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                                                                                                            Department of the Treasury
                                                                                                            Internal Revenue Service
2022

Partner’s Instructions for 

Schedule K-1 (Form 1065)

Partner's Share of Income, Deductions, Credits, etc.
(For Partner's Use Only)

Contents                                                               Page   IRA partners.  The partnership has entered the identifying number 
General Instructions   . . . . . . . . . . . . . . . . . . . . . . . . .   1  of the IRA custodian in item E. The partnership has entered the 
Worksheet for Adjusting the Basis of a Partner's                              identifying number of the IRA itself in box 20, code AH, if there is 
Interest in the Partnership          . . . . . . . . . . . . . . . . . .   4  unrelated business taxable income reported in box 20, code V. The 
                                                                              IRA partner uses this information in filing Form 990-T, Exempt 
Specific Instructions  . . . . . . . . . . . . . . . . . . . . . . . . .   7  Organization Business Income Tax Return.
Part I. Information About the Partnership            . . . . . . . . . .   7
Part II. Information About the Partner         . . . . . . . . . . . . .   7  Reminders
Part III. Partner's Share of Items . . . . . . . . . . . . . . . . .       8  Schedule K-3 (Form 1065).     Schedule K-3 replaced prior boxes 16 
Income (Loss)    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8  and 20 for certain international items on Schedule K-1. The 
                                                                              schedule was designed to provide greater clarity for partners on how 
Box 11. Other Income (Loss)          . . . . . . . . . . . . . . . . .     10 to compute their U.S. income tax liability with respect to items of 
Box 12. Section 179 Deduction          . . . . . . . . . . . . . . . .     12 international tax relevance, including claiming deductions and 
                                                                              credits.
Box 13. Other Deductions       . . . . . . . . . . . . . . . . . . . .     12
Box 14. Self-Employment Earnings (Loss)                . . . . . . . .     14 Box 21. Foreign taxes paid and accrued.      Box 21 replaced 
                                                                              information previously provided in box 16 for foreign taxes paid or 
Box 15. Credits  . . . . . . . . . . . . . . . . . . . . . . . . . . .     14 accrued with respect to basis adjustments and income 
Box 16. International Transactions           . . . . . . . . . . . . .     15 reconciliation.
Box 17. Alternative Minimum Tax (AMT) Items                  . . . . .     15 Section 743(b) adjustment.    Code U in box 20 is used to report the 
Box 18. Tax-Exempt Income and Nondeductible                                   total remaining section 743(b) adjustment for applicable partners. 
Expenses         . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16 This was reported in previous years in box 20, code AH.
Box 19. Distributions    . . . . . . . . . . . . . . . . . . . . . . .     16 Section 1061 reporting.  Section 1061 recharacterizes certain 
Box 20. Other Information      . . . . . . . . . . . . . . . . . . . .     17 long-term capital gains of a partner that holds one or more 
                                                                              applicable partnership interests as short-term capital gains. An 
List of Codes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    20 applicable partnership interest is an interest in a partnership that is 
Section references are to the Internal Revenue Code unless                    transferred to or held by a taxpayer, directly or indirectly, in 
otherwise noted.                                                              connection with the performance of substantial services by the 
                                                                              taxpayer or any other related person, in an applicable trade or 
                                                                              business. See Section 1061 Reporting Instructions in Pub 541, 
Future Developments                                                           Partnerships, for owner-taxpayer filing and reporting requirements.
For the latest information about developments related to                      Changed format of Schedule K-1. Schedule K-1 no longer has a 
Schedule K-1 (Form 1065) and the Partner's Instructions for                   page 2 with the list of codes. The list of codes and descriptions are 
Schedule K-1 (Form 1065), such as legislation enacted after they              provided under List of Codes and References Used in Schedule K-1 
were published, go to IRS.gov/Form1065.                                       (Form 1065) at the end of these instructions.

What’s New                                                                    General Instructions
Domestic partnerships treated as aggregates for purposes of 
sections 951, 951A, and 956(a).      Final regulations announced in           Purpose of Schedule K-1
Treasury Decision 9960 treat domestic partnerships as aggregates              The partnership uses Schedule K-1 to report your share of the 
of their partners for purposes of sections 951, 951A, and 956(a), and         partnership's income, deductions, credits, etc. Keep it for your 
any provision that specifically applies by reference to any of those          records. Don’t file it with your tax return unless you are specifically 
sections, for tax years of foreign corporations beginning on or after         required to do so. (See the instructions for Code O. Backup 
January 25, 2022, and for tax years of U.S. persons in which or with          withholding, later.) The partnership files a copy of Schedule K-1 
which such tax years of foreign corporations end. Domestic                    (Form 1065) with the IRS.
partnerships may apply the final regulations to tax years of foreign          For your protection, Schedule K-1 may show only the last four 
corporations beginning after December 31, 2017, and to tax years of           digits of your identifying number (social security number (SSN), 
the domestic partnership in which or with which such tax years of the         etc.). However, the partnership has reported your complete 
foreign corporations end, provided certain consistency requirements           identifying number to the IRS.
are met. See What's New in the 2022 Partner's Instructions for 
Schedule K-3 (Form 1065).                                                     Although the partnership generally isn't subject to income tax, 
                                                                              you may be liable for tax on your share of the partnership income, 
Line 16. International transactions new notice requirement.                If whether or not distributed. Include your share on your tax return if a 
box 16 is not checked, you should receive notification from the               return is required. Use these instructions to help you report the items 
partnership that you will not be receiving a Schedule K-3 unless you          shown on Schedule K-1 on your tax return.
request one.
                                                                              The amount of loss and deduction you may claim on your tax 
                                                                              return may be less than the amount reported on Schedule K-1. It is 

Jan 17, 2023                                                           Cat. No. 11396N

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the partner's responsibility to consider and apply any applicable Gain or loss from the disposition of your partnership interest
limitations. See Limitations on Losses, Deductions, and Credits, TIP may be net investment income under section 1411 and
later, for more information. could be subject to the net investment income tax. See
Form 8960, Net Investment Income Tax—Individuals, Estates, and
Inconsistent Treatment of Items Trusts, and its instructions for information about how to report and
If you are a partner in a partnership that has not elected out of the figure the tax due.
centralized partnership audit regime enacted by the Bipartisan
Budget Act of 2015 (BBA), you must report the items shown on your Three-year holding period requirement for applicable
Schedule K-1 (and any attached statements) the same way that the ! partnership interests. Section 1061 increases the required
partnership treated the items on its return. CAUTION long-term capital gains holding period for an applicable
partnership interest from more than 1 year to more than 3 years. The
If the treatment on your original or amended return is inconsistent holding period applies only to applicable partnership interests held in
with the partnership's treatment, or if the partnership was required to connection with the performance of services as defined in section
but has not filed a return, you must file Form 8082, Notice of 1061. See section 1061 and Pub. 541 for details.
Inconsistent Treatment or Administrative Adjustment Request
(AAR), with your original or amended return to identify and explain
any inconsistency (or to note that a partnership return has not been Nominee Reporting
filed). Any person who holds, directly or indirectly, an interest in a
partnership as a nominee for another person must furnish a written
If you are required to file Form 8082 but do not do so, you may be statement to the partnership by the last day of the month following
subject to the accuracy-related penalty. This penalty is in addition to the end of the partnership's tax year. This statement must include
any tax that results from making your amount or treatment of the the name, address, and identifying number of the nominee and such
item consistent with that shown on the partnership's return. Any other person; description of the partnership interest held as nominee
deficiency that results from making the amounts consistent may be for that person; and other information required by Temporary
assessed immediately. Regulations section 1.6031(c)-1T. A nominee that fails to furnish this
statement must furnish to the person for whom the nominee holds
Errors the partnership interest a copy of Schedule K-1 and related
If you believe the partnership has made an error on your information within 30 days of receiving it from the partnership.
Schedule K-1, notify the partnership and ask for a corrected
Schedule K-1. Do not change any items on your copy of A nominee who fails to furnish all the information required by
Schedule K-1. Be sure that the partnership sends a copy of the Temporary Regulations section 1.6031(c)-1T when due, or who
corrected Schedule K-1 to the IRS. furnishes incorrect information, is subject to a $290 penalty for each
failure. The maximum penalty is $3,532,500 for all such failures
Decedent’s Schedule K-1 during a calendar year. If the nominee intentionally disregards the
requirement to report correct information, each $290 penalty
If you are the executor of an estate and you have received a increases to $580 or, if greater, 10% of the aggregate amount of
decedent's Schedule K-1, then you have the responsibility to notify items required to be reported, and there is no limit to the amount of
the partnership of the name and taxpayer identification number (TIN) the penalty.
of the decedent's estate if the partnership interest is part of the
decedent's estate. If a decedent died in a prior year and the
partnership continues to send the decedent a Schedule K-1 after Definitions
being notified of the decedent's death, then you should request that
the partnership send a corrected Schedule K-1. If you receive an General Partner
interest in a partnership by reason of a former partner's death, you A general partner is a partner who is personally liable for partnership
must provide the partnership with your name and TIN. For treatment debts.
of partnership income upon the death of a partner, see Pub. 559,
Survivors, Executors, and Administrators. Limited Partner
A limited partner is a partner in a partnership formed under a state
Sale or Exchange of Partnership limited partnership law, whose personal liability for partnership debts
Interest is limited to the amount of money or other property that the partner
contributed or is required to contribute to the partnership. Some
Generally, a partner who sells or exchanges a partnership interest in members of other entities, such as domestic or foreign business
a section 751(a) exchange must notify the partnership, in writing, trusts or limited liability companies (LLCs) that are classified as
within 30 days of the exchange (or, if earlier, by January 15 of the partnerships, may be treated as limited partners for certain
calendar year following the calendar year in which the exchange purposes.
occurred). A “section 751(a) exchange” is any sale or exchange of a
partnership interest in which any money or other property received However, whether a partner qualifies as a limited partner for
by the partner in exchange for that partner's interest is attributable to purposes of self-employment tax depends upon whether the partner
unrealized receivables (as defined in section 751(c)) or inventory meets the definition of a limited partner under section 1402(a)(13).
items (as defined in section 751(d)).
The written notice to the partnership must include the names and Nonrecourse Loans
addresses of both parties to the exchange, the identifying numbers Nonrecourse loans are those liabilities of the partnership for which
of the transferor and (if known) of the transferee, and the exchange no partner or related person bears the economic risk of loss.
date.
Elections
An exception to this rule is made for sales or exchanges of
publicly traded partnership interests for which a broker is required to Generally, the partnership decides how to figure taxable income
file Form 1099-B, Proceeds From Broker and Barter Exchange from its operations. However, certain elections are made by you
Transactions. separately on your income tax return and not by the partnership.
These elections are made under the following code sections.
If a partner is required to notify the partnership of a section 751(a) • Section 59(e) (deduction of certain qualified expenditures ratably
exchange but fails to do so, the partner will be subject to a penalty over the period of time specified in that section). For details, see the
for each such failure. However, no penalty will be imposed if the instructions for code J in box 13.
partner can show that the failure was due to reasonable cause and • Section 108(b)(5) (election related to reduction of tax attributes
not willful neglect. due to exclusion from gross income of discharge of indebtedness).

