2010 Instruction 1120-S Schedule K-1 - Internal Revenue Service

2010 

Shareholder’s Instructions 

for Schedule K-1 

(Form 1120S) 

Shareholder’s Share of Income, Deductions, Credits, etc. 

(For Shareholder’s Use Only) 

Department of the Treasury 

Internal Revenue Service 

Section references are to the Internal corporation has not filed a return, file Elections 

Revenue Code unless otherwise noted. 

Form 8082, Notice of Inconsistent 

Treatment or Administrative 

Generally, the corporation decides 

how to figure taxable income from its 

General Instructions Adjustment Request (AAR), with your operations. However, certain 

original or amended return to identify 

elections are made by you separately 

Purpose of Schedule K-1 and explain any inconsistency (or to on your income tax return and not by 

The corporation uses Schedule K-1 to note that a corporate return has not the corporation. These elections are 

report your share of the corporation’s been filed). 

made under the following code 

income (reduced by any tax the 

sections. 

corporation paid on the income), If you are required to file Form • Section 59(e) (deduction of certain 

deductions, credits, etc. Keep it for 8082 but do not do so, you may be 

qualified expenditures ratably over 

your records. Do not file it with your subject to the accuracy-related the period of time specified in that 

tax return. The corporation has filed a penalty. This penalty is in addition to section). For details, see the 

copy with the IRS. any tax that results from making your instructions for code J in box 12. 

You are liable for tax on your share 

amount or treatment of the item • Section 263A(d) (preproductive 

of the corporation’s income, whether consistent with that shown on the expenses). See the instructions for 

or not distributed. Include your share corporation’s return. Any deficiency code M in box 12. 

on your tax return if a return is that results from making the amounts • Section 617 (deduction and 

required. Use these instructions to consistent may be assessed 

recapture of certain mining 

help you report the items shown on immediately. 

exploration expenditures). 

Schedule K-1 on your tax return. 

• Section 901 (foreign tax credit). 

Your share of S corporation 

Errors 

income is not self-employment If you believe the corporation has Additional Information 

income and it is not subject to made an error on your Schedule K-1, 

self-employment tax. 

For more information on the 

notify the corporation and ask for a treatment of S corporation income, 

The amount of loss and deduction corrected Schedule K-1. Do not deductions, credits, etc., see Pub. 

you may claim on your tax return may change any items on your copy of 535, Business Expenses; Pub. 550, 

be less than the amount reported on Schedule K-1. Be sure that the Investment Income and Expenses; 

Schedule K-1. It is the shareholder’s corporation sends a copy of the and Pub. 925, Passive Activity and 

responsibility to consider and apply corrected Schedule K-1 to the IRS. If At-Risk Rules. 

any applicable limitations. See you are unable to reach agreement 

Limitations on Losses, Deductions, with the corporation regarding the To get forms and publications, see 

and Credits beginning on this page inconsistency, file Form 8082. the instructions for your tax return or 

for more information. 

visit the IRS website at IRS.gov. 

Schedule K-1 does not show 

actual dividend distributions the International Boycotts 

Every corporation that had operations 

Limitations on Losses, 

corporation made to you. The 

corporation must report such 

in, or related to, a boycotting country, Deductions, and Credits 

amounts totaling $10 or more for the company, or a national of a country There are three potential limitations 

calendar year on Form 1099-DIV, must file Form 5713, International on corporate losses that you can 

Dividends and Distributions. Boycott Report. deduct on your return. These 

limitations and the order in which you 

Inconsistent Treatment If the corporation cooperated with must apply them are as follows: the 

an international boycott, it must give basis rules, the at-risk limitations, and 

of Items you a copy of its Form 5713. You the passive activity limitations. These 

Generally, you must report corporate must file your own Form 5713 to limitations are discussed below. 

items shown on your Schedule K-1 report the corporation’s activities and 

(and any attached schedules) the any other boycott operations that you Other limitations may apply to 

same way that the corporation treated may have. You may lose certain tax specific deductions (for example, the 

the items on its return. benefits if the corporation participated section 179 expense deduction). 

If the treatment on your original or in, or cooperated with, an 

Generally, specific limitations apply 

amended return is inconsistent with international boycott. See Form 5713 before the basis, at-risk, and passive 

the corporation’s treatment, or if the and its instructions for details. loss limitations. 

Cat. No. 11521O

Basis Rules 

reported on Schedule K-1 adjusted, if To make the election, attach a 

Generally, the deduction for your 

the corporation made a charitable statement to your timely filed original 

share of aggregate losses and contribution of property, by 

or amended return that states you 

deductions reported on Schedule K-1 subtracting the property’s fair market agree to the carryover rule of 

is limited to the basis of your stock value and adding the property’s Regulations section 1.1367-1(g) and 

(determined with regard to 

adjusted basis. 

the name of the S corporation to 

distributions received during the tax 

which the rule applies. Once made, 

year) and loans from you to the 

the election applies to the year for 

corporation. For details and 

You may elect to decrease your which it is made and all future tax 

exceptions, see section 1366(d). The 

basis under (4) prior to decreasing years for that S corporation, unless 

basis of your stock is generally your basis under (3). If you make this the IRS agrees to revoke your 

figured at the end of the corporation’s election, any amount described under election. 

tax year. Any losses and deductions (3) that exceeds the basis of your The basis of each share of stock 

not allowed this year because of the stock and debt owed to you by the is increased or decreased (but not 

basis limit can be carried forward corporation is treated as an amount below zero) based on its pro rata 

indefinitely and deducted in a later described under (3) for the following share of the above adjustments. If the 

year subject to the basis limit for that tax year. 

total decreases in basis attributable to 

year. 

You are responsible for keeping 

the information needed to figure the 

basis of your stock in the corporation. Worksheet for Figuring a Shareholder’s 

Schedule K-1 provides information to Stock Basis Keep for Your Records 

help you figure your stock basis at the 

end of each corporate tax year. The 

basis of your stock (generally, its 

1. Your stock basis at the beginning of the year ........... 1. 

cost) is adjusted as follows and, Increases: 

except as noted, in the order listed. In 

addition, basis may be adjusted 

2. Money and your adjusted basis in property contributed to 

under other provisions of the Internal 

the corporation ................................ 2. 

Revenue Code. You can generally 

3. Your share of the corporation’s income (including 

use the Worksheet for Figuring a 

tax-exempt income) reduced by any amount included in 

Shareholder’s Stock Basis to figure 

income with respect to clean renewable energy, Midwestern 

your aggregate stock basis. tax credit, or (for bonds issued before October 4, 2008) 

1. Basis is increased by (a) all qualified zone academy bonds ..................... 3. 

income (including tax-exempt 

income) reported on Schedule K-1 

4. Other increases to basis, including your share of the excess 

and (b) the excess of the deduction 

of the deductions for depletion (other than oil and gas 

for depletion (other than oil and gas 

depletion) over the basis of the property subject to depletion 4. 

depletion) over the basis of the Decreases: 

property subject to depletion. 

5. Distributions of money and the fair market value of property 

You must report on your 

(excluding dividend distributions reportable on Form 

! return (if you are required to 

1099-DIV and distributions in excess of basis (the sum of 

CAUTION 

file one) any amount required 

lines 1 through 4)) .............................. 5. ( ) 

to be included in gross income for it 

to increase your basis. 

6. Enter: (a) your share of the corporation’s nondeductible 

expenses and the depletion deduction for any oil and gas 

Basis is not increased by 

property held by the corporation (but only to the extent your 

! income from discharge of your share of the property’s adjusted basis exceeds the 

CAUTION 

indebtedness in the S 

depletion deduction) or (b) if the election under Regulations 

corporation (nor by any amount 

section 1.1367-1(g) applies, your share of the corporation’s 

included in income with respect to 

deductions and losses (include your entire share of the 

clean renewable energy, Midwestern 

section 179 expense deduction even if your allowable 

tax credit, or (for bonds issued before section 179 expense deduction is smaller) adjusted, if the 

October 4, 2008) qualified zone 

corporation made a charitable contribution of property, by 

academy bonds). 

subtracting your share of the fair market value of the 

2. Basis is decreased by (a) contributed property and adding your share of the 

property distributions (including cash) property’s adjusted basis ......................... 6. ( ) 

made by the corporation reported on 

Schedule K-1, box 16, code D, minus 7. If the election under Regulations section 1.1367-1(g) 

(b) the amount of such distributions in applies, enter the amount from 6(a) above. Otherwise enter 

excess of the basis in your stock. 

the amount from 6(b) ............................ 7. ( ) 

3. Basis is decreased by (a) 8. Enter the smaller of (a) the excess, as of the beginning of 

nondeductible expenses and (b) the 

the tax year, of the amount you are owed for loans you 

depletion deduction for any oil and 

made to the corporation over your basis in those loans or 

gas property held by the corporation, 

(b) the sum of lines 1 through 7. This amount increases 

but only to the extent your share of your loan basis ................................ 8. ( ) 

the property’s adjusted basis exceeds 

that deduction. 

4. Basis is decreased by all 

deductible losses and deductions 

9. Your stock basis in the corporation at the end of the year. 

Combine lines 1 through 8 ........................ 9. 

