QSB stock and at all times thereafter until the partnership disposed of the QSB stock. Schedule K-3 replaced prior boxes 16 and 20 for certain international items on Schedule K-1. The program uses the allowed portion to calculate investment interest expense on Form 4952, if applicable. If the proceeds were used in a trade or business activity, report the interest on Schedule E (Form 1040), line 28. For details on making this election, see the Instructions for Schedule E (Form 1040), Supplemental Income and Loss. If you are not an individual, report the amounts in each box as instructed on your tax return. Code M. Amounts paid for medical insurance. Because the basis of your interest in the partnership has been increased by your share of the interest income from these credits, you must reduce your basis by the same amount. For a corporation, use Form 8810, Corporate Passive Activity Loss and Credit Limitations. The partnership will report any self-charged interest income or expense that resulted from loans between you and the partnership (or between the partnership and another partnership or S corporation if both entities have the same owners with the same proportional ownership interest in each entity). The partnership will identify the type of credit and any other information you need to figure these credits from rental real estate activities (other than the low-income housing credit and qualified rehabilitation expenditures). Section references are to the Internal Revenue Code unless otherwise noted. These porfolio deductions are not subject to the 2% floor. If the payments to a qualified plan were to a defined benefit plan, the partnership should give you a statement showing the amount of the benefit accrued for the current tax year. Top Rated Answers All Answers Where to Input 1065 K-1 Line 20 AG in 1040 Tax Prep 1. A personal service activity involves the performance of personal services in the field of health, law, engineering, architecture, accounting, actuarial science, performing arts, consulting, or any other trade or business in which capital isn't a material income-producing factor. See the Instructions for Form 8582 for details. Item 4 from the list above, less the sum of items 7 and 8. Qualified nonrecourse financing generally includes financing for which no one is personally liable for repayment that is borrowed for use in an activity of holding real property and that is loaned or guaranteed by a federal, state, or local government or borrowed from a qualified person. 1. Reduce this amount by the portion, if any, of your unused (carryover) section 179 expense deduction for this property. Report as a passive loss on the schedule or form you normally use the portion of the loss equal to the income. Deductionsportfolio income (formerly deductible by individuals under section 67 subject to 2% AGI floor). The nondeductible expenses paid or incurred by the partnership are not deductible on your tax return. The self-charged interest rules do not apply to your partnership interest if the partnership made an election under Regulations section 1.469-7(g) to avoid the application of these rules. The activity of holding mineral property doesn't qualify for this exception. Information About the Partnership, Part III. If the partner is an individual, the partnership will enter the partner's SSN or individual taxpayer identification number (ITIN). If you didn't materially participate, follow the Instructions for Form 8582 to figure how much of the deduction can be reported in column (g). If the partnership had more than one activity, it will attach a statement to your Schedule K-1 that identifies each activity (trade or business activity, rental real estate activity, rental activity other than rental real estate, and other activity) and specifies the income (loss), deductions, and credits from each activity. You can elect to deduct 100% of these contributions on Schedule A (Form 1040), line 11. If box 16 is not checked, you should receive notification from the partnership that you will not be receiving a Schedule K-3 unless you request one. If you didn't materially participate in the activity, use Form 8582 to determine the amount that can be reported on Schedule E (Form 1040), line 28, column (g). The passive activity limitations are applied separately for items (other than the low-income housing credit and the rehabilitation credit) from each PTP. Examples of work done as an investor that would not count toward material participation include: Studying and reviewing financial statements or reports on operations of the activity, Preparing or compiling summaries or analyses of the finances or operations of the activity for your own use, and. "Portfolio Deductions - The Portfolio Deductions and Swap Expenses from investing activities, if any, are portfolio deductions formerly reported by box 13k as 2% portfolio deductions that are non-deductible for certain tax payers, including individuals, and would reduce your tax basis in the partnership. Code V. Unrelated business taxable income. Gain or loss attributable to the sale or exchange of qualified preferred stock of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). Include deductions allocable to royalties on Schedule E (Form 1040), line 19. Corporations should refer to the Instructions for Form 8810 for the material participation standards that apply to them. Your 2022 taxable income before the QBI deduction is equal to or less than $170,050 ($340,100 if married filing jointly). The following additional limitations apply at the partner level. If you didn't materially participate in the activity, follow the Instructions for Form 8582 to figure the interest expense you can report in column (g). Code A. Post-1986 depreciation adjustment. Deductible expenses subject to the 2% floor includes: Unreimbursed employee business expenses such as: Expenses for uniforms and special clothing If your MAGI is more than $100,000 (more than $50,000 if married filing separately), the special allowance is limited to 50% of the difference between $150,000 ($75,000 if married filing separately) and your MAGI. Report unrecaptured section 1250 gain from the sale or exchange of an interest in a partnership on line 10. You arent a patron in a specified agricultural or horticultural cooperative. Your total loss from the rental real estate activities wasn't more than $25,000 (not more than $12,500 if married filing separately and you lived apart from your spouse all year). Include the tax and interest on Schedule 2 (Form 1040), line 17z. See, For tax years beginning after November 12, 2020, the partnership will report your share of the partnership's deductible business interest expense for inclusion in the separate loss class for computing any basis limitation (defined in section 704(d), Regulations section 1.163(j)-6(h)). See the instructions for these forms for details. Low sulfur diesel fuel production credit (Form 8896). The partnership will report on an attached statement the amount of gain or loss attributable to the sale or exchange of the qualified preferred stock, the date the stock was acquired by the partnership, and the date the stock was sold or exchanged by the partnership. Distribution subject to section 737, Code D. Qualified rehabilitation expenditures (other than rental real estate), Code F. Recapture of low-income housing credit for section 42(j)(5) partnerships, Code G. Recapture of low-income housing credit for other partnerships, Code J. Look-back interestcompleted long-term contracts, Code K. Look-back interestincome forecast method, Code L. Dispositions of property with section 179 deductions, Code M. Recapture of section 179 deduction, Code N. Business interest expense (information item), Code R. Interest allocable to production expenditures, See Regulations sections 1.263A-8 through 15, Code S. Capital construction fund (CCF) nonqualified withdrawals, Code V. Unrelated business taxable income, Form 8949 and/or Schedule D (Form 1040); or Form 4797, Code AD. Report royalties on Schedule E (Form 1040), line 4. The written notice to the partnership must include the names and addresses of both parties to the exchange, the identifying numbers of the transferor and (if known) of the transferee, and the exchange date. If the amount on this line is a loss, enter only the deductible amount on Schedule SE (Form 1040). See Special allowance for a rental real estate activity, earlier. The partnership will include a separate code AH for the total remedial income, if any, allocated to the U.S. transferor; total gain recognized due to an acceleration event; or total gain recognized due to a section 367 transfer reflected on Form 8865, Schedule G, Part II, columns (c), (d), and (e), respectively. The partnership will report on an attached statement your share of qualified food inventory contributions. Increase the adjusted basis of your interest in the partnership by the amount shown, but do not include it in income on your tax return.