-2- Partner's Inst. for Sch. K-1 (Form 1065) (2022)

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• Section 263A(d) (preproductive expenses). See the instructions Schedule K-1 any losses that are not subject to the at-risk
for code P in box 13. limitations.
• Section 617 (deduction and recapture of certain mining Generally, you are not at risk for amounts such as the following.
exploration expenditures). • Nonrecourse loans used to finance the activity, to acquire
• Section 901 (foreign tax credit). See Schedule K-3. property used in the activity, or to acquire your interest in the activity
that are not secured by your own property (other than the property
Additional Information used in the activity). See the instructions for item K, later, for the
For more information on the treatment of partnership income, exception for qualified nonrecourse financing secured by real
deductions, credits, and other items, see Pub. 535, Business property.
Expenses. • Cash, property, or borrowed amounts used in the activity (or
contributed to the activity, or used to acquire your interest in the
To get forms and publications, see the instructions for your tax activity) that are protected against loss by a guarantee, stop-loss
return or visit the IRS website at IRS.gov. agreement, or other similar arrangement (excluding casualty
insurance and insurance against tort liability).
Limitations on Losses, Deductions, • Amounts borrowed for use in the activity from a person who has
and Credits an interest in the activity, other than as a creditor, or who is related,
under section 465(b)(3), to a person (other than you) having such an
There are potential limitations on partnership losses that you can interest.
deduct on your return. These limitations and the order in which you
must apply them are as follows: the basis limitations, the at-risk You should get a separate statement of income, expenses, and
limitations, and the passive activity limitations. These limitations are other items for each activity from the partnership.
discussed below.
Note. Box 22 in Part III of Schedule K-1 (Form 1065) will be
Other limitations may apply to specific deductions (for example, checked when a statement is attached.
the section 179 expense deduction). Generally, specific limitations
apply before the at-risk and passive loss limitations. Passive Activity Limitations
Section 469 provides rules that limit the deduction of certain losses
Basis Limitations and credits. These rules apply to partners who:
Generally, you may not claim your share of a partnership loss • Are individuals, estates, trusts, closely held C corporations, or
(including a capital loss) to the extent that it is greater than the personal service corporations; and
adjusted basis of your partnership interest at the end of the • Have a passive activity loss or credit for the tax year.
partnership's tax year. Any losses and deductions not allowed this Generally, passive activities include the following.
year because of the basis limit can be carried forward indefinitely
and deducted in a later year subject to the basis limit for that year. 1. Trade or business activities in which you didn't materially
participate.
The partnership isn't responsible for keeping the information 2. Activities that meet the definition of rental activities under
needed to figure the basis of your partnership interest. Although the Temporary Regulations section 1.469-1T(e)(3) and Regulations
partnership does provide an analysis of the changes to your capital section 1.469-1(e)(3).
account in item L of Schedule K-1, that information is based on the
partnership's books and records and cannot be used to figure your Passive activities do not include the following.
basis. 1. Trade or business activities in which you materially
You can figure the adjusted basis of your partnership interest by participated.
adding items that increase your basis and then subtracting items 2. Rental real estate activities in which you materially
that decrease your basis. participated if you were a real estate professional for the tax year.
Use the Worksheet for Adjusting the Basis of a Partner’s Interest You were a real estate professional only if you met both of the
in the Partnership to figure the basis of your interest in the following conditions.
partnership. a. More than half of the personal services you performed in
trades or businesses were performed in real property trades or
For partnership tax years beginning after 2017, a partner's share businesses in which you materially participated.
of the adjusted basis in partnership charitable contributions (defined
in section 170(c)) and taxes, described in section 901, paid or b. You performed more than 750 hours of services in real
accrued to foreign countries and to possessions of the United States property trades or businesses in which you materially participated.
are subject to this basis limitation (defined in section 704(d)). For a closely held C corporation (defined in section 465(a)
For more details on the basis limitations, and special rules for TIP (1)(B)), the above conditions are treated as met if more than
charitable contributions and foreign taxes paid and accrued, see 50% of the corporation's gross receipts were from real
Pub. 541. property trades or businesses in which the corporation materially
participated.
At-Risk Limitations For purposes of this rule, each interest in rental real estate is a
Generally, if you have (a) a loss or other deduction from any activity separate activity, unless you elect to treat all interests in rental real
carried on as a trade or business or for the production of income by estate as one activity. For details on making this election, see the
the partnership, and (b) amounts in the activity for which you are not Instructions for Schedule E (Form 1040), Supplemental Income and
at risk, you will have to complete Form 6198, At-Risk Limitations, to Loss.
figure your allowable loss for the activity. If you are married filing jointly, either you or your spouse must
The at-risk rules generally limit the amount of loss and other separately meet both (a) and (b) of the above conditions, without
deductions that you can claim to the amount you could actually lose taking into account services performed by the other spouse.
in the activity. These losses and deductions include a loss on the A real property trade or business is any real property
disposition of assets and the section 179 expense deduction. development, redevelopment, construction, reconstruction,
However, if you acquired your partnership interest before 1987, the acquisition, conversion, rental, operation, management, leasing, or
at-risk rules do not apply to losses from an activity of holding real brokerage trade or business. Services you performed as an
property placed in service before 1987 by the partnership. The employee are not treated as performed in a real property trade or
activity of holding mineral property doesn't qualify for this exception. business unless you owned more than 5% of the stock (or more than
The partnership should identify on a statement attached to 5% of the capital or profits interest) in the employer.
Partner's Inst. for Sch. K-1 (Form 1065) (2022) -3-

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Worksheet for Adjusting the Basis of a Partner's Interest in the 
Partnership                                                                                                                                                  Keep for Your Records
1. Your adjusted basis at the end of the prior year. Do not enter less than zero. Enter -0- if this is your first tax year                     . . . . . . . . . . . . . . . .   1.  
    Increases:
2. Money and your adjusted basis in property contributed to the partnership less the associated liabilities (but not less than zero)                             . . . . . . .   2.  
3. Your increased share of or assumption of partnership liabilities. (Subtract your share of liabilities shown in item K of your 2021 
    Schedule K-1 from your share of liabilities shown in item K of your 2022 Schedule K-1 and add the amount of any partnership liabilities you                                      
    assumed during the tax year (but not less than zero).) .           . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3.
4a. Your share of the partnership's income or gain (including tax-exempt income) reduced by any amount included in 
    interest income with respect to the credit to holders of clean renewable energy bonds .                    . . . . . . . . . . . . . . . . .       4a. ____________
4b. Enter the amount of business interest expense included on 4a .               . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4b. ____________
4c. Add lines 4a and 4b. If the result is less than zero, include this amount on line 10 .               . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4c.  
5. Any gain recognized this year on contributions of property. Do not include gain from transfer of liabilities                      . . . . . . . . . . . . . . . . . . . . .   5.   
6. Your share of the excess of the deductions for depletion (other than oil and gas depletion) over the basis of the property subject to                                              
    depletion .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
    Decreases:
7. Withdrawals and distributions of money and the adjusted basis of property distributed to you from the partnership. Do not include the                                             
    amount of property distributions included in the partner's income (taxable income) .                   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7.
    Caution: A distribution may be taxable if the amount exceeds your adjusted basis of your partnership interest immediately before the 
    distribution.
8. Your decreased share of partnership liabilities and any decrease in your individual liabilities because they were assumed by the 
    partnership. (Subtract your share of liabilities shown in item K of your 2022 Schedule K-1 from your share of liabilities shown in item K of 
    your 2021 Schedule K-1 and add the amount of your individual liabilities that the partnership assumed during the tax year (but not less 
    than zero).)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8.  
9. Your share of the partnership's nondeductible expenses that are not capital expenditures (excluding business interest expense)                                  . . . . . .   9.   
10. Your share of the partnership's losses and deductions (including capital losses). However, include your share of the partnership's section 
    179 expense deduction for this year even if you cannot deduct all of it because of limitations. Include business interest expense as a                                            
    separate loss class. See first Note below. .       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10.
11. The amount of your deduction for depletion of any partnership oil and gas property, not to exceed your allocable share of the adjusted                                            
    basis of that property   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11.
12. Your adjusted basis in the partnership at the end of this tax year. (Add lines 1 through 6 and subtract lines 7 through 11 from the total. If                                     
    zero or less, enter -0-.)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12.
    Caution: The deduction for your share of the partnership's losses and deductions is limited to your adjusted basis in your partnership 
    interest. If you entered zero on line 12 and the amount figured for line 12 was less than zero, a portion of your share of the partnership 
    losses and deductions may not be deductible. (See Basis Limitations, earlier, for more information.) Also see Part III. Partner's Share of 
    Current Year Income, Deductions, Credits, and Other Items, later.
    Note: Include on line 10 business interest expense that was removed from the amount on line 4a. Business interest expense is considered 
    a separate loss class under Regulations section 1.163(j)-6(h)(1). However, to the extent basis is proportionately allocated to this loss 
    class, interest expense is absorbed by applying currently deductible business interest expense to basis first. Excess business interest 
    expense is applied to basis second. Excess business interest expense is only applicable to partnerships subject to section 163(j). In 
    addition, if a partnership has negative section 704(d) expense (interest expense that is limited by basis), negative section 704(d) expense 
    becomes excess business interest expense in the year that the basis limitation no longer applies. This is effective for tax years beginning 
    after November 12, 2020. 
    Note: Section 961(a) adjusted basis increases. Your adjusted basis may be increased under section 961(a) for amounts that you are 
    required to include in income with respect to a controlled foreign corporation (CFC) under sections 951(a) (for example, subpart F income) 
    and 951A (GILTI) because you are a U.S. shareholder of the CFC and you own (within the meaning of section 958(a)(2)) stock of the CFC 
    through the partnership. For purposes of section 951(a), if the partnership is a domestic partnership, then you will be treated as owning 
    (within the meaning of section 958(a)) stock of a CFC through the partnership (i) for a tax year of the foreign corporation that begins before 
    January 25, 2022, only if the partnership applies Regulations section 1.958-1(d)(1) to treat it as not owning stock of the foreign corporation 
    within the meaning of section 958(a) for purposes of section 951; and (ii) for any tax year of the foreign corporation that begins on or after 
    January 25, 2022. See the instructions for Schedule K-3 for more information on section 951(a) inclusions and section 951A inclusions.
    Section 961(b)(1) adjusted basis decreases. Your adjusted basis may be decreased under section 961(b)(1) by the sum of (1) the dollar 
    basis in previously taxed earnings and profits (PTEP) in your annual PTEP accounts that you exclude from your gross income under 
    section 959(a) by reason of a distribution made to the partnership; and (2) the dollar amount of any foreign income taxes allowed as a 
    credit under section 960(b) with respect to such PTEP.