-2- Instructions for Schedule K-1 (Form 1120S)

a share exceed that share’s basis, of holding mineral property does not 1. Trade or business activities in 

the excess reduces (but not below qualify for this exception. The which you materially participated. 

zero) the remaining bases of all other corporation should identify on an 2. Rental real estate activities in 

shares of stock in proportion to the attachment to Schedule K-1 any which you materially participated if 

remaining basis of each of those losses that are not subject to the you were a real estate professional 

shares. at-risk limitations. for the tax year. You were a real 

Basis of loans. The basis of your Generally, you are not at risk for estate professional only if you met 

loans to the corporation is generally amounts such as the following. both of the following conditions. 

the balance the corporation owes • The basis of your stock in the a. More than half of the personal 

you, adjusted for any reductions and corporation or the basis of your loans services you performed in trades or 

restorations of loan basis (see the to the corporation if the cash or other businesses were performed in real 

instructions for box 16, code E). Any property used to purchase the stock property trades or businesses in 

amounts described in (3) and (4) on or make the loans was from a source which you materially participated and 

page 2 not used to offset amounts in (a) covered by nonrecourse b. You performed more than 750 

(1) on page 2, or reduce your stock indebtedness (except for certain hours of services in real property 

basis, are used to reduce your loan qualified nonrecourse financing, as trades or businesses in which you 

basis (to the extent of such basis defined in section 465(b)(6)); (b) materially participated. 

prior to such reduction). 

protected against loss by a 

For purposes of this rule, each 

When determining your basis 

guarantee, stop-loss agreement, or 

interest in rental real estate is a 

in loans to the corporation, 

other similar arrangement; or (c) that 

! 

separate activity, unless you elect to 

CAUTION 

remember that: 

is covered by indebtedness from a 

treat all interests in rental real estate 

• Distributions do not reduce loan 

person who has an interest in the 

as one activity. For details on making 

basis, and 

activity or from a person related to a 

this election, see the Instructions for 

• Loans that a shareholder 

person (except you) having such an 

Schedule E (Form 1040). 

guarantees or co-signs are not part of 

interest, other than a creditor. 

• Any cash or property contributed to If you are married filing jointly, 

a shareholder’s loan basis. 

a corporate activity, or your interest in either you or your spouse must 

See section 1367 and its 

the corporate activity, that is (a) separately meet both of the above 

regulations for more details. 

covered by nonrecourse 

conditions, without taking into 

Worksheet instructions. For lines indebtedness (except for certain account services performed by the 

6 and 7, do not enter more than the qualified nonrecourse financing, as other spouse. 

aggregate sum of the preceding lines. defined in section 465(b)(6)); (b) A real property trade or business is 

Any excess of the amounts that protected against loss by a 

any real property development, 

would otherwise be entered on lines 6 guarantee, stop-loss agreement, or redevelopment, construction, 

and 7 without regard to this limit over other similar arrangement; or (c) that reconstruction, acquisition, 

the amounts actually entered on is covered by indebtedness from a conversion, rental, operation, 

those lines is a reduction to your person who has an interest in the management, leasing, or brokerage 

basis, if any, in loans you made to the activity or from a person related to a trade or business. Services you 

corporation (to the extent of such person (except you) having such an performed as an employee are not 

basis). Any portion of the excess not interest, other than a creditor. treated as performed in a real 

used to reduce your basis in stock 

Any loss from a section 465 

property trade or business unless you 

and loans is not deductible in the 

activity not allowed for this tax year 

owned more than 5% of the stock (or 

current year and is carried over to 

will be treated as a deduction 

more than 5% of the capital or profits 

next year and subject to that year’s 

allocable to the activity in the next tax 

interest) in the employer. 

basis limit. See the preceding 

year. 

3. The rental of a dwelling unit any 

instructions for more details. 

shareholder used for personal 

You should get a separate 

At-Risk Limitations 

purposes during the year for more 

statement of income, expenses, etc., 

than the greater of 14 days or 10% of 

Generally, you will have to complete for each activity from the corporation. 

the number of days that the residence 

Form 6198, At-Risk Limitations, to 

Passive Activity Limitations was rented at fair rental value. 

figure your allowable loss, if you 

Section 469 provides rules that limit 4. Activities of trading personal 

have: 

the deduction of certain losses and property for the account of owners of 

• A loss or other deduction from any 

credits. These rules apply to 

interests in the activities. 

activity carried on by the corporation 

as a trade or business or for the shareholders who: 

production of income, and 

• Are individuals, estates, or trusts, If you have a passive activity loss 

• Amounts in the activity for which and 

or credit, use Form 8582, Passive 

you are not at risk. 

• Have a passive activity loss or Activity Loss Limitations, to figure 

credit for the tax year. 

your allowable passive losses and 

The at-risk rules generally limit the 

Form 8582-CR, Passive Activity 

amount of loss and other deductions Generally, passive activities 

Credit Limitations, to figure your 

that you can claim to the amount you include: 

allowable passive credits. See the 

could actually lose (your economic 1. Trade or business activities in instructions for these forms for 

loss) in the activity. These losses and which you did not materially details. 

deductions include a loss on the participate and 

disposition of assets and the section 2. Activities that meet the 

If the corporation had more than 

179 expense deduction. However, if definition of rental activities under one activity, it will attach a statement 

you acquired your stock before 1987, Temporary Regulations section to your Schedule K-1 that identifies 

the at-risk rules do not apply to losses 1.469-1T(e)(3) and Regulations each activity (trade or business 

from an activity of holding real section 1.469-1(e)(3). 

activity, rental real estate activity, 

property placed in service before 

rental activity other than rental real 

1987 by the corporation. The activity Passive activities do not include: estate, etc.) and specifies the income 

Instructions for Schedule K-1 (Form 1120S) 

-3-

(loss), deductions, and credits from engineering, architecture, accounting, activity, report the income, 

each activity. actuarial science, performing arts, deductions, and losses from the 

Material participation. You must consulting, or any other trade or activity as indicated in these 

determine if you materially 

business in which capital is not a instructions. 

participated (a) in each trade or material income-producing factor. 2. If you have an overall loss (the 

business activity held through the 7. Based on all the facts and excess of deductions and losses, 

corporation and (b) if you were a real circumstances, you participated in the including any prior year unallowed 

estate professional (defined on page activity on a regular, continuous, and loss, over income) or credits from a 

3), in each rental real estate activity substantial basis during the tax year. passive activity, report the income, 

held through the corporation. All 

deductions, losses, and credits from 

Work counted toward material 

determinations of material 

all passive activities using the 

participation. Generally, any work 

participation are based on your 

Instructions for Form 8582 or Form 

that you or your spouse does in 

participation during the corporation’s 

8582-CR, to see if your deductions, 

connection with an activity held 

tax year. 

losses, and credits are limited under 

through an S corporation (where you the passive activity rules. 

Material participation standards for own your stock at the time the work is 

shareholders who are individuals are done) is counted toward material Special allowance for a rental real 

listed below. Special rules apply to participation. However, work in estate activity. If you actively 

certain retired or disabled farmers connection with the activity is not participated in a rental real estate 

and to the surviving spouses of counted toward material participation activity, you may be able to deduct up 

farmers. See the Instructions for if either of the following applies. to $25,000 of the loss (or credit 

Form 8582 for details. 

1. The work is not the type of work equivalent to a $25,000 deduction) 

Individuals. If you are an that owners of the activity would from the activity from nonpassive 

individual, you materially participated usually do and one of the principal income. This “special allowance” is 

in an activity only if one or more of purposes of the work that you or your an exception to the general rule 

the following apply. 

spouse does is to avoid the passive disallowing losses in excess of 

loss or credit limitations. 

income from passive activities. The 

1. You participated in the activity 

2. You do the work in your special allowance is not available if 

for more than 500 hours during the 

capacity as an investor and you are you were married, file a separate 

tax year. 

not directly involved in the day-to-day return for the year, and did not live 

2. Your participation in the activity 

operations of the activity. Examples apart from your spouse at all times 

for the tax year constituted 

of work done as an investor that during the year. 

substantially all the participation in 

the activity of all individuals (including would not count toward material 

Only individuals can actively 

individuals who are not owners of participation include: 

participate in a rental real estate 

interests in the activity). 

a. Studying and reviewing activity. However, a decedent’s estate 

3. You participated in the activity financial statements or reports on (including a qualified revocable trust 

for more than 100 hours during the operations of the activity, 

for which a section 645 election has 

tax year, and your participation in the b. Preparing or compiling been made) is treated as actively 

activity for the tax year was not less summaries or analyses of the participating for its tax years ending 

than the participation in the activity of finances or operations of the activity less than 2 years after the decedent’s 

any other individual (including for your own use, and 

death, if the decedent would have 

individuals who were not owners of c. Monitoring the finances or satisfied the active participation 

interests in the activity) for the tax operations of the activity in a 

requirement for the activity for the tax 

year. 

nonmanagerial capacity. 

year the decedent died. 

4. The activity was a significant 

Effect of determination. Income You are not considered to actively 

participation activity for the tax year, 

(loss), deductions, and credits from participate in a rental real estate 

and you participated in all significant 

an activity are nonpassive if you activity if, at any time during the tax 

participation activities (including 

determine that: 

year, your interest (including your 

activities outside the corporation) • You materially participated in a spouse’s interest) in the activity was 

during the year for more than 500 

trade or business activity of the less than 10% (by value) of all 

hours. A significant participation 

corporation, or 

interests in the activity. 

activity is any trade or business • You were a real estate professional 

activity in which you participated for 

Active participation is a less 

(defined on page 3) in a rental real 

more than 100 hours during the year 

stringent requirement than material 

estate activity of the corporation. 

and in which you did not materially 

participation. You may be treated as 

participate under any of the material If you determine that you did not actively participating if you 

participation tests (other than this materially participate in a trade or participated, for example, in making 

test). 

business activity of the corporation or management decisions or arranging 

5. You materially participated in if you have income (loss), deductions, for others to provide services (such 

the activity for any 5 tax years or credits from a rental activity of the as repairs) in a significant and bona 

(whether or not consecutive) during corporation (other than a rental real fide sense. Management decisions 

the 10 tax years that immediately estate activity in which you materially that can count as active participation 

precede the tax year. 

participated as a real estate 

include approving new tenants, 

6. The activity was a personal professional), the amounts from that deciding rental terms, approving 

service activity and you materially activity are passive. Report passive capital or repair expenditures, and 

participated in the activity for any 3 income (losses), deductions, and other similar decisions. 

tax years (whether or not 

credits as follows. 