3. Working interests in oil or gas wells if you were a general                                           rental real estate, and other activity) and specifies the income (loss), 
partner.                                                                                                 deductions, and credits from each activity.
4. The rental of a dwelling unit any partner used for personal 
purposes during the year for more than the greater of 14 days or                                         Note.       Box 23 in Part III of Schedule K-1 (Form 1065) will be 
10% of the number of days that the residence was rented at fair                                          checked when a statement is attached.
rental value.                                                                                            Material participation.                 You must determine if you materially 
5. Activities of trading personal property for the account of                                            participated (a) in each trade or business activity held through the 
owners of interests in the activities.                                                                   partnership, and (b) if you were a real estate professional (defined 
                                                                                                         earlier) in each rental real estate activity held through the 
If you are an individual, an estate, or a trust, and you have a                                          partnership. All determinations of material participation are based on 
passive activity loss or credit, use Form 8582, Passive Activity Loss                                    your participation during the partnership's tax year.
Limitations, to figure your allowable passive losses and Form 
8582-CR, Passive Activity Credit Limitations, to figure your allowable                                         Material participation standards for partners who are individuals 
passive credits. For a corporation, use Form 8810, Corporate                                             are listed below. Special rules apply to certain retired or disabled 
Passive Activity Loss and Credit Limitations. See the instructions for                                   farmers and to the surviving spouses of farmers. See the 
these forms for details.                                                                                 Instructions for Form 8582 for details.
                                                                                                               Corporations should refer to the Instructions for Form 8810 for 
If the partnership had more than one activity, it will attach a                                          the material participation standards that apply to them.
statement to your Schedule K-1 that identifies each activity (trade or 
business activity, rental real estate activity, rental activity other than 

                                                                                                   -4-                           Partner's Inst. for Sch. K-1 (Form 1065) (2022)

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Individuals (other than limited partners). If you are an passive. Report passive income (losses), deductions, and credits as
individual (either a general partner or a limited partner who owned a follows.
general partnership interest at all times during the tax year), you 1. If you have an overall gain (the excess of income over
materially participated in an activity only if one or more of the deductions and losses, including any prior year unallowed loss) from
following apply. a passive activity, report the income, deductions, and losses from
1. You participated in the activity for more than 500 hours the activity as indicated in these instructions.
during the tax year. 2. If you have an overall loss (the excess of deductions and
2. Your participation in the activity for the tax year constituted losses, including any prior year unallowed loss, over income) or
substantially all the participation in the activity of all individuals credits from a passive activity, report the income, deductions,
(including individuals who are not owners of interests in the activity). losses, and credits from all passive activities using the Instructions
3. You participated in the activity for more than 100 hours for Form 8582 or the Instructions for Form 8582-CR (or Form 8810),
during the tax year, and your participation in the activity for the tax to see if your deductions, losses, and credits are limited under the
year wasn't less than the participation in the activity of any other passive activity rules.
individual (including individuals who were not owners of interests in
the activity) for the tax year. Publicly traded partnerships (PTPs). The passive activity
limitations are applied separately for items (other than the
4. The activity was a significant participation activity for the tax low-income housing credit and the rehabilitation credit) from each
year, and you participated in all significant participation activities PTP. Thus, a net passive loss from a PTP may not be deducted from
(including activities outside the partnership) during the year for more other passive income. Instead, a passive loss from a PTP is
than 500 hours. A significant participation activity is any trade or suspended and carried forward to be applied against passive
business activity in which you participated for more than 100 hours income from the same PTP in later years. If the partner's entire
during the year and in which you didn't materially participate under interest in the PTP is completely disposed of, any unused losses are
any of the material participation tests (other than this test). allowed in full in the year of disposition.
5. You materially participated in the activity for any 5 tax years If you have an overall gain from a PTP, the net gain is nonpassive
(whether or not consecutive) during the 10 tax years that income. In addition, the nonpassive income is included in
immediately precede the tax year. investment income to figure your investment interest expense
6. The activity was a personal service activity and you deduction.
materially participated in the activity for any 3 tax years (whether or Do not report passive income, gains, or losses from a PTP on
not consecutive) preceding the tax year. A personal service activity Form 8582. Instead, use the following rules to figure and report on
involves the performance of personal services in the field of health, the proper form or schedule your income, gains, and losses from
law, engineering, architecture, accounting, actuarial science, passive activities that you held through each PTP you owned during
performing arts, consulting, or any other trade or business in which the tax year.
capital isn't a material income-producing factor.
1. Combine any current year income, gains, and losses, and
7. Based on all the facts and circumstances, you participated in any prior year unallowed losses to see if you have an overall gain or
the activity on a regular, continuous, and substantial basis during the loss from the PTP. Include only the same types of income and
tax year. losses you would include in your net income or loss from a non-PTP
Limited partners. If you are a limited partner, you must meet passive activity. See Pub. 925, Passive Activity and At-Risk Rules,
item 1, 5, or 6 above to qualify as having materially participated. for more details.
Work counted toward material participation. Generally, any 2. If you have an overall gain, the net gain portion (total gain
work that you or your spouse does in connection with an activity held minus total losses) is nonpassive income. On the form or schedule
through a partnership (where you own your partnership interest at you normally use, report the net gain portion as nonpassive income
the time the work is done) is counted toward material participation. and the remaining income and the total losses as passive income
However, work in connection with the activity isn't counted toward and loss. To the left of the entry space, enter “From PTP.” It is
material participation if either of the following applies. important to identify the nonpassive income because the nonpassive
1. The work isn't the type of work that owners of the activity portion is included in modified adjusted gross income for purposes
would usually do and one of the principal purposes of the work that of figuring on Form 8582 the “special allowance” for active
you or your spouse does is to avoid the passive loss or credit participation in a non-PTP rental real estate activity. In addition, the
limitations. nonpassive income is included in investment income when figuring
your investment interest expense deduction on Form 4952,
2. You do the work in your capacity as an investor and you are Investment Interest Expense Deduction.
not directly involved in the day-to-day operations of the activity.
Examples of work done as an investor that would not count toward Example. If you have Schedule E (Form 1040) income of
material participation include: $8,000, and a Form 4797, Sales of Business Property, prior year
unallowed loss of $3,500 from the passive activities of a particular
a. Studying and reviewing financial statements or reports on PTP, you have a $4,500 overall gain ($8,000 − $3,500). On
operations of the activity, Schedule E (Form 1040), line 28, report the $4,500 net gain as
b. Preparing or compiling summaries or analyses of the nonpassive income in column (k). In column (h), report the
finances or operations of the activity for your own use, and remaining Schedule E (Form 1040) gain of $3,500 ($8,000 −
c. Monitoring the finances or operations of the activity in a $4,500). On the appropriate line of Form 4797, report the prior year
non-managerial capacity. unallowed loss of $3,500. Be sure to enter “From PTP” to the left of
each entry space.
Effect of determination. Income (loss), deductions, and credits 3. If you have an overall loss (but didn't dispose of your entire
from an activity are nonpassive if you determine that: interest in the PTP to an unrelated person in a fully taxable
• You materially participated in a trade or business activity of the transaction during the year), the losses are allowed to the extent of
partnership, or the income, and the excess loss is carried forward to use in a future
• You were a real estate professional (defined earlier) in a rental year when you have income to offset it. Report as a passive loss on
real estate activity of the partnership. the schedule or form you normally use the portion of the loss equal
If you determine that you didn't materially participate in a trade or to the income. Report the income as passive income on the form or
business activity of the partnership or if you have income (loss), schedule you normally use.
deductions, or credits from a rental activity of the partnership (other
than a rental real estate activity in which you materially participated Example. You have a Schedule E (Form 1040) loss of $12,000
as a real estate professional), the amounts from that activity are (current year losses plus prior year unallowed losses) and a Form