Modified adjusted gross income 

consecutive) preceding the tax year. 1. If you have an overall gain (the limitation. The maximum special 

A personal service activity involves excess of income over deductions allowance that single individuals and 

the performance of personal services and losses, including any prior year married individuals filing a joint return 

in the fields of health, law, unallowed loss) from a passive can qualify for is $25,000. The 


maximum is $12,500 for married the corporation will identify the activity 4. Any other limitations that must 

individuals who file separate returns and all amounts relating to it on be taken into account at the 

and who lived apart at all times during Schedule K-1 or on an attachment. shareholder level in figuring taxable 

the year. The maximum special 

If you have net income subject to 

income (for example, the section 179 

allowance for which an estate can 

recharacterization under Temporary 

expense limitation). 

qualify is $25,000 reduced by the 

Regulations section 1.469-2T(f) and 

special allowance for which the 

For information on these 

Regulations section 1.469-2(f), report 

surviving spouse qualifies. 

provisions, see Limitations on 

such amounts according to the Losses, Deductions, and Credits 

If your modified adjusted gross Instructions for Form 8582. beginning on page 1. 

income (defined below) is $100,000 

or less ($50,000 or less if married If you have net income (loss), If you are an individual, and the 

filing separately), your loss is 

deductions, or credits from either of above limitations do not apply to the 

deductible up to the maximum special the following activities, treat such amounts shown on your Schedule 

allowance referred to in the preceding amounts as nonpassive and report K-1, take the amounts shown and 

paragraph. If your modified adjusted them as indicated in these 

report them on the lines of your tax 

gross income is more than $100,000 instructions. 

return as indicated in the summarized 

(more than $50,000 if married filing 1. The rental of a dwelling unit any reporting information shown on page 

separately), the special allowance is shareholder used for personal 2 of the Schedule K-1. If any of the 

limited to 50% of the difference purposes during the year for more above limitations apply, adjust the 

between $150,000 ($75,000 if than the greater of 14 days or 10% of amounts on Schedule K-1 before you 

married filing separately) and your the number of days that the residence report them on your return. 

modified adjusted gross income. was rented at fair rental value. 

When applicable, the passive 

When modified adjusted gross 

2. Trading personal property for activity limitations on losses are 

income is $150,000 or more ($75,000 the account of owners of interests in applied after the limitations on losses 

or more if married filing separately), the activity. 

for a shareholder’s basis in stock and 

there is no special allowance. 

debt and the shareholder’s at-risk 

Self-charged interest. The 

Modified adjusted gross income is 

amount. 

corporation will report any 

your adjusted gross income figured 

“self-charged” interest income or The line numbers in the 

without taking into account the 

expense that resulted from loans summarized reporting information on 

following amounts, if applicable. 

between you and the corporation (or page 2 of Schedule K-1 are 

• Any passive activity loss. 

between the corporation and another references to forms in use for 

• Any rental real estate loss allowed 

S corporation or partnership if both calendar year 2010. If you file your 

under section 469(c)(7) to real estate 

entities have the same owners with tax return on a calendar year basis, 

professionals (defined on page 3). 

the same proportional interest in each but the corporation files a return for a 

• Any overall loss from a 

entity). If there was more than one fiscal year, report the amounts on 

publicly-traded partnership. 

activity, the corporation will provide a your tax return for the year in which 

• Any taxable social security or 

statement allocating the interest the corporation’s fiscal year ends. For 

equivalent railroad retirement 

income or expense with respect to example, if the corporation’s tax year 

benefits. 

each activity. The self-charged ends in February 2011, report the 

• Any deductible contributions to an 

interest rules do not apply to your amounts on your 2011 tax return. 

IRA or certain other qualified 

interest in the S corporation if the If you have losses, deductions, or 

retirement plans under section 219. 

corporation made an election under credits from a prior year that were not 

• The domestic production activities 

Regulations section 1.469-7(g) to deductible or usable because of 

deduction. 

avoid the application of these rules. certain limitations, such as the basis 

• The student loan interest 

See the Instructions for Form 8582 rules or the at-risk limitations, take 

deduction. 

for details. 

them into account in determining your 

• The tuition and fees deduction. 

income, loss, or credits for this year. 

• The deduction for one-half of 

However, except for passive activity 

self-employment taxes. 

losses and credits, do not combine 

• The exclusion from income of Specific Instructions the prior-year amounts with any 

interest from Series EE or I U.S. 

amounts shown on this Schedule K-1 

Savings Bonds used to pay higher 

Part III. Shareholder’s to get a net figure to report on your 

education expenses. 

return. Instead, report the amounts on 

• The exclusion of amounts received Share of Current Year 

your return on a year-by-year basis. 

under an employer’s adoption 

assistance program. Income, Deductions, 

If you have amounts other 

Credits, and Other Items 

than those shown on 

Commercial revitalization 

CAUTION 

deduction. The special $25,000 The amounts shown in boxes 1 

Schedule K-1 to report on 

allowance for the commercial 

through 17 reflect your share of Schedule E (Form 1040), enter each 

revitalization deduction from rental income, loss, deductions, credits, item separately on line 28 of 

real estate activities is not subject to etc., from corporate business or Schedule E (Form 1040). 

the active participation rules or rental activities without reference to Codes. In box 10 and boxes 12 

modified adjusted gross income limits limitations on losses, credits, or other through 17, the corporation will 

discussed above. See the instructions items that may have to be adjusted identify each item by entering a code 

for box 12, code N for more 

because of: 

in the column to the left of the dollar 

information. 

1. The adjusted basis of your amount entry space. These codes are 

Special rules for certain other stock and debt in the corporation, identified on page 2 of Schedule K-1 

activities. If you have net income 2. The at-risk limitations, 

and in these instructions. 

(loss), deductions, or credits from any 3. The passive activity limitations, Attached statements. The 

activity to which special rules apply, or corporation will enter an asterisk (*) 


-5- 

!

after the code, if any, in the column to determine where to report a box 2 Portfolio Income 

the left of the dollar amount entry amount. 

Portfolio income or loss (shown in 

space for each item for which it has 1. If you have a loss from a boxes 4 through 8b and in box 10, 

attached a statement providing passive activity in box 2 and you code A) is not subject to the passive 

additional information. For those meet all the following conditions, activity limitations. Portfolio income 

informational items that cannot be report the loss on Schedule E (Form includes income (not derived in the 

reported as a single dollar amount, 1040), line 28, column (f). ordinary course of a trade or 

the corporation will enter an asterisk 

a. You actively participated in the business) from interest, ordinary 

in the left column and enter “STMT” in 

corporate rental real estate activities. dividends, annuities, or royalties, and 

the dollar amount entry space to 

See Special allowance for a rental gain or loss on the sale of property 

indicate the information is provided 

real estate activity on page 4. that produces such income or is held 

on an attached statement. 

b. Rental real estate activities with for investment. 

active participation were your only 

Income (Loss) 

passive activities. 

Box 4. Interest Income 

c. You have no prior year 

Report interest income on line 8a of 

Box 1. Ordinary Business unallowed losses from these 

Form 1040. 

Income (Loss) activities. Box 5a. Ordinary Dividends 

The amount reported in box 1 is your d. Your total loss from the rental 

share of the ordinary income (loss) real estate activities was not more 

Report ordinary dividends on line 9a 

from trade or business activities of than $25,000 (not more than $12,500 

of Form 1040. 

the corporation. Generally, where you if married filing separately and you 

report this amount on Form 1040 

Box 5b. Qualified Dividends 

lived apart from your spouse all year). 

depends on whether the amount is Report any qualified dividends on line 

e. If you are a married person 

from an activity that is a passive 

9b of Form 1040. 

filing separately, you lived apart from 

activity to you. If you are an individual your spouse all year. 

Note. Qualified dividends are 

shareholder filing a 2010 Form 1040, 

f. You have no current or prior 

excluded from investment income, 

find your situation below and report 

year unallowed credits from a passive 

but you may elect to include part or 

your box 1 income (loss) as 

activity. 

all of these amounts in investment 

instructed after applying the basis 

income. See the instructions for line 

and at-risk limitations on losses. If the g. Your modified adjusted gross 4g of Form 4952, Investment Interest 

corporation had more than one trade income was not more than $100,000 Expense Deduction, for important 

or business activity, it will attach a (not more than $50,000 if married information on making this election. 

statement identifying the income or filing separately and you lived apart 

loss from each activity. 

from your spouse all year). 

Box 6. Royalties 

1. Report box 1 income (loss) 2. If you have a loss from a Report royalties on Schedule E (Form 

from corporate trade or business passive activity in box 2 and you do 1040), line 4. 

activities in which you materially not meet all the conditions in 1 above, 

participated on Schedule E (Form follow the Instructions for Form 8582 Box 7. Net Short-Term 

1040), line 28, column (h) or (j). to figure how much of the loss you Capital Gain (Loss) 

2. Report box 1 income (loss) can report on Schedule E (Form Report the net short-term capital gain 

from corporate trade or business 1040), line 28, column (f). 