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4797 gain of $7,200. Report the $7,200 gain on the appropriate line individuals filing a joint return can qualify for is $25,000. The
of Form 4797. On Schedule E (Form 1040), line 28, report $7,200 of maximum is $12,500 for married individuals who file separate
the losses as a passive loss in column (g). Carry forward the returns and who lived apart at all times during the year. The
unallowed loss of $4,800 ($12,000 − $7,200). maximum special allowance for which an estate can qualify is
If you have unallowed losses from more than one activity of the $25,000 reduced by the special allowance for which the surviving
PTP or from the same activity of the PTP that must be reported on spouse qualifies.
different forms, you must allocate the unallowed losses on a pro rata If your MAGI (defined below) is $100,000 or less ($50,000 or less
basis to figure the amount allowed from each activity or on each if married filing separately), your loss is deductible up to the
form. maximum special allowance referred to in the preceding paragraph.
If your MAGI is more than $100,000 (more than $50,000 if married
To allocate and keep a record of the unallowed losses, use filing separately), the special allowance is limited to 50% of the
TIP Parts VII, VIII, and IX of Form 8582. List each activity of the difference between $150,000 ($75,000 if married filing separately)
PTP in Part VII. Enter the overall loss from each activity in and your MAGI. When MAGI is $150,000 or more ($75,000 or more
column (a). Complete Part VII, column (b), according to its if married filing separately), there is no special allowance.
instructions. Multiply the total unallowed loss from the PTP by each
ratio in column (b) and enter the result in Part VII, column (c). Then, Modified adjusted gross income (MAGI). This is your adjusted
complete Part VIII if all the loss from the same activity is to be gross income (AGI) from Form 1040 or 1040-SR, line 11, figured
reported on one form or schedule. Use Part IX instead of Part VIII if without taking into account:
you have more than one loss to be reported on different forms or 1. The taxable amount of social security or equivalent tier 1
schedules for the same activity. Enter the net loss plus any prior year railroad retirement benefits,
unallowed losses in Part VIII, column (a) (or Part IX, if applicable). 2. The deductible contributions to traditional individual
The losses in Part VIII, column (c) (Part IX, column (e)) are the retirement accounts (IRAs) and section 501(c)(18) pension plans,
allowed losses to report on the forms or schedules. Report both
these losses and any income from the PTP on the forms and 3. The exclusion from income of interest from series EE or I
schedules you normally use. U.S. savings bonds used to pay higher education expenses,
4. The exclusion of amounts received under an employer's
4. If you have an overall loss and you disposed of your entire adoption assistance program,
interest in the PTP to an unrelated person in a fully taxable 5. Any passive activity income or loss included on Form 8582,
transaction during the year, your losses (including prior year
unallowed losses) allocable to the activity for the year are not limited 6. Any rental real estate loss allowed to real estate
by the passive loss rules. A fully taxable transaction is one in which professionals,
you recognize all your realized gain or loss. Report the income and 7. Any overall loss from a PTP (see Publicly Traded
losses on the forms and schedules you normally use. Partnerships (PTPs) in the Instructions for Form 8582),
For rules on the disposition of an entire interest reported 8. The deduction allowed for one-half of self-employment tax,
TIP using the installment method, see the Instructions for Form 9. The deduction allowed for interest paid on student loans, and
8582. 10. The deduction allowed for foreign-derived intangible income
and global intangible low-taxed income.
Special allowance for a rental real estate activity. If you
actively participated in a rental real estate activity, you may be able Special rules for certain other activities. If you have net income
to deduct up to $25,000 of the loss from the activity from nonpassive (loss), deductions, or credits from any activity to which special rules
income. This “special allowance” is an exception to the general rule apply, the partnership will identify the activity and all amounts
disallowing losses in excess of income from passive activities. The relating to it on Schedule K-1 or on an attached statement.
special allowance isn't available if you were married, file a separate If you have net income subject to recharacterization under
return for the year, and didn't live apart from your spouse at all times Temporary Regulations section 1.469-2T(f) and Regulations
during the year. sections 1.469-2(f)(5) and (6), report such amounts according to the
Only individuals, qualifying estates, and qualifying revocable Instructions for Form 8582 (or Form 8810).
trusts that made a section 645 election can actively participate in a If you have net income (loss), deductions, or credits from any of
rental real estate activity. Estates (other than qualifying estates), the following activities, treat such amounts as nonpassive and report
trusts (other than qualifying revocable trusts that made a section 645 them as indicated in these instructions.
election), and corporations cannot actively participate. Limited
partners cannot actively participate unless future regulations provide 1. Working interests in oil and gas wells if you are a general
an exception. partner.
You are not considered to actively participate in a rental real 2. The rental of a dwelling unit any partner used for personal
estate activity if, at any time during the tax year, your interest purposes during the year for more than the greater of 14 days or
(including your spouse's interest) in the activity was less than 10% 10% of the number of days that the residence was rented at fair
(by value) of all interests in the activity. rental value.
Active participation is a less stringent requirement than material 3. Trading personal property for the account of owners of
participation. You may be treated as actively participating if you interests in the activity.
participated, for example, in making management decisions or
arranging for others to provide services (such as repairs) in a Self-charged interest. The partnership will report any
significant and bona fide sense. Management decisions that can self-charged interest income or expense that resulted from loans
count as active participation include approving new tenants, between you and the partnership (or between the partnership and
deciding rental terms, approving capital or repair expenditures, and another partnership or S corporation if both entities have the same
other similar decisions. owners with the same proportional ownership interest in each
entity). If there was more than one activity, the partnership will
An estate is a qualifying estate if the decedent would have provide a statement allocating the interest income or expense with
satisfied the active participation requirement for the activity for the respect to each activity. The self-charged interest rules do not apply
tax year the decedent died. A qualifying estate is treated as actively to your partnership interest if the partnership made an election under
participating for tax years ending less than 2 years after the date of Regulations section 1.469-7(g) to avoid the application of these
the decedent's death. rules. See the Instructions for Form 8582 for details.
Modified adjusted gross income (MAGI) limitation. The
maximum special allowance that single individuals and married

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Excess Business Loss                                                         partnership during the tax year, item K should show the share that 
                                                                             existed immediately before the total disposition. A partner's 
Your distributive share of losses attributable to all of the                 “recourse liability” is any partnership liability for which a partner is 
partnership's trades or businesses may be limited under section              personally liable.
461(l). See Form 461, Limitation on Business Losses, and its 
instructions for more information.                                           If this partnership invested in other partnerships, item K will 
                                                                             include your share of partnership liabilities from those other 
                                                                             partnerships, except to the extent the liabilities from those other 
Specific Instructions                                                        partnerships are owed to this partnership.
                                                                             Use the total of the three amounts for figuring the adjusted basis 
Part I. Information About the                                                of your partnership interest.
Partnership                                                                  Generally, you may use only the amounts shown next to 
                                                                             “Qualified nonrecourse financing” and “Recourse” to figure your 
Item D                                                                       amount at risk. Do not include any amounts that are not at risk if 
If the box in item D is checked, you are a partner in a PTP and must         such amounts are included in either of these categories.
follow the rules discussed earlier under Publicly traded partnerships.       If your partnership is engaged in two or more different types of 
                                                                             activities subject to the at-risk provisions, or a combination of at-risk 
Part II. Information About the Partner                                       activities and any other activity, the partnership should give you a 
                                                                             statement showing your share of nonrecourse liabilities, 
Item E                                                                       partnership-level qualified nonrecourse financing, and other 
                                                                             recourse liabilities for each activity.
If the partner is an individual, the partnership will enter the partner's 
SSN or individual taxpayer identification number (ITIN). For all other       Qualified nonrecourse financing secured by real property used in 
partners, the partnership will enter the partner's employer                  an activity of holding real property that is subject to the at-risk rules 
identification number (EIN). In the case of a disregarded entity (DE),       is treated as an amount at risk. Qualified nonrecourse financing 
the partnership will enter the TIN of the beneficial owner of the DE in      generally includes financing for which no one is personally liable for 
item E and the beneficial owner's address in item F.                         repayment that is borrowed for use in an activity of holding real 
                                                                             property and that is loaned or guaranteed by a federal, state, or local 
If the partner is an IRA, the partnership will enter the identifying         government or borrowed from a qualified person.
number of the custodian of the IRA.
                                                                             Qualified persons include any persons actively and regularly 
For your protection, this form may show only the last four digits of         engaged in the business of lending money, such as a bank or 
the TIN in items E and H2, as noted under Purpose of Schedule K-1,           savings and loan association. Qualified persons generally do not 
earlier. However, the partnership has reported your complete                 include related parties (unless the nonrecourse financing is 
identification number to the IRS.                                            commercially reasonable and on substantially the same terms as 
                                                                             loans involving unrelated persons), the seller of the property, or a 
Item H2                                                                      person who receives a fee for the partnership's investment in the 
If the partner is a DE, such as a single-member LLC that did not             real property.
elect to be treated as a corporation, the partnership will check the 
DE box and enter the name and TIN of the DE.                                 See Pub. 925 for more information on qualified nonrecourse 
                                                                             financing.
Item J                                                                       Both the partnership and you must meet the qualified 
Generally, the amounts reported in item J are based on the                   nonrecourse rules on this debt before you can include the amount 
partnership agreement. If your interest commenced after the                  shown next to “Qualified nonrecourse financing” in your at-risk 
beginning of the partnership's tax year, the partnership will have           computation.
entered, in the Beginning column, the percentages that existed for 
you immediately after admission. If your interest terminated before          See Limitations on Losses, Deductions, and Credits, earlier, for 
the end of the partnership's tax year, the partnership will have             more information on the at-risk limitations.
entered, in the Ending column, the percentages that existed 
immediately before termination.                                              Item L
                                                                             The partnership must report your beginning capital account and 
The ending percentage share shown on the Capital line is the                 ending capital account for the year using the Tax Basis Method, 
portion of the capital you would receive if the partnership was              including the amount of capital you contributed to the partnership 
liquidated at the end of its tax year by the distribution of undivided       during the year, your share of the partnership's current year net 
interests in the partnership's assets and liabilities. If your capital       income or loss as computed for tax purposes, any withdrawals and 
account is negative or zero, the partnership will have entered zero          distributions made to you by the partnership, and any other 
on this line.                                                                increases or decreases to your capital account determined in a 
The "Check if decrease is due to sale or exchange of partnership             manner generally consistent with figuring the partner's adjusted tax 
interest" box will be checked if you sold or exchanged all or part of        basis in its partnership interest (without regard to partnership 
your partnership interest to a new or pre-existing partner during this       liabilities), taking into account the rules and principles of sections 
tax year, regardless of whether you recognized gain or loss on the           705, 722, 733, and 742. See the Instructions for Form 1065 for more 
transaction(s). You may have realized a gain or loss on the transfer         details.
or disposition of your interest. See codes AB, AC, and AD in box 20          For many reasons, your ending capital account as reported to 
for items that have special gain or loss treatment. For more                 you by the partnership in item L may not equal the adjusted tax basis 
information, see Disposition of Partner's Interest and Partnership           in your partnership interest. Generally, this is because a partner's 
Distributions in Pub. 541.                                                   adjusted tax basis in its partnership interest includes the partner's 
                                                                             share of partnership liabilities (and capital accounts determined by 
Item K                                                                       using the tax basis method do not). In addition, your partnership may 
Item K should show your share of the partnership's nonrecourse               not have all the necessary information from you to accurately figure 
liabilities, partnership-level qualified nonrecourse financing, and          the adjusted tax basis in your partnership interest due to 
other recourse liabilities at the beginning and the end of the               partner-level adjustments. You are responsible for maintaining an 
partnership's tax year. If you terminated your interest in the               annual record of the adjusted tax basis in your partnership interest 
Partner's Inst. for Sch. K-1 (Form 1065) (2022)                           -7-