(loss) on Schedule D (Form 1040), 

activities in which you did not 3. If you were a real estate line 5. 

materially participate, as follows. professional and you materially 

a. If income is reported in box 1, participated in the activity, report box Box 8a. Net Long-Term 

report the income on Schedule E 2 income (loss) on Schedule E (Form Capital Gain (Loss) 

(Form 1040), line 28, column (g). 1040), line 28, column (h) or (j). 

Report the net long-term capital gain 

b. If a loss is reported in box 1, 4. If you have income from a (loss) on Schedule D (Form 1040), 

follow the Instructions for Form 8582 passive activity in box 2, report the line 12. 

to figure how much of the loss can be income on Schedule E (Form 1040), 

reported on Schedule E (Form 1040), line 28, column (g). Box 8b. Collectibles (28%) 

line 28, column (f). 

Gain (Loss) 

Box 3. Other Net Rental Report collectibles gain or loss on line 

Box 2. Net Rental Real Estate Income (Loss) 

4 of the 28% Rate Gain 

Income (Loss) Worksheet—Line 18 in the 

The amount in box 3 is a passive Instructions for Schedule D (Form 

Generally, the income (loss) reported activity amount for all shareholders. If 1040). 

in box 2 is a passive activity amount the corporation had more than one 

for all shareholders. However, the rental activity, it will attach a Box 8c. Unrecaptured 

income (loss) in box 2 is not from a statement identifying the income or Section 1250 Gain 

passive activity if you were a real loss from each activity. Report the 

estate professional (defined on page income or loss as follows. 

There are three types of 

3) and you materially participated in unrecaptured section 1250 gain. 

1. If box 3 is a loss, follow the 

the activity. If the corporation had Report your share of this 

Instructions for Form 8582 to figure 

more than one rental real estate unrecaptured gain on the 

how much of the loss can be reported 

activity, it will attach a statement Unrecaptured Section 1250 Gain 

on Schedule E (Form 1040), line 28, 

identifying the income or loss from Worksheet—Line 19 in the 

column (f). 

each activity. 

Instructions for Schedule D (Form 

2. If income is reported in box 3, 1040) as follows. 

If you are filing a 2010 Form 1040, report the income on Schedule E • Report unrecaptured section 1250 

use the following instructions to (Form 1040), line 28, column (g). gain from the sale or exchange of the 


corporation’s business assets on line statement will also report your share extent of winnings on Schedule A 

5. of any “excess inclusion” that you (Form 1040), line 28. 

• Report unrecaptured section 1250 report on Schedule E (Form 1040), 2. If the corporation was engaged 

gain from the sale or exchange of an line 38, column (c), and your share of in the trade or business of gambling, 

interest in a partnership on line 10. section 212 expenses that you report (a) report gambling winnings on line 

• Report unrecaptured section 1250 on Schedule E (Form 1040), line 38, 28 of Schedule E (Form 1040) and 

gain from an estate, trust, regulated column (e). If you itemize your (b) deduct gambling losses (to the 

investment company (RIC), or real deductions on Schedule A (Form extent of winnings) on Schedule E 

estate investment trust (REIT) on line 1040), you may also deduct these (Form 1040), line 28, column (h). 

11. section 212 expenses as a • Gain (loss) from the disposition of 

If the corporation reports only miscellaneous deduction subject to an interest in oil, gas, geothermal, or 

unrecaptured section 1250 gain from the 2% limit on Schedule A (Form other mineral properties. The 

the sale or exchange of its business 1040), line 23. 

corporation will attach a statement 

assets, it will enter a dollar amount in Code B. Involuntary conversions. that provides a description of the 

box 8c. If it reports the other two This is your net loss from involuntary property, your share of the amount 

types of unrecaptured gain, it will conversions due to casualty or theft. realized from the disposition, your 

provide an attached statement that The corporation will give you a share of the corporation’s adjusted 

shows the amount for each type of schedule that shows the amounts to basis in the property (for other than 

unrecaptured section 1250 gain. be reported on Form 4684, oil or gas properties), and your share 

Casualties and Thefts, line 37, of the total intangible drilling costs, 

Box 9. Net Section 1231 Gain columns (b)(i), (b)(ii), and (c). development costs, and mining 

(Loss) 

If there was a gain (loss) from a 

exploration costs (section 59(e) 

The amount in box 9 is generally casualty or theft to property not used 

expenditures) passed through for the 

passive if it is from a: 

in a trade or business or for 

property. You must figure your gain or 

• Rental activity, or 

income-producing purposes, the loss from the disposition by 

• Trade or business activity in which corporation will provide you with the increasing your share of the adjusted 

you did not materially participate. information you need to complete basis by the intangible drilling costs, 

However, an amount from a rental Form 4684. 

development costs, or mine 

real estate activity is not from a 

exploration costs for the property that 

Code C. Section 1256 contracts 

passive activity if you were a real 

you capitalized (that is, costs that you 

and straddles. The corporation will 

estate professional (defined on page 

did not elect to deduct under section 

report any net gain or loss from 

3) and you materially participated in 

59(e)). Report a loss in Part I of Form 

section 1256 contracts. Report this 

the activity. 

4797. Report a gain in Part III of 

amount on Form 6781, Gains and Form 4797 in accordance with the 

If the amount is either (a) a loss Losses From Section 1256 Contracts instructions for line 28. See 

that is not from a passive activity or and Straddles. 

Regulations section 1.1254-4 for 

(b) a gain, report it on Form 4797, line Code D. Mining exploration costs details. 

2, column (g). Do not complete recapture. The corporation will give • Net short-term capital gain (loss) 

columns (b) through (f) on line 2 of you a schedule that shows the and net long-term capital gain (loss) 

Form 4797. Instead, enter “From information needed to recapture from Schedule D (Form 1120S) that 

Schedule K-1 (Form 1120S)” across certain mining exploration costs is not portfolio income. An example is 

these columns. (section 617). See Pub. 535 for gain or loss from the disposition of 

If the amount is a loss from a details. nondepreciable personal property 

passive activity, see Passive Loss 

Code E. Other income (loss). used in a trade or business activity of 

Limitations in the Instructions for 

Amounts with code E are other items the corporation. Report total net 

Form 4797. Report the loss following 

of income, gain, or loss not included short-term gain (loss) on Schedule D 

the Instructions for Form 8582 to 

in boxes 1 through 9 or in box 10 (Form 1040), line 5. Report the total 

figure how much of the loss is 

using codes A through D. The net long-term gain (loss) on Schedule 

allowed on Form 4797. If the 

corporation should give you a D (Form 1040), line 12. 

corporation had net section 1231 gain 

description and the amount of your • Current year section 108(i) 

(loss) from more than one activity, it 

share for each of these items. cancellation of debt income. The 

will attach a statement that will 

corporation will provide your share of 

identify the section 1231 gain (loss) Report loss items that are passive the deferred amount that you must 

from each activity. 

activity amounts to you following the 

include in income in the current tax 

Instructions for Form 8582. 

Box 10. Other Income (Loss) 

year under section 108(i)(1) or 

Code E items may include the section 108(i)(5)(D)(i) or (ii). 

Code A. Other portfolio income following. • Gain from the sale or exchange of 

(loss). The corporation will report • Income from recoveries of tax qualified small business (QSB) stock 

portfolio income other than interest, benefit items. A tax benefit item is an (as defined in the Instructions for 

ordinary dividend, royalty, and capital amount you deducted in a prior tax Schedule D (Form 1040)) eligible for 

gain (loss) income, and attach a year that reduced your income tax. the partial section 1202 exclusion. 

statement to tell you what kind of Report this amount on Form 1040, The corporation should also give you 

portfolio income is reported. line 21, to the extent it reduced your (a) the name of the corporation that 

If the corporation held a residual tax. 

issued the QSB stock, (b) your share 

interest in a real estate mortgage • Gambling gains and losses. of the corporation’s adjusted basis 

investment conduit (REMIC), it will 1. If the corporation was not and sales price of the QSB stock, and 

report on the statement your share of engaged in the trade or business of (c) the dates the QSB stock was 

REMIC taxable income (net loss) that gambling, (a) report gambling bought and sold. The following 

you report on Schedule E (Form winnings on Form 1040, line 21 and additional limitations apply at the 

1040), line 38, column (d). The (b) deduct gambling losses to the shareholder level. 


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1. You must have held an interest date the QSB stock was sold by the 50% AGI limitation, on line 16 of 

in the corporation when the corporation. Schedule A (Form 1040). 

corporation acquired the QSB stock See the Instructions for Schedule Code B. Cash contributions (30%). 

and at all times thereafter until the D (Form 1040) for details on how to Report this amount, subject to the 

corporation disposed of the QSB report the gain and the amount of the 30% AGI limitation, on line 16 of 

stock. allowable postponed gain. Schedule A (Form 1040). 

2. Your share of the eligible 

Code C. Noncash contributions 

section 1202 gain cannot exceed the Deductions 

(50%). If property other than cash is 

amount that would have been 

contributed, and if the claimed 

allocated to you based on your Box 11. Section 179 deduction for one item or group of 

interest in the corporation at the time Deduction similar items of property exceeds 

the QSB stock was acquired. 

Use this amount, along with the total $5,000, the corporation must give you 

See the Instructions for Schedule 

cost of section 179 property placed in a copy of Form 8283, Noncash 

D (Form 1040) for details on how to 

service during the year from other Charitable Contributions, to attach to 

report the gain and the amount of the 

sources, to complete Part I of Form your tax return. Do not deduct the 

allowable exclusion. 