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as determined under the principles and provisions of subchapter K, For information on these provisions, see Limitations on Losses,
including, for example, those under sections 705, 722, 733, and Deductions, and Credits, earlier.
742. Regulations section 1.705-1(a)(1) provides that a partner is
required to determine the adjusted basis of its interest in a Other limitations may apply to specific deductions (for example,
partnership when necessary to determine its tax liability or that of the section 179 expense deduction). Generally, specific limitations
any other person. For example, a determination is required in apply before the at-risk and passive loss limitations.
ascertaining the extent to which a partner's share of loss is allowed, If you are an individual and the passive activity rules do not apply
when there is a sale or exchange of all or part of a partnership to the amounts shown on your Schedule K-1, take the amounts
interest, and when a partner's entire partnership interest is shown and enter them on the appropriate lines of your tax return. If
liquidated. The adjusted basis of a partner's interest in a partnership the passive activity rules do apply, report the amounts shown as
is determined without regard to any amount shown in the partnership indicated in these instructions.
books as the partner's “capital,” “equity,” or similar account.
If you are not an individual, report the amounts in each box as
Item M instructed on your tax return.
If you have contributed property with a built-in gain or loss during the If you file your tax return on a calendar year basis, but your
tax year, the partnership will check the “Yes” box. Also, the partnership files a return for a fiscal year, report the amounts on your
partnership will attach a statement showing the property contributed, tax return for the year in which the partnership's fiscal year ends. For
the date of the contribution, and the amount of any built-in gain or example, if the partnership's tax year ends in February 2023, report
loss. A built-in gain or loss is the difference between the FMV of the the amounts on your 2023 tax return.
property and your adjusted basis in the property at the time it was
contributed to the partnership. If you contributed more than 10 If you have losses, deductions, or credits from a prior year that
properties on a single date during the tax year, the statement may were not deductible or usable because of certain limitations, such as
instead show the number of properties contributed on that date, the the basis limitations or the at-risk limitations, take them into account
total amount of built-in gain, and the total amount of built-in loss. in determining your net income, loss, or credits for this year.
However, except for passive activity losses and credits, do not
The partnership is providing this for your information. combine the prior year amounts with any amounts shown on this
Contributions of property with a built-in gain or loss could affect a Schedule K-1 to get a net figure to report on any supporting
partner's tax liability (in matters concerning precontribution gain or schedules, statements, or forms attached to your return. Instead,
loss, and distributions subject to section 737), and may also affect report the amounts on the attached schedule, statement, or form on
how the partnership allocated certain items on your Schedule K-1. a year-by-year basis.
For information on precontribution gain or loss, see the instructions If the partnership reports a section 743(b) adjustment to
for box 20, code W. For information on distributions subject to partnership items, report these adjustments as separate items on
section 737, see the instructions for box 19, code B. Form 1040 or 1040-SR in accordance with the reporting instructions
for the partnership item being adjusted. A section 743(b) adjustment
Item N increases or decreases your share of income, deduction, gain, or
If you are allocated a share of section 704(c) gain or loss, the loss for a partnership item. For example, if the partnership reports a
partnership will report your net unrecognized section 704(c) gain or section 743(b) adjustment to depreciation for property used in its
loss both at the beginning and at the end of the partnership's tax trade or business, report the adjustment on Schedule E (Form
year in item N. The partnership can use any reasonable method in 1040), line 28, in accordance with the instructions for box 1 of
reporting net unrecognized section 704(c) built-in gain or loss to you. Schedule K-1.
You will be allocated unrecognized section 704(c) gain or loss if:
• You contributed property with FMV in excess of adjusted tax If you have amounts other than those shown on
basis (built-in gain property); TIP Schedule K-1 to report on Schedule E (Form 1040), enter
• You contributed property with FMV less than adjusted tax basis each item separately on Schedule E (Form 1040), line 28.
(built-in loss property); or
• The partnership elected, under certain circumstances, to revalue Codes. In box 11, boxes 13 through 15, and boxes 17 through 20,
property (book-up or book-down) on its books to reflect changes in the partnership will identify each item by entering a code in the
the FMV of such property. These revaluations are sometimes column to the left of the dollar amount entry space. These codes are
referred to as reverse section 704(c) allocations. identified under List of Codes and References Used in Schedule K-1
(Form 1065) at the end of these instructions.
The partnership is providing this for your information. If the Attached statements. The partnership will enter an asterisk (*)
partnership disposes of the property or there are special allocations after the code, if any, in the column to the left of the dollar amount
due to depreciation, depletion, or amortization, the partnership will entry space for each item for which it has attached a statement
report these items on other parts of Schedule K-1. providing additional information. For those informational items that
Note. Although the partnership is reporting the beginning and can’t be reported as a single dollar amount, the partnership will enter
ending balances on an aggregate net basis, it is generally required an asterisk (*) in the left column and enter “STMT” in the dollar
to keep records of this information on a property-by-property basis. amount entry space to indicate the information is provided on an
attached statement.

Part III. Partner's Share of Current
Income (Loss)
Year Income, Deductions, Credits,
Box 1. Ordinary Business Income (Loss)
and Other Items The amount reported in box 1 is your share of the ordinary income
The amounts shown in boxes 1 through 21 reflect your share of (loss) from trade or business activities of the partnership. Generally,
income, loss, deductions, credits, and other items from partnership where you report this amount on Form 1040 or 1040-SR depends on
business or rental activities without reference to limitations on losses whether the amount is from an activity that is a passive activity to
or adjustments that may be required of you because of: you. If you are an individual partner filing a 2022 Form 1040 or
1. The adjusted basis of your partnership interest, 1040-SR, find your situation below and report your box 1 income
2. The amount for which you are at risk, and (loss) as instructed, after applying the basis and at-risk limitations on
losses. If the partnership had more than one trade or business
3. The passive activity limitations. activity, it will attach a statement identifying the income or loss from
each activity.

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1. Report box 1 income (loss) from partnership trade or 1. If box 3 is a loss, follow the Instructions for Form 8582 to
business activities in which you materially participated on figure how much of the loss can be reported on Schedule E (Form
Schedule E (Form 1040), line 28, column (i) or (k). 1040), line 28, column (g). However, if the box in item D is checked,
2. Report box 1 income (loss) from partnership trade or report the loss following the rules for Publicly traded partnerships,
business activities in which you didn't materially participate, as earlier.
follows. 2. If income is reported in box 3, report the income on
a. If income is reported in box 1, report the income on Schedule E (Form 1040), line 28, column (h). However, if the box in
Schedule E (Form 1040), line 28, column (h). However, if the box in item D is checked, report the income following the rules for Publicly
item D is checked, report the income following the rules for Publicly traded partnerships, earlier.
traded partnerships, earlier.
b. If a loss is reported in box 1, follow the Instructions for Form Box 4a. Guaranteed Payments for Services
8582 to figure how much of the loss can be reported on Schedule E Guaranteed payments are payments made by a partnership to a
(Form 1040), line 28, column (g). However, if the box in item D is partner that are determined without regard to the partnership's
checked, report the loss following the rules for Publicly traded income. Generally, amounts on this line are not passive income, and
partnerships, earlier. you should report them on Schedule E (Form 1040), line 28, column
(k) (for example, guaranteed payments for personal services).
Box 2. Net Rental Real Estate Income (Loss)
Generally, the income (loss) reported in box 2 is a passive activity Box 4b. Guaranteed Payments for Capital
amount for all partners. However, the income (loss) in box 2 isn't These are guaranteed payments other than for services, such as for
from a passive activity if you were a real estate professional (defined the use of capital or attributable to section 736(a)(2) payments for
earlier) and you materially participated in the activity. If the unrealized receivables or goodwill. Amounts on this line should be
partnership had more than one rental real estate activity, it will attach reported on Schedule E (Form 1040), line 28, column (k) (for
a statement identifying the income or loss from each activity. example, guaranteed payments for capital).