4562, Depreciation and Amortization. amount shown on Form 8283. It is the 

• Gain eligible for section 1045 The corporation will report on an corporation’s contribution. Instead, 

rollover (replacement stock 

attached statement your share of the deduct the amount identified by code 

purchased by the corporation). The cost of any qualified enterprise zone, C, box 12, subject to the 50% AGI 

corporation should also give you (a) renewal community, qualified section limitation, on line 17 of Schedule A 

the name of the corporation that 179 Recovery Assistance, qualified (Form 1040). 

issued the qualified small business section 179 disaster assistance, or 

(QSB) stock, (b) your share of the 

If the corporation provides you with 

qualified real property it placed in 

corporation’s adjusted basis and 

information that the contribution was 

service during the tax year. Report 

sales price of the QSB stock, and (c) 

property other than cash and does 

the amount from line 12 of Form 4562 

the dates the QSB stock was bought 

not give you a Form 8283, see the 

allocable to a passive activity using 

and sold. To qualify for the section 

Instructions for Form 8283 for filing 

the Instructions for Form 8582. If the 

1045 rollover: 

requirements. Do not file Form 8283 

amount is not a passive activity unless the total claimed deduction for 

1. You must have held an interest deduction, report it on Schedule E all contributed items of property 

in the corporation during the entire (Form 1040), line 28, column (i). exceeds $500. 

period in which the corporation held 

the QSB stock (more than 6 months Box 12. Other Deductions Food inventory contributions. 

prior to the sale), and The corporation will report on an 

Contributions. Codes A through G. 

2. Your share of the gain eligible 

attached statement your share of 

The corporation will give you a 

for the section 1045 rollover cannot 

qualified food inventory contributions. 

schedule that shows charitable 

exceed the amount that would have 

The food inventory contribution is not 

contributions subject to the 100%, 

been allocated to you based on your 

included in the amount reported in 

50%, 30%, and 20% adjusted gross 

interest in the corporation at the time 

box 12 using code C. The corporation 

income limitations. 

the QSB stock was acquired. 

will also report your share of the 

If the corporation made a property corporation’s net income from the 

See the Instructions for Schedule 

contribution, it will report on an business activities that made the food 

D (Form 1040) for details on how to 

attached statement your share of inventory contribution(s). Your 

report the gain and the amount of the 

both the fair market value and deduction for food inventory 

allowable postponed gain. 

adjusted basis of the property. Use contributions cannot exceed 10% of 

• Gain eligible for section 1045 these amounts to adjust your stock your aggregate net income for the tax 

rollover (replacement stock not basis (see page 2). If the corporation year from the business activities from 

purchased by the corporation). The made a qualified conservation which the food inventory contribution 

corporation should also give you (a) contribution, it will report the fair was made (including your share of 

the name of the corporation that market value of the underlying net income from partnership or S 

issued the qualified small business property before and after the 

corporation businesses that made 

(QSB) stock, (b) your share of the donation, the type of legal interest food inventory contributions). Report 

corporation’s adjusted basis and contributed, and a description of the the deduction, subject to the 50% AGI 

sales price of the QSB stock, and (c) conservation purpose furthered by limitation, on line 17 of Schedule A 

the dates the QSB stock was bought the donation. If the corporation made (Form 1040). 

and sold. To qualify for the section a contribution of real property located 

1045 rollover: 

Code D. Noncash contributions 

in a registered historic district, it will (30%). Report this amount, subject 

1. You must have held an interest report any information you will need to the 30% AGI limitation, on line 17 

in the corporation during the entire to take a deduction. of Schedule A (Form 1040). 

period in which the corporation held 

the QSB stock (more than 6 months 

For more details, see Pub. 526, Code E. Capital gain property to a 

prior to the sale), 

Charitable Contributions, and the 50% organization (30%). Report 

Instructions for Schedule A (Form 

2. Your share of the gain eligible 

this amount, subject to the 30% AGI 

1040). If your contributions are 

for the section 1045 rollover cannot 

limitation, on line 17 of Schedule A 

subject to more than one of the AGI 

exceed the amount that would have 

(Form 1040). See Special 30% Limit 

limitations, see Pub. 526. 

been allocated to you based on your 

for Capital Gain Property in Pub. 526. 

interest in the corporation at the time Charitable contribution deductions Code F. Capital gain property 

the QSB stock was acquired, and are not taken into account in figuring (20%). Report this amount, subject 

3. You must purchase other QSB your passive activity loss for the year. to the 20% AGI limitation, on line 17 

stock (as defined in the Instructions Do not enter them on Form 8582. of Schedule A (Form 1040). 

for Schedule D (Form 1040)) during Code A. Cash contributions (50%). Code G. Contributions (100%). 

the 60-day period that began on the Report this amount, subject to the The corporation will report your share 


of qualified conservation contributions costs can be amortized over a Code O. Reforestation expense 

of property used in agriculture or 10-year period. Intangible drilling and deduction. The corporation will 

livestock production. This contribution development costs can be amortized provide a statement that describes 

is not included in the amount reported over a 60-month period. The 

the qualified timber property for these 

in box 12 using code C. If you are a amortization periods begin with the reforestation expenses. The expense 

farmer or rancher, you qualify for a month in which such costs were paid deduction is limited to $10,000 

100% AGI limitation for this or incurred. 

($5,000 if married filing separately) 

contribution. Otherwise, your 

for each qualified timber property, 

deduction for this contribution is 

Make the election on Form 4562. including your share of the 

subject to a 50% AGI limitation. If you make the election, report the corporation’s expense and any 

Report this deduction on line 17 of current year amortization of section reforestation expenses you 

Schedule A (Form 1040). See Pub. 59(e) expenditures from Part VI of separately paid or incurred during the 

526 for more information on qualified Form 4562 on line 28 of Schedule E tax year. 

conservation contributions. 

(Form 1040). If you do not make the 

election, report the section 59(e)(2) If you did not materially participate 

Code H. Investment interest expenditures on line 28 of Schedule in the activity, use Form 8582 to 

expense. Enter this amount on E (Form 1040) and figure the 

figure the amount to report on 

Form 4952, line 1. 

resulting adjustment or tax preference Schedule E (Form 1040), line 28. If 

If the corporation has investment item (see Form 6251, Alternative you materially participated in the 

income or other investment expense, Minimum Tax—Individuals). Whether reforestation activity, report the 

it will report your share of these items you deduct the expenditures or elect deduction on line 28, column (h), of 

in box 17 using codes A and B. to amortize them, report the amount Schedule E (Form 1040). 

Include investment income and on a separate line in column (h) of Code P. Domestic production 

expenses from other sources to figure line 28 if you materially participated in activities information. The 

how much of your total investment the activity. If you did not materially corporation will provide you with a 

interest is deductible. 

participate, follow the Instructions for statement with information that you 

For more information on the Form 8582 to figure how much of the must use to figure the domestic 

special provisions that apply to deduction can be reported in column production activities deduction. Use 

investment interest expense, see (f). 

Form 8903, Domestic Production 

Form 4952 and Pub. 550. Activities Deduction, to figure this 

Code K. Deductions—portfolio deduction. For details, see the 

Code I. Deductions—royalty (2% floor). Amounts entered with Instructions for Form 8903. 

income. Enter deductions allocable code K are deductions that are clearly 

to royalties on Schedule E (Form and directly allocable to portfolio Code Q. Qualified production 

1040), line 18. For this type of income (other than investment activities income (QPAI). Report 

expense, enter “From Schedule K-1 interest expense and section 212 the QPAI reported to you by the 

(Form 1120S).” 

expenses from a REMIC). Generally, corporation (in box 12 of Schedule 

you should report these amounts on K-1) on line 7b of Form 8903. Report 

These deductions are not taken 

Schedule A (Form 1040), line 23. See any portion of QPAI attributable to 

into account in figuring your passive 

the Instructions for Schedule A (Form oil-related activities (identified on an 

activity loss for the year. Do not enter 

1040), lines 23 and 28, for details. attached statement) on line 7a. 

them on Form 8582. 

Code R. Employer’s Form W-2 

Code J. Section 59(e)(2) These deductions are not taken wages. Report the portion of Form 

expenditures. The corporation will into account in figuring your passive W-2 wages reported to you by the 

show on an attached statement the activity loss for the year. Do not enter corporation (in box 12 of Schedule 

type and the amount of qualified them on Form 8582. K-1) on line 17 of Form 8903. 

expenditures for which you may make 

a section 59(e) election. The 

Code L. Deductions—portfolio Code S. Other deductions. 

statement will also identify the (other). Generally, you should report Amounts with this code may include: 

property for which the expenditures these amounts on Schedule A (Form • Itemized deductions that Form 

were paid or incurred. If there is more 1040), line 28. See the Instructions 1040 filers report on Schedule A 

than one type of expenditure, the for Schedule A (Form 1040), lines 23 (Form 1040). 

amount of each type will also be and 28, for details. 

• Soil and water conservation and 

listed. endangered species recovery 

These deductions are not taken expenditures. See section 175 for 

If you deduct these expenditures in into account in figuring your passive limitations on the amount you are 

full in the current year, they are activity loss for the year. Do not enter allowed to deduct. 

treated as adjustments or tax them on Form 8582. • Expenditures for the removal of 

preference items for purposes of 

Code M. Preproductive period architectural and transportation 

alternative minimum tax. However, 

expenses. You may be able to barriers to the elderly and disabled 

you may elect to amortize these 

deduct these expenses currently or that the corporation elected to treat 

expenditures over the number of 

you may need to capitalize them as a current expense. The deductions 

years in the applicable period rather 

under section 263A. See Pub. 225, are limited by section 190(c) to 

than deduct the full amount in the 

Farmer’s Tax Guide, and Regulations $15,000 per year from all sources. 

current year. If you make this 

section 1.263A-4 for details. • Interest expense allocated to 

election, these items are not treated 

debt-financed distributions. The 

as adjustments or tax preference Code N. Commercial revitalization manner in which you report such 

items. deduction from rental real estate interest expense depends on your 

Under the election, you can deduct activities. Follow the Instructions use of the distributed debt proceeds. 

circulation expenditures ratably over for Form 8582 to figure how much of If the proceeds were used in a trade 

a 3-year period. Research and the deduction can be reported on or business activity, report the 

experimental expenditures and Schedule E (Form 1040), line 28, interest on line 28 of Schedule E 

mining exploration and development column (f). 

(Form 1040). In column (a) enter the 


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name of the corporation and “interest If the corporation is an eligible Instructions for Form 3468 for details. 

expense.” If you materially 

small business, the general business If the corporation is reporting 

participated in the trade or business credits you receive from the 

expenditures from more than one 

activity, enter the interest expense in corporation may be available to offset activity, the attached statement will 

column (h). If you did not materially tentative minimum tax and qualify for separately identify the expenditures 

participate in the activity, follow the a 5-year carryback. See the 

from each activity. 

Instructions for Form 8582 to figure attachment for box 17, code U, to find 

out if the corporation is an eligible 

Combine the expenditures (for 

the interest expense you can report in 

small business. For details, see the 

Form 3468 reporting) from box 13, 

column (f). See page 4 for a definition 

Instructions for Form 3800. 

code E, and from box 17, code C. 

of material participation. If the 

The expenditures related to rental 

proceeds were used in an investment 

In general, shareholders real estate activities (box 13, code E) 

activity, report the interest on Form 

TIP whose only source for credits are reported on Schedule K-1 

4952. If the proceeds are used for 

listed only on page 1 of Form separately from other qualified 

personal purposes, the interest is 

3800 are from pass-through entities rehabilitation expenditures (box 17, 

generally not deductible. 

are not required to complete the code C) because they are subject to 

• Contributions to a capital 

source credit form or attach it to Form different passive activity limitation 

construction fund (CCF). The 

3800. Instead, you can report this rules. See the Instructions for Form 

deduction for a CCF investment is not credit directly on page 1 of Form 8582-CR for details. 

taken on Schedule E (Form 1040). 3800. However, when applicable, all 

Instead, you subtract the deduction 

Code F. Other rental real estate 

shareholders must complete and 

from the amount that would normally 

credits. The corporation will identify 

attach the following credit forms to 

be entered as taxable income on line the type of credit and any other 

Form 3800. 

43 of Form 1040. In the margin to the information you need to figure these 

• Form 3468, Investment Credit (line 

left of line 43, enter ‘‘CCF’’ and the credits from rental real estate 

1a of Form 3800). 

amount of the deduction. 

activities (other than the low-income 

• Form 8864, Biodiesel and 

• Penalty on early withdrawal of 

housing credit and qualified 

Renewable Diesel Fuels Credit (line 

savings. Report this amount on Form rehabilitation expenditures). These 

1l of Form 3800). 

1040, line 30. 

credits may be limited by the passive 

Codes A, B, C, and D. Low-income activity limitations. If the credits are 

• Film and television production housing credit. If section 42(j)(5) from more than one activity, the 

expenses. The corporation will applies, the corporation will report corporation will identify the credits 

provide a statement that describes your share of the low-income housing from each activity on an attached 

the film or television production credit using code A or code C, statement. See Passive Activity 

generating these expenses. depending on the date the building Limitations on page 3 and the 

Generally, if the aggregate cost of the was placed in service. If section Instructions for Form 8582-CR for 

production exceeds $15 million, you 42(j)(5) does not apply, your share of details. 

are not entitled to the deduction. The the credit will be reported using code 

limitation is $20 million for 

B or code D, depending on the date Code G. Other rental credits. The 

productions in certain areas (see the building was placed in service. corporation will identify the type of 

section 181 for details). If you did not Any allowable low-income housing credit and any other information you 

materially participate in the activity, credit reported using code A or code need to figure these rental credits. 

use Form 8582 to determine the B is reported on line 4 of Form 8586, These credits may be limited by the 

amount that can be reported on Low-Income Housing Credit, or line passive activity limitations. If the 

Schedule E (Form 1040), line 28, 1d of Form 3800 (see TIP on this credits are from more than one 

column (f). If you materially 

page). Any allowable low-income activity, the corporation will identify 

participated in the production activity, housing credit reported using code C the credits from each activity on an 

report the deduction on Schedule E or code D is reported on line 11 of attached statement. See Passive 

(Form 1040), line 28, column (h). Form 8586. 

Activity Limitations on page 3 and the 

• Current year section 108(i) original 

Instructions for Form 8582-CR for 

Keep a separate record of the 

issue discount deduction. The 

details. 

low-income housing credit from each 

corporation will provide your share of 

separate source so that you can Code H. Undistributed capital 

the corporation’s original issue 

correctly figure any recapture of gains credit. Code H represents 

discount deduction deferred under 

low-income housing credit that may taxes paid on undistributed capital 

section 108(i)(2)(A)(i) that is 

result from the disposition of all or gains by a regulated investment 

allowable as a deduction in the 

part of your stock in the corporation. company or real estate investment 

current tax year under section 

For more information on recapture, trust. Report these taxes on line 71 of 

108(i)(2)(A)(ii) or section 

see the instructions for Form 8611, Form 1040, check box “a” for Form 

108(i)(5)(D)(i) or (ii). 

Recapture of Low-Income Housing 2439, and enter “Form 1120S.” 

Credit. 

Reduce the basis of your stock by 

The corporation will give you a 

Code E. Qualified rehabilitation 

this tax. 

description and the amount of your 

share for each of these items. expenditures (rental real estate). Code I. Alcohol and cellulosic 

The corporation will report your share biofuel fuels credit. If this credit 

of the qualified rehabilitation 

includes the small ethanol producer 

Box 13. Credits expenditures and other information credit, the corporation will provide 

If you have credits that are passive you need to complete Form 3468 additional information on an attached 

activity credits to you, you must related to rental real estate activities statement. If no statement is 

complete Form 8582-CR in addition using code E. Your share of qualified attached, report this amount on line 8 

to the credit forms identified below. rehabilitation expenditures from of Form 6478, Alcohol and Cellulosic 

See Passive Activity Limitations on property not related to rental real Biofuel Fuels Credit. If a statement is 

page 3 and the Instructions for Form estate activities will be reported in attached, see the instructions for 

8582-CR for details. box 17 using code C. See the Form 6478, line 8. 


Code J. Work opportunity credit. credit from Part I and Part II of Form Box 14. Foreign 

Report this amount on line 3 of Form 8835. 

5884, Work Opportunity Credit. • Indian employment credit (Form Transactions 

Code K. Disabled access credit. 8845). 

Codes A through N. Use the 

Report this amount on line 7 of Form • Biodiesel and renewable diesel information identified by codes A 

8826, Disabled Access Credit, or line fuels credit. If this credit includes the 

through N, code Q, and any attached 

1e of Form 3800 (see TIP on page small agri-biodiesel producer credit, 

the corporation will provide additional 

schedules to figure your foreign tax 

10). 

information on an attached statement. credit. For details, see Form 1116, 

Code L. Empowerment zone and If no statement is attached, report this Foreign Tax Credit, and its separate 

renewal community employment amount on line 9 of Form 8864. If a instructions. Also see Pub. 514, 

credit. Report this amount on line 3 statement is attached, see the Foreign Tax Credit for Individuals. 

of Form 8844, Empowerment Zone instructions for Form 8864, line 9. 

and Renewal Community • New markets credit (Form 8874). Codes O and P. Extraterritorial 

Employment Credit. • Credit for small employer pension income exclusion. 

Code M. Credit for increasing plan startup costs (Form 8881). 1. Corporation did not claim the 

research activities. Report this • Credit for employer-provided exclusion. If the corporation reports 

amount on line 37 of Form 6765, childcare facilities and services (Form your share of foreign trading gross 

Credit for Increasing Research 8882). 

Activities, or line 1c of Form 3800 

receipts (code O) and the 

• Low sulfur diesel fuel production 

(see TIP on page 10). credit (Form 8896). 

extraterritorial income exclusion 

• Qualified railroad track 

(code P), the corporation was not 

Code N. Credit for employer social 

maintenance credit (Form 8900). entitled to claim the exclusion 

security and Medicare taxes. 

• Distilled spirits credit (Form 8906). because it did not meet the foreign 

Report this amount on line 5 of Form 

8846, Credit for Employer Social • Nonconventional source fuel credit economic process requirements. You 

Security and Medicare Taxes Paid on (Form 8907). 

may still qualify for your share of this 

Certain Employee Tips. 

• Energy efficient home credit (Form exclusion if the corporation’s foreign 

8908). 

trading gross receipts for the tax year 

Code O. Backup withholding. This 

is your share of the credit for backup • Energy efficient appliance credit were $5 million or less. To qualify for 

withholding on dividends, interest 

(Form 8909). 

this exclusion, your foreign trading 

income, and other types of income. • Alternative motor vehicle credit gross receipts from all sources for the 

Include this amount in the total you 

(Form 8910). tax year also must have been $5 

enter on Form 1040, line 61, and • Alternative fuel vehicle refueling million or less. If you qualify for the 

attach a copy of your Schedule K-1 to 

property credit (Form 8911). 

exclusion, report the exclusion 

your tax return. 