If you are filing a 2022 Form 1040 or 1040-SR, use the following Box 4c. Total Guaranteed Payments
instructions to determine where to report a box 2 amount. Amounts on this line include total guaranteed payments paid to you
1. If you have a loss from a passive activity in box 2 and you by the partnership.
meet all the following conditions, report the loss on Schedule E
(Form 1040), line 28, column (g). Portfolio Income
a. You actively participated in the partnership rental real estate Portfolio income or loss (shown in boxes 5 through 9b and in box 11,
activities. See Special allowance for a rental real estate activity, code A) isn't subject to the passive activity limitations. Portfolio
earlier. income includes income (not derived in the ordinary course of a
b. Rental real estate activities with active participation were trade or business) from interest, ordinary dividends, annuities or
your only passive activities. royalties, and gain or loss on the sale of property that produces such
c. You have no prior year unallowed losses from these income or is held for investment.
activities.
Box 5. Interest Income
d. Your total loss from the rental real estate activities wasn't
more than $25,000 (not more than $12,500 if married filing Report interest income on Form 1040 or 1040-SR, line 2b. If the
separately and you lived apart from your spouse all year). amount of interest income included in box 5 includes interest from
the credit for holders of clean renewable energy bonds, the
e. If you are a married person filing separately, you lived apart partnership will attach a statement to Schedule K-1 showing your
from your spouse all year. share of interest income from these credits. Because the basis of
f. You have no current or prior year unallowed credits from a your interest in the partnership has been increased by your share of
passive activity. the interest income from these credits, you must reduce your basis
g. Your MAGI wasn’t more than $100,000 (not more than by the same amount. See line 4 of the Worksheet for Adjusting the
$50,000 if married filing separately and you lived apart from your Basis of a Partner's Interest in the Partnership.
spouse all year).
Box 6a. Ordinary Dividends
h. Your interest in the rental real estate activity wasn't held as a
limited partner. Report ordinary dividends on Form 1040 or 1040-SR, line 3b.
2. If you have a loss from a passive activity in box 2 and you do Some of the amounts reported in this box may be attributable to
not meet all the conditions in (1) above, follow the Instructions for previously taxed earnings and profits (PTEP) in annual PTEP
Form 8582 to figure how much of the loss you can report on accounts that you have with respect to a foreign corporation and are
Schedule E (Form 1040), line 28, column (g). However, if the box in therefore excludable from your gross income. Do not include the
item D is checked, report the loss following the rules for Publicly amount attributable to PTEP in your annual PTEP accounts on Form
traded partnerships, earlier. 1040 or 1040-SR, line 3b. Use Schedule K-3, Part V, to determine
3. If you were a real estate professional and you materially your share of distributions by foreign corporations to the partnership
participated in the activity, report box 2 income (loss) on Schedule E that are attributable to PTEP in your annual PTEP accounts with
(Form 1040), line 28, column (i) or (k). respect to the foreign corporations.

4. If you have income from a passive activity in box 2, report the Box 6b. Qualified Dividends
income on Schedule E (Form 1040), line 28, column (h). However, if
the box in item D is checked, report the income following the rules Report any qualified dividends on Form 1040 or 1040-SR, line 3a.
for Publicly traded partnerships, earlier. Some of the amounts reported in this box may be attributable to
PTEP in annual PTEP accounts that you have with respect to a
Box 3. Other Net Rental Income (Loss) foreign corporation and are therefore excludable from your gross
The amount in box 3 is a passive activity amount for all partners. If income. Do not include the amount attributable to PTEP in your
the partnership had more than one rental activity, it will attach a annual PTEP accounts on Form 1040 or 1040-SR, line 3a. Use
statement identifying the income or loss from each activity. Report Schedule K-3, Part V, to determine your share of distributions by
the income or loss as follows. foreign corporations to the partnership that are attributable to PTEP
in your annual PTEP accounts with respect to the foreign
corporations.
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Qualified dividends are excluded from investment income, Box 10. Net Section 1231 Gain (Loss)
TIP but you may elect to include part or all of these amounts in
investment income. See the instructions for Form 4952, The amount in box 10 is generally passive if it is from a:
line 4g, for important information on making this election. • Rental activity, or
• Trade or business activity in which you didn't materially
If you have any foreign source qualified dividends, see the participate.
! Partner’s Instructions for Schedule K-3 for additional However, an amount from a rental real estate activity isn't from a
CAUTION information.
passive activity if you were a real estate professional (defined
earlier) and you materially participated in the activity.
Attach a statement to the Schedule K-1 identifying the dividends
included in box 6a or 6b that are: If the amount is either (a) a loss that isn't from a passive activity
• Eligible for the deduction for dividends received under section or (b) a gain, report it on Form 4797, line 2, column (g). Do not
243(a), (b), or (c); complete columns (b) through (f) on line 2 of Form 4797. Instead,
• Eligible for the deduction for dividends received under section enter “From Schedule K-1 (Form 1065)” across these columns.
245;
• Eligible for the deduction for dividends received under section If the amount is a loss from a passive activity, see Passive Loss
245A; and Limitations in the Instructions for Form 4797. Report the loss
• Hybrid dividends as defined in section 245A(e)(4). following the Instructions for Form 8582 to figure how much of the
loss is allowed on Form 4797. However, if the box in item D is
Box 6c. Dividend Equivalents checked, report the loss following the rules for Publicly traded
Dividend equivalents are not reported on Form 1040 or 1040-SR. partnerships, earlier. If the partnership had net section 1231 gain
This information is provided for persons that are not U.S. persons, (loss) from more than one activity, it will attach a statement that will
who are generally required to treat dividend equivalents as identify the section 1231 gain (loss) from each activity.
U.S.-source dividends, and domestic partnerships with partners who If you have any foreign source net section 1231 gain (loss),
may need this information. The ordinary dividends amount in box 6a ! see the Partner’s Instructions for Schedule K-3 for additional
does not include the amount of dividend equivalents. CAUTION information.

Box 7. Royalties Box 11. Other Income (Loss)
Report royalties on Schedule E (Form 1040), line 4.
Code A. Other portfolio income (loss). The partnership will
Box 8. Net Short-Term Capital Gain (Loss) report portfolio income other than interest, ordinary dividend, royalty,
and capital gain (loss) income, and attach a statement to tell you
Report the net short-term capital gain (loss) on Schedule D (Form what kind of portfolio income is reported.
1040), line 5.
If the partnership held a residual interest in a real estate
Box 9a. Net Long-Term Capital Gain (Loss) mortgage investment conduit (REMIC), it will report on the statement
your share of REMIC taxable income (net loss) that you report on
Report the net long-term capital gain (loss) on Schedule D (Form Schedule E (Form 1040), line 38, column (d). The statement will also
1040), line 12. report your share of any “excess inclusion” that you report on
If you have any foreign source net long-term capital gain Schedule E (Form 1040), line 38, column (c), and your share of
section 212 expenses that you report on Schedule E (Form 1040),
CAUTION additional information.
! (loss), see the Partner’s Instructions for Schedule K-3 for line 38, column (e).
Code B. Involuntary conversions. This is your net gain (loss)
Box 9b. Collectibles (28%) Gain (Loss) from involuntary conversions due to casualty or theft. The
Report collectibles gain or loss on line 4 of the 28% Rate Gain partnership will give you a statement that shows the amounts to be
Worksheet—Line 18 in the Instructions for Schedule D (Form 1040). reported on Form 4684, Casualties and Thefts, line 34, columns (b)
(i), (b)(ii), and (c).
If you have any foreign source collectibles (28%) gain (loss), If there was a gain (loss) from a casualty or theft to property not
! see the Partner’s Instructions for Schedule K-3 for additional used in a trade or business or for income-producing purposes, the
CAUTION information.
partnership will provide you with the information you need to
complete Form 4684.
Box 9c. Unrecaptured Section 1250 Gain Code C. Section 1256 contracts and straddles. The partnership
There are three types of unrecaptured section 1250 gain. Report will report any net gain or loss from section 1256 contracts. Report
your share of this unrecaptured gain on the Unrecaptured Section this amount on Form 6781, Gains and Losses From Section 1256
1250 Gain Worksheet—Line 19 in the Instructions for Schedule D Contracts and Straddles.
(Form 1040) as follows.
• Report unrecaptured section 1250 gain from the sale or Code D. Mining exploration costs recapture. The partnership
exchange of the partnership's business assets on line 5. will give you a statement that shows the information needed to
• Report unrecaptured section 1250 gain from the sale or recapture certain mining exploration costs (section 617). See Pub.
exchange of an interest in a partnership on line 10. 535 for details.
• Report unrecaptured section 1250 gain from an estate, trust, Code E. Cancellation of debt. Generally, this cancellation of debt
regulated investment company (RIC), or real estate investment trust (COD) amount is included in your gross income (Schedule 1 (Form
(REIT) on line 11. 1040), line 8c). Under section 108(b)(5), you may elect to apply any
portion of the COD amount excluded from gross income to the
If the partnership reports only unrecaptured section 1250 gain reduction of the basis of depreciable property. See Form 982,
from the sale or exchange of its business assets, it will enter a dollar Reduction of Tax Attributes Due to Discharge of Indebtedness (and
amount in box 9c. If it reports the other two types of unrecaptured Section 1082 Basis Adjustment), for more details.
gain, it will provide an attached statement that shows the amount for
each type of unrecaptured section 1250 gain. Code F. Section 743(b) positive income adjustments. The
partnership will use this code to report the net positive income
If you have any foreign source unrecaptured section 1250 adjustment resulting from all section 743(b) basis adjustments. The
! gain, see the Partner’s Instructions for Schedule K-3 for partnership will provide your section 743(b) adjustment net of cost
CAUTION additional information.
recovery at year end by asset grouping in box 20, code U.