• Qualified zone academy bond amount in accordance with the 

credit. Report this amount on Form 

Code P. Other credits. On an instructions on page 6 for box 1, 2, or 

8912. 

attachment to Schedule K-1, the 

3, whichever applies. See Form 8873, 

• Clean renewable energy bond 

corporation will identify the type of credit. Report this amount on Form 

Extraterritorial Income Exclusion, for 

credit and any other information you 8912. 

details. 

need to figure credits other than • New clean renewable energy bond 2. Corporation claimed the 

those reported with codes A through credit. Report this amount on Form exclusion. If the corporation reports 

O. Most credits identified by code P 8912. your share of foreign trading gross 

will be reported on Form 3800 (see • Qualified forestry conservation receipts but not the amount of the 

TIP on page 10). bond credit. Report this amount on extraterritorial income exclusion, the 

Credits that may be reported with Form 8912. 

corporation met the foreign economic 

code P include the following. • Midwestern tax credit bond credit. process requirements and claimed 

• Unused investment credit from the Report this amount on Form 8912. the exclusion when figuring your 

qualifying advanced coal project • Qualified energy conservation share of corporate income. You also 

credit, qualifying gasification project bond credit. Report this amount on 

may need to know your share of 

credit, qualifying advanced energy Form 8912. 

foreign trading gross receipts from 

project credit or qualifying therapeutic • Build America bond credit. Report 

this amount on Form 8912. 

this corporation to determine if you 

discovery project credit allocated from 

cooperatives (Form 3468, line 9). • Qualified school construction bond 

met the $5 million or less exception 

• Unused investment credit from the credit. Report this amount on Form discussed above for purposes of 

rehabilitation credit or energy credit 8912. 

qualifying for an extraterritorial 

allocated from cooperatives (Form • Mine rescue team training credit income exclusion from other sources. 

3468, line 13). (Form 8923). 

Note. Upon request, the corporation 

• Employer retention and employer • Agricultural chemicals security should furnish you a copy of the 

housing credit for affected 

credit (Form 8931). 

corporation’s Form 8873 if there is a 

Midwestern disaster area employers • Credit for employer differential reduction for international boycott 

(Form 3800, line 1t ). 

wage payments (Form 8932). 

operations, illegal bribes, kickbacks, 

• New hire retention credit (Form • Carbon dioxide sequestration credit 

(Form 8933). 

etc. 

5884-B). 

• Orphan drug credit (Form 8820). • Qualified plug-in electric drive 

• Qualified plug-in electric vehicle motor vehicle credit (Form 8936). Code Q. Other foreign 

credit (Form 8834). 

• Credit for small employer health transactions. On an attachment to 

• Renewable electricity, refined coal, insurance premiums (Form 8941). Schedule K-1, the corporation will 

and Indian coal production credit. The • General credits from an electing report any other information on 

corporation will provide a statement large partnership. Report these foreign transactions that you may 

showing separately the amount of credits on Form 3800, line 1bb. need using code Q. 


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Box 15. Alternative 

Code C. Nondeductible expenses. 

The nondeductible expenses paid or 

Minimum Tax (AMT) incurred by the corporation are not from other qualified rehabilitation 

Items 

deductible on your tax return. expenditures (box 17, code C) 

estate activities (box 13, code E) are 

reported on Schedule K-1 separately 

Generally, you must decrease the because they are subject to different 

Use the information reported in box basis of your stock by this amount. passive activity limitation rules. See 

15 (as well as your adjustments and 

Code D. Property distributions. the Instructions for Form 8582-CR for 

tax preference items from other 

Reduce the basis of your stock (as details. 

sources) to prepare your Form 6251, 

Alternative Minimum 

explained on page 2) by distributions, Code D. Basis of energy property. 

Tax—Individuals, or Schedule I not reported on Form 1099-DIV, of If the corporation provides an 

(Form 1041), Alternative Minimum property or money. This amount will attached statement for code D, use 

Tax—Estates and Trusts. 

include any amounts included in the information on the statement to 

income with respect to new clean complete lines 12a-d, 12f, 12g, 12i, 

Code A. This amount is your share renewable energy, qualified energy 12j, 12l, 12m, 12o, and 12q-s of Form 

of the corporation’s post-1986 conservation, qualified forestry 3468. 

depreciation adjustment. If you are an conservation, qualified school 

individual shareholder, report this 

Codes E and F. Recapture of 

construction, build America, or (for 

amount on line 18 of Form 6251. low-income housing credit. The 

bonds issued after October 3, 2008) 

corporation will identify by code E 

Code B. This amount is your share qualified zone academy bonds. If 

your share of any recapture of a 

of the corporation’s adjusted gain or these distributions exceed the basis 

low-income housing credit from its 

loss. If you are an individual 

of your stock, the excess is treated as 

investment in partnerships to which 

shareholder, report this amount on capital gain from the sale or 

the provisions of section 42(j)(5) 

line 17 of Form 6251. 

exchange of property and is reported 

apply. All other recapture of 

on Schedule D (Form 1040). 

Code C. This amount is your share 

low-income housing credits will be 

of the corporation’s depletion 

Code E. Repayment of loans from identified by code F. 

adjustment. If you are an individual shareholders. If these payments 

are made on a loan with a reduced 

Keep a separate record of each 

shareholder, report this amount on 

basis, the repayments must be 

type of recapture so that you will be 

line 9 of Form 6251. 

allocated in part to a return of your 

able to correctly figure any credit 

Codes D and E. Oil, gas, & 

basis in the loan and in part to the 

recapture that may result from the 

geothermal properties—gross receipt of income. See Regulations 

disposition of all or part of your 

income and deductions. The section 1.1367-2 for information on 

corporate stock. For details, see 

amounts reported on these lines reduction in basis of a loan and 

Form 8611. 

include only the gross income (code restoration in basis of a loan with a Code G. Recapture of investment 

D) from, and deductions (code E) reduced basis. See Rev. Rul. 64-162, credit. The corporation will provide 

allocable to, oil, gas, and geothermal 1964-1 (Part 1) C.B. 304 and Rev. any information you need to figure 

properties included in box 1 of Rul. 68-537, 1968-2 C.B. 372, for your recapture tax on Form 4255, 

Schedule K-1. The corporation should details. 

Recapture of Investment Credit. See 

have attached a schedule that shows 

the Form 3468 on which you took the 

any income from or deductions Box 17. Other 

original credit for other information 

allocable to such properties that are you need to complete Form 4255. 

included in boxes 2 through 12, 16, Information 

You may also need Form 4255 if 

and 17 of Schedule K-1. Use the Code A. Investment income. your proportionate stock interest in 

amounts reported here and any other Report this amount on line 4a of Form the corporation is reduced by more 

reported amounts to help you figure 4952. than one-third after you were 

the net amount to enter on line 26 of 

Code B. Investment expenses. allocated part of an investment credit. 

Form 6251. 

Report this amount on line 5 of Form Code H. Recapture of other credits. 

Code F. Other AMT items. Enter 4952. On an attachment to Schedule K-1, 

the information on the statement 

Code C. Qualified rehabilitation the corporation will report any 

attached by the corporation on the 

expenditures (other than rental real information you need to figure the 

applicable lines of Form 6251 or 

estate). The corporation will report recapture of other credits including 

Schedule I (Form 1041). 

your share of qualified rehabilitation the new markets credit, qualified 

expenditures and other information plug-in electric vehicle credit, Indian 

Box 16. Items Affecting you need to complete Form 3468 for employment credit, credit for 

Shareholder Basis 

property not related to rental real employer-provided childcare facilities 

estate activities in box 17 using code and services, alternative motor 

Code A. Tax-exempt interest C. Your share of qualified 

vehicle credit, alternative fuel vehicle 

income. Report on your return, as rehabilitation expenditures related to refueling property credit, and qualified 

an item of information, your share of rental real estate activities is reported plug-in electric drive motor vehicle 

the tax-exempt interest received or in box 13 using code E. See the credit. 

accrued by the corporation during the Instructions for Form 3468 for details. Code I. Look-back 

year. Individual shareholders include If the corporation is reporting interest—completed long-term 

this amount on Form 1040, line 8b. expenditures from more than one contracts. The corporation will 

Generally, you must increase the activity, the attached statement will report any information you need to 

basis of your stock by this amount. separately identify the expenditures figure the interest due or to be 

Code B. Other tax-exempt income. from each activity. 

refunded under the look-back method 

Generally, you must increase the Combine the expenditures (for of section 460(b)(2) on certain 

basis of your stock by the amount Form 3468 reporting) from box 13, long-term contracts. Use Form 8697, 

shown, but do not include it in income code E and from box 17, code C. The Interest Computation Under the 

on your tax return. expenditures related to rental real Look-Back Method for Completed 


Long-Term Contracts, to report any separately report your share of all Code P. Interest allocable to 

such interest. payments received for the property in production expenditures. The 

Code J. Look-back 

the following tax years. See the Form corporation will report any information 

interest—income forecast method. 

6252 instructions for details. you need relating to interest you are 

The corporation will report any 

required to capitalize under section 

Code L. Recapture of section 179 

information you need to figure the 

263A for production expenditures. 

deduction. The corporation will 

interest due or to be refunded under 

See Regulations sections 1.263A-8 

report your share of any recapture of 

the look-back method of section 

through 1.263A-15 for details. 

section 179 expense deduction if 

167(g)(2) for certain property placed 

Code Q. CCF nonqualified 

business use of any property for 

in service after September 13, 1995, 

withdrawals. The corporation will 

which the section 179 expense 

and depreciated under the income 

report your share of nonqualified 

deduction was passed through to 

forecast method. Use Form 8866, 

withdrawals from a capital 

shareholders dropped to 50% or less 

Interest Computation Under the 

construction fund (CCF). These 

before the end of the recapture 

Look-Back Method for Property 

withdrawals are taxed separately 

period. If this occurs, the corporation 

Depreciated Under the Income 

from your other gross income at the 

must provide the following 

Forecast Method, to report any such 

highest marginal ordinary income or 

information. 

interest. 

capital gains tax rate. Attach a 

1. Your share of the depreciation statement to your federal income tax 

Code K. Dispositions of property allowed or allowable (not including return to show your computation of 

with section 179 deductions. The the section 179 expense deduction). both the tax and interest for a 

corporation will report your share of 2. Your share of the section 179 nonqualified withdrawal. Include the 

gain or loss on the sale, exchange, or expense deduction (if any) passed tax and interest on Form 1040, line 

other disposition of property for which through for the property and the 60. On the dotted line to the left of 

a section 179 expense deduction was corporation’s tax year(s) in which the line 60, enter the amount of tax and 

passed through to shareholders with amount was passed through. Reduce interest and “CCF.” 

code K. If the corporation passed this amount by the portion, if any, of 

through a section 179 expense 

Code R. Depletion information—oil 

your unused (carryover) section 179 

deduction for the property, you must 

and gas. This is your share of gross 

expense deduction for this property. 

report the gain or loss, if any, and any 

income from the property, share of 

recapture of the section 179 expense Code M. Section 453(l)(3) 

production for the tax year, etc., 

deduction for the property on your information. The corporation will needed to figure your depletion 

income tax return (see the 

report any information you need to deduction for oil and gas wells. The 

Instructions for Form 4797 for figure the interest due under section corporation should also allocate to 

details). The corporation will provide 453(l)(3) with respect to the 

you a proportionate share of the 

all the following information. 

disposition of certain timeshares and adjusted basis of each corporate oil 

residential lots on the installment or gas property. See Pub. 535 for 

1. Description of the property. 

method. If you are an individual, details on how to figure your 

2. Date the property was acquired 

report the interest on Form 1040, line depletion deduction. 

and placed in service. 

3. Date of the sale or other 60. Enter “453(l)(3)” and the amount Reduce the basis of your stock by 

disposition of the property. 

of the interest on the dotted line to the amount of this deduction up to the 

4. Your share of the gross sales the left of line 60. See section extent of your adjusted basis in the 

price or amount realized. 

453(l)(3) for details on how to figure property. 

5. Your share of the cost or other the interest. 

Code S. Amortization of 

basis plus the expense of sale. Code N. Section 453A(c) 

reforestation costs. The 

6. Your share of the depreciation information. The corporation will corporation will provide a statement 

allowed or allowable. 

report any information you need to identifying your share of the 

7. Your share of the section 179 figure the interest due under section amortizable basis of reforestation 

expense deduction (if any) passed 453A(c) with respect to certain expenditures paid or incurred before 

through for the property and the installment sales. If you are an October 23, 2004. The corporation 

corporation’s tax year(s) in which the individual, report the interest on Form will separately report your share of 

amount was passed through. 

1040, line 60. Enter “453A(c)” and the the amortizable basis of reforestation 

To figure the depreciation allowed amount of the interest on the dotted expenditures for 2003 and 2004. Your 

or allowable for Form 4797, line 22, line to the left of line 60. See section amortizable basis of reforestation 

add to the amount from item 6 above 453A(c) for details on how to figure expenditures for each tax year from 

the amount of your share of the the interest. 

all properties is limited to $10,000 

section 179 expense deduction, Code O. Section 1260(b) 

($5,000 if married filing separately), 

reduced by any unused carryover of information. The corporation will 

including your share of the 

the deduction for this property. This report any information you need to 

corporation’s expenditures and any 

amount may be different than the figure the interest due under section 

qualified reforestation expenditures 

amount of section 179 expense you 1260(b). If the corporation had gain 

you separately paid or incurred. To 

deducted for the property if your from certain constructive ownership 

figure your allowable amortization, 

interest in the corporation has transactions, your tax liability must be 

see section 194 and Pub. 535. 

changed. 

increased by the interest charge on Follow the Instructions for Form 

8. If the disposition is due to a any deferral of gain recognition under 8582 to report a deduction allocable 

casualty or theft, any information you section 1260(b). Report the interest to a passive activity. If you materially 

need to complete Form 4684. on Form 1040, line 60. Enter 

participated in the reforestation 

9. If the sale was an installment “1260(b)” and the amount of the activity, report the deduction on line 

sale made during the corporation’s interest on the dotted line to the left of 28, column (h), of Schedule E (Form 

tax year, any information you need to line 60. See section 1260(b) for 1040). 

complete Form 6252, Installment details, including how to figure the Code T. Section 108(i) information. 

Sale Income. The corporation will interest. If the corporation made a section 


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108(i) election, it will provide all the academy bonds issued before 11. Eligible small business credits. 

information you will need to October 4, 2008. Income with respect General business credits attributable 

determine your share of the following. 

• Deferred cancellation of debt 

to these qualified zone academy 

bonds cannot be used to increase 

to an eligible small business may be 

used to offset tentative minimum tax 

income. 

• Deferred original issue discount 

your stock basis. Because this 

amount is already included in income 

and qualify for a 5-year carryback. An 

S corporation is an eligible small 

deduction. elsewhere on Schedule K-1, you business if its average annual gross 

Code U. Other information. The must reduce your stock basis by this receipts for the three preceding tax 

corporation will report: 

amount. See line 3 of the worksheet years were $50 million or less. For a 

1. Any information you need to 

on page 2. 

credit received from the S corporation 

complete a disclosure statement for 

5. The amount included in gross to qualify as an eligible small 

reportable transactions in which the 

income with respect to clean 

business credit, both you and the 

corporation participates. If the 

renewable energy bonds. Income corporation must meet this gross 

corporation participates in a 

with respect to clean renewable receipts test. The corporation must 

transaction that must be disclosed on 

energy bonds cannot be used to tell you whether it qualifies as an 

Form 8886, Reportable Transaction 

increase your stock basis. Because eligible small business if it reports any 

Disclosure Statement, both you and 

this amount is already included in general business credits on Schedule 

the corporation may be required to 

income elsewhere on Schedule K-1, K-1. General business credits are 

file Form 8886 for the transaction. 

you must reduce your stock basis by reported using one or more of the 

The determination of whether you are 

this amount. See line 3 of the 

following boxes on Schedule K-1. 

required to disclose a transaction of 

worksheet on page 2. • Box 13. 

the corporation is based on the 

6. The amount included in gross • Box 17 using code C or D. 

category(s) under which the 

income with respect to Midwestern • Box 17 using Code U for items 

transaction qualifies for disclosure 

tax credit bonds. Income with respect (7) through (10) above. For more 

and is determined by the corporation. 

to Midwestern tax credit bonds information, see the Instructions for 

You may have to pay a penalty if you 

cannot be used to increase your Form 3800. 

are required to file Form 8886 and do 

stock basis. Because this amount is 12. Inversion gain. The corporation 

not do so. See the Instructions for 

already included in income elsewhere will provide a statement showing the 

Form 8886 for details. 

on Schedule K-1, you must reduce amounts of each type of income or 

2. Gross farming and fishing 

your stock basis by this amount. See gain that is included in inversion gain. 

income. If you are an individual 

line 3 of the worksheet on page 2. The corporation has included 

shareholder, report this income, as an 

7. Qualified investment in inversion gain in income elsewhere 

item of information, on Schedule E 

qualifying advanced coal project on Schedule K-1. Inversion gain is 

(Form 1040), Part V, line 42. Do not 

property. Use the amounts the also reported under code U because 

report this income elsewhere on Form 

corporation provides you to figure the your taxable income and alternative 

1040. 

amounts to report on Form 3468, minimum taxable income cannot be 

lines 5a, 5b, and 5c. 

less than the inversion gain. Also, 

For a shareholder that is an estate 8. Qualified investment in your inversion gain (a) is not taken 

or trust, report this income to the qualifying gasification property. Use into account in figuring the net 

beneficiaries, as an item of the amounts the corporation provides operating loss (NOL) for the tax year 

information, on Schedule K-1 (Form you to figure the amounts to report on or the NOL that can be carried over 

1041). Do not report it elsewhere on Form 3468, lines 6a and 6b. to each tax year, (b) may limit your 

Form 1041. 9. Qualified investment in credits, and (c) is treated as income 

3. Excess farm loss limitation. If qualifying advanced energy project from sources within the U.S. for the 

the corporation has deductions credit property. Use the amounts the foreign tax credit. See section 7874 

attributable to a farming activity, it will corporation provides you to figure the for details. 

provide a statement showing the amounts to report on Form 3468, line 13. Any other information you may 

aggregate gross income or gain and 7. need to file your return not shown 

the aggregate deductions from the 10. Qualified investment in a elsewhere on Schedule K-1. 

farming activity that you need to qualifying therapeutic discovery 

figure any excess farm loss limitation. 

The corporation should give you a 

project. Use the amounts the 

It will also provide information on any 

description and the amount of your 

corporation provides you to figure the 

applicable subsidy it receives that 

share for each of these items. 

amounts to report on Form 3468, line 

would trigger the excess farm loss 8. 

limitation. See section 461(j) and 

Pub. 225 for details. 

4. The amount included in gross 

income with respect to qualified zone

2010 Instruction 1120-S Schedule K-1 - Internal Revenue Service

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