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Code G. Reserved for future use. statement that provides a description of the property, your share of
the amount realized from the disposition, your share of the
Code H. Section 951(a) income inclusions. If the partnership is a partnership's adjusted basis in the property (for other than oil or gas
domestic partnership that does not apply Regulations section properties), and your share of the total intangible drilling costs,
1.958-1(d)(1) through (3) to a tax year of a foreign corporation that development costs, and mining exploration costs (section 59(e)
begins before January 25, 2022, to treat it as not owning stock of the expenditures) passed through for the property. You must figure your
foreign corporation within the meaning of section 958(a) for gain or loss from the disposition by increasing your share of the
purposes of section 951, and is a U.S. shareholder of the foreign adjusted basis by the intangible drilling costs, development costs, or
corporation, then any section 951(a) income inclusions with respect mine exploration costs for the property that you capitalized (that is,
to the foreign corporation and such tax year are section 951(a) costs that you didn't elect to deduct under section 59(e)). Report a
income inclusions of the partnership, a distributive share of which loss on Form 4797, Part I. Report a gain on Form 4797, Part III, in
you generally include in gross income. The partnership will use this accordance with the instructions for line 28. See Regulations section
code to report your share of its section 951(a) income inclusions. 1.1254-5 for details.
Additionally, if the partnership has a distributive share of a lower-tier • Any income, gain, or loss to the partnership under section 751(b)
partnership's section 951(a) income inclusions, the partnership will (certain distributions treated as sales or exchanges). Report this
use this code to report your share of that inclusion. amount on Form 4797, line 10.
• Specially allocated ordinary gain (loss). Report this amount on
Note. In all other cases, the partnership will report information Form 4797, line 10.
needed for you to determine section 951(a) income inclusions with • Net short-term capital gain (loss) and net long-term capital gain
respect to CFCs owned by the partnership, directly or indirectly, on (loss) from Schedule D (Form 1065) that isn't portfolio income. An
Schedule K-3, Part VI. example is gain or loss from the disposition of nondepreciable
The partnership will attach a statement to the Schedule K-1 personal property used in a trade or business activity of the
identifying any subpart F inclusion attributable to: partnership. Report total net short-term gain (loss) on Schedule D
• The sale or exchange by a controlled foreign corporation (CFC) of (Form 1040), line 5. Report the total net long-term gain (loss) on
stock in another foreign corporation described in section 964(e)(4), Schedule D (Form 1040), line 12.
or • Gain from the sale or exchange of qualified small business (QSB)
• Hybrid dividends of tiered corporations under section 245A(e)(2). stock (as defined in the Instructions for Schedule D (Form 1065))
that is eligible for a section 1202 exclusion. The partnership should
Code I. Other income (loss). Amounts with code I are other items also give you (a) the name of the corporation that issued the QSB
of income, gain, or loss not included in boxes 1 through 10 or stock, (b) your share of the partnership's adjusted basis and sales
reported in box 11 using codes A through H. The partnership should price of the QSB stock, and (c) the dates the QSB stock was bought
give you a description and the amount of your share for each of and sold. Corporate partners are not eligible for the section 1202
these items. exclusion. The following additional limitations apply at the partner
Report loss items that are passive activity amounts to you level.
following the Instructions for Form 8582. However, if the box in item 1. You must have held an interest in the partnership when the
D is checked, report the loss following the rules for Publicly traded partnership acquired the QSB stock and at all times thereafter until
partnerships, earlier. the partnership disposed of the QSB stock.
Code I items may include the following. 2. Your share of the eligible section 1202 gain cannot exceed
• Gain or loss attributable to the sale or exchange of qualified the amount that would have been allocated to you based on your
preferred stock of the Federal National Mortgage Association interest in the partnership at the time the QSB stock was acquired.
(Fannie Mae) and the Federal Home Loan Mortgage Corporation
(Freddie Mac). The partnership will report on an attached statement See the Instructions for Schedule D (Form 1040) and the
the amount of gain or loss attributable to the sale or exchange of the Instructions for Form 8949 for details on how to report the gain and
qualified preferred stock, the date the stock was acquired by the the amount of the allowable exclusion.
partnership, and the date the stock was sold or exchanged by the • Gain eligible for section 1045 rollover.
partnership. If the partner is not a financial institution, report the gain
or loss on Schedule D (Form 1040), line 5 or line 12, in accordance Replacement stock purchased by the partnership. The
with the Instructions for Schedule D (Form 1040) and the partnership should give you (a) the name of the corporation that
Instructions for Form 8949. If a partner is a financial institution issued the QSB stock, (b) your share of the partnership's adjusted
referred to in section 582(c)(2) or a depositary institution holding basis and sales price of the QSB stock, (c) the dates the QSB stock
company (as defined in section 3(w)(1) of the Federal Deposit was bought and sold, (d) your share of gain from the sale of the QSB
Insurance Act), report the gain or loss in accordance with the stock, and (e) your share of the gain that was deferred by the
Instructions for Form 4797, and Rev. Proc. 2008-64, 2008-47 I.R.B. partnership under section 1045. Corporate partners are not eligible
1195. for the section 1045 rollover. To qualify for the section 1045 rollover:
• Partnership gains from the disposition of farm recapture property 1. You must have held an interest in the partnership during the
(see the instructions for Form 4797, line 27) and other items to which entire period in which the partnership held the QSB stock (more than
section 1252 applies. 6 months prior to the sale), and
• Income from recoveries of tax benefit items. A tax benefit item is
an amount you deducted in a prior tax year that reduced your 2. Your share of the gain eligible for the section 1045 rollover
income tax. Report this amount on Schedule 1 (Form 1040), line 8z, cannot exceed the amount that would have been allocated to you
to the extent it reduced your tax in the prior tax year. based on your interest in the partnership at the time the QSB stock
• Gambling gains and losses. was acquired.
1. If the partnership wasn't engaged in the trade or business of See the Instructions for Schedule D (Form 1040) and the
gambling, (a) report gambling winnings on Schedule 1 (Form 1040), Instructions for Form 8949 for details on how to report the gain and
line 8b; and (b) deduct gambling losses to the extent of winnings on the amount of the allowable postponed gain.
Schedule A (Form 1040), line 16.
2. If the partnership was engaged in the trade or business of Opting out of partnership election. You can opt out of the
gambling, (a) report gambling winnings on Schedule E (Form 1040), partnership's section 1045 election and either (1) recognize the gain,
line 28, column (k); and (b) deduct gambling losses (to the extent of or (2) elect to purchase different replacement QSB stock, either
winnings) on Schedule E (Form 1040), line 28, column (i). directly or through ownership of a different partnership that acquired
• Gain (loss) from the disposition of an interest in oil, gas, replacement QSB stock. You satisfy the requirement to purchase
geothermal, or other mineral properties. The partnership will attach a replacement QSB stock if you own an interest in a partnership that
purchases QSB stock during the 60-day period. You must also notify

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the partnership, in writing, if you opt out of the partnership's section will report on an attached statement your allowable share of the cost
1045 election. If you recognize gain, you must notify the partnership, of any qualified enterprise zone or qualified real property it placed in
in writing, of the amount of the gain that you are recognizing. service during the tax year. Report the amount from Form 4562,
line 12, allocable to a passive activity using the Instructions for Form
Replacement stock not purchased by the partnership. The 8582. If the amount isn't a passive activity deduction, report it on
partnership should give you (a) the name of the corporation that Schedule E (Form 1040), line 28, column (j). However, if the box in
issued the QSB stock, (b) your share of the partnership's adjusted item D is checked, report this amount following the rules for Publicly
basis and sales price of the QSB stock, (c) the dates the QSB stock traded partnerships, earlier.
was bought and sold, and (d) your share of gain from the sale of the
QSB stock. Corporate partners are not eligible for the section 1045 Box 13. Other Deductions
rollover. To qualify for the section 1045 rollover:
Contributions. Codes A through G. The partnership will give you
1. You must have held an interest in the partnership during the a statement that shows charitable contributions subject to the 100%,
entire period in which the partnership held the QSB stock, 60%, 50%, 30%, and 20% AGI limitations. For more details, see
2. Your share of the gain eligible for the section 1045 rollover Pub. 526, Charitable Contributions, and the Instructions for
cannot exceed the amount that would have been allocated to you Schedule A (Form 1040). If your contributions are subject to more
based on your interest in the partnership at the time the QSB stock than one of the AGI limitations, see Worksheet 2. Applying the
was acquired, and Deduction Limits, in Pub. 526.
3. You must purchase other QSB stock (as defined in the Charitable contribution deductions are not taken into account in
Instructions for Schedule D (Form 1040)) during the 60-day period figuring your passive activity loss for the year. Do not include them
that began on the date the QSB stock was sold by the partnership. on Form 8582.
See the Instructions for Schedule D (Form 1040) and the Code A. Cash contributions (60%). Report this amount, subject
Instructions for Form 8949 for details on how to report the gain and to the 60% AGI limitation, on Schedule A (Form 1040), line 11.
the amount of the allowable postponed gain. Code B. Cash contributions (30%). Report this amount, subject
Making the section 1045 election. You make a section 1045 to the 30% AGI limitation, on Schedule A (Form 1040), line 11.
election on a timely filed return for the tax year during which the
partnership's tax year ends. See the Instructions for Form 8949 and Code C. Noncash contributions (50%). If property other than
the Instructions for Schedule D (Form 1040) for more information. cash is contributed, and if the claimed deduction for one item or
Attach to your Schedule D (Form 1040) a statement that includes group of similar items of property exceeds $500, the partnership
the following information for each amount of gain that you do not must give you a copy of Form 8283, Noncash Charitable
recognize under section 1045. Contributions, to attach to your tax return. Do not deduct the amount
• The name of the corporation that issued the QSB stock. shown on Form 8283. It is the partnership's contribution. Instead,
• The name and EIN of the selling partnership. deduct the amount identified by code C, box 13, subject to the 50%
• The dates the QSB stock was purchased and sold. AGI limitation, on Schedule A (Form 1040), line 12.
• The amount of gain that isn't recognized under section 1045. If the partnership provides you with information that the
• If a partner purchases QSB stock, the name of the corporation contribution was property other than cash and doesn't give you a
that issued the replacement QSB stock, the date the stock was Form 8283, see the Instructions for Form 8283 for filing
purchased, and the cost of the stock. requirements. Do not file Form 8283 unless the total claimed
• If a partner treats the partner's interest in QSB stock that is deduction for all contributed items of property exceeds $500.
purchased by a purchasing partnership as the partner's replacement Food inventory contributions. The partnership will report on
QSB stock, the name and EIN of the purchasing partnership, the an attached statement your share of qualified food inventory
name of the corporation that issued the replacement QSB stock, the contributions. The food inventory contribution isn't included in the
partner's share of the cost of the QSB stock that was purchased by amount reported in box 13 using code C. The partnership will also
the partnership, the computation of the partner's adjustment to basis report your share of the partnership's net income from the business
with respect to that QSB stock, and the date the stock was activities that made the food inventory contribution(s). Your
purchased by the partnership. deduction for food inventory contributions made during 2022 cannot
exceed 15% of your aggregate net income for the tax year from the
Distribution of replacement QSB stock to a partner that business activities from which the food inventory contribution was
reduces another partner's interest in replacement QSB stock. made (including your share of net income from partnership or S
You must recognize gain upon a distribution of replacement QSB corporation businesses that made food inventory contributions).
stock to another partner that reduces your share of the replacement Amounts that exceed the 15% limitation may be carried over for up
QSB stock held by a partnership. The amount of gain that you must to 5 years. Report this amount, subject to the 50% AGI limitation, on
recognize is based on the amount of gain that you would recognize Schedule A (Form 1040), line 12.
upon a sale of the distributed replacement QSB stock for its FMV on
the date of the distribution, but not to exceed the amount you Code D. Noncash contributions (30%). Report this amount,
previously deferred under section 1045 with respect to the subject to the 30% AGI limitation, on Schedule A (Form 1040),
distributed replacement QSB stock. If the partnership distributed line 12.
your share of replacement QSB stock to another partner, the Code E. Capital gain property to a 50% organization (30%).
partnership should give you (a) the name of the corporation that Report this amount, subject to the 30% AGI limitation, on
issued the replacement QSB stock, (b) the date the replacement Schedule A (Form 1040), line 12. See Worksheet 2. Applying the
QSB stock was distributed to another partner or partners, and (c) Deduction Limits, in Pub. 526.
your share of the partnership's adjusted basis and FMV of the
replacement QSB stock on such date. Code F. Capital gain property (20%). Report this amount,
For more information, see Regulations section 1.1045-1. subject to the 20% AGI limitation, on Schedule A (Form 1040),
line 12.
Code G. Contributions (100%). The partnership will report your
Deductions distributive share of the following contributions (both cash and
noncash) that may be subject to the 100% AGI limitation.
Box 12. Section 179 Deduction Increased limit for certain cash contributions during 2021.
Use this amount, along with the total cost of section 179 property The partnership will report your distributive share of certain cash
placed in service during the year from other sources, to complete contributions under section 2205(a) of the Coronavirus Aid, Relief,
Part I of Form 4562, Depreciation and Amortization. The partnership

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and Economic Security Act. You can elect to deduct 100% of these below zero) by the amount of excess business interest allocated to
contributions on Schedule A (Form 1040), line 11. the partner for the tax year, even if the partner is not allowed a
Qualified conservation contributions of property used in deduction for the allocated excess business interest in the year of
agriculture or livestock production. The partnership will report the basis reduction. If the partner disposes of a partnership interest
your share of qualified conservation contributions of property used in in which the basis has been reduced before all of the allocated
agriculture or livestock production. This contribution isn't included in excess business interest was used, the partner increases its basis
the amount reported in box 13 using code C. If you are a farmer or immediately before the sale for the amount not yet deducted.
rancher, you qualify for a 100% AGI limitation for this contribution. Code L. Deductions—portfolio income (other). Generally, you
Otherwise, your deduction for this contribution is subject to a 50% should report these amounts on Schedule A (Form 1040), line 16.
AGI limitation. Report this amount on Schedule A (Form 1040), See the instructions for Schedule A, line 16, for details. These
line 12. See Pub. 526 for more information on qualified conservation deductions are not taken into account in figuring your passive
contributions. activity loss for the year. Do not enter them on Form 8582.
Code H. Investment interest expense. Include this amount on Code M. Amounts paid for medical insurance. Any amounts
Form 4952, line 1. If the partnership has investment income or other paid during the tax year for insurance that constitutes medical care
investment expense, it will report your share of these items in box 20 for you, your spouse, your dependents, and your children under age
using codes A and B. Include investment income and expenses from 27 who are not dependents. On Schedule 1 (Form 1040), line 17,
other sources to figure how much of your total investment interest is you may be allowed to deduct such amounts, even if you do not
deductible. You will also need this information to figure your itemize deductions. If you do itemize deductions, enter on
investment interest expense deduction. Schedule A (Form 1040), line 1, any amounts not deducted on
If the partnership paid or accrued interest on debts properly Schedule 1 (Form 1040), line 17.
allocable to investment property, the amount of interest you are
allowed to deduct may be limited. Code N. Educational assistance benefits. Deduct your
educational assistance benefits on a separate line of Schedule E
For more information on the special provisions that apply to (Form 1040), line 28, up to the $5,250 limitation. If your benefits
investment interest expense, see Form 4952 and Pub. 550, exceed $5,250, you may be able to use the excess amount on Form
Investment Income and Expenses. 8863 to figure the education credits.
Code I. Deductions—royalty income. Include deductions Code O. Dependent care benefits. The partnership will report the
allocable to royalties on Schedule E (Form 1040), line 19. For this dependent care benefits you received. You must use Form 2441,
type of expense, enter “From Schedule K-1 (Form 1065).” Part III, to figure the amount, if any, of the benefits you may exclude
These deductions are not taken into account in figuring your from your income.
passive activity loss for the year. Do not enter them on Form 8582.
Code P. Preproductive period expenses. You may be able to
Code J. Section 59(e)(2) expenditures. On an attached deduct these expenses currently or you may need to capitalize them
statement, the partnership will show the type and the amount of under section 263A. See Pub. 225, Farmer's Tax Guide, and
qualified expenditures for which you may make a section 59(e) Regulations section 1.263A-4 for details.
election. The statement will also identify the property for which the
expenditures were paid or incurred. If there is more than one type of Code Q. Reserved for future use.
expenditure, the amount of each type will also be listed. Code R. Pensions and IRAs. Payments made on your behalf to
If you deduct these expenditures in full in the current year, they an IRA, a qualified plan, a simplified employee pension (SEP), or a
are treated as adjustments or tax preference items for purposes of SIMPLE IRA plan. See the Schedule 1 (Form 1040) instructions for
alternative minimum tax. However, you may elect to amortize these line 20 to figure your IRA deduction. Enter payments made to a
expenditures over the number of years in the applicable period qualified plan, SEP, or SIMPLE IRA plan on Schedule 1 (Form
rather than deducting the full amount in the current year. If you make 1040), line 16. If the payments to a qualified plan were to a defined
this election, these items are not treated as adjustments or tax benefit plan, the partnership should give you a statement showing
preference items. the amount of the benefit accrued for the current tax year.
Under the election, you can deduct circulation expenditures Code S. Reforestation expense deduction. The partnership will
ratably over a 3-year period. Research and experimental provide a statement that describes the qualified timber property for
expenditures and mining exploration and development costs can be these reforestation expenses. The expense deduction is limited to
amortized over a 10-year period. Intangible drilling and development $10,000 ($5,000 if married filing separately) for each qualified timber
costs can be amortized over a 60-month period. The amortization property, including your share of the partnership's expense and any
period begins with the month in which such costs were paid or reforestation expenses you separately paid or incurred during the
incurred. tax year.
Make the election on Form 4562. If you make the election, report If you didn't materially participate in the activity, use Form 8582 to
the current year amortization of section 59(e) expenditures from Part figure the amount to report on Schedule E (Form 1040), line 28,
VI of Form 4562 on Schedule E (Form 1040), line 28. If you do not column (g). If you materially participated in the reforestation activity,
make the election, report the section 59(e)(2) expenditures on report the deduction on Schedule E (Form 1040), line 28, column (i).
Schedule E (Form 1040), line 28, and figure the resulting adjustment Codes T through U. Reserved for future use.
or tax preference item (see Form 6251, Alternative Minimum
Tax—Individuals). Whether you deduct the expenditures or elect to Code V. Section 743(b) negative income adjustments. The
amortize them, report the amount on a separate line on line 28, partnership will use this code to report the net negative income
column (i), if you materially participated in the partnership activity. If adjustment resulting from all section 743(b) basis adjustments. The
you didn't materially participate, follow the Instructions for Form partnership will provide your section 743(b) adjustment net of cost
8582 to figure how much of the deduction can be reported in column recovery at year end by asset grouping in box 20, code U.
(g). Code W. Other deductions. Amounts with this code may include
Code K. Excess business interest expense. If the partnership the following.
reports excess business interest expense to the partner, the partner • Itemized deductions that Form 1040 or 1040-SR filers report on
is required to file Form 8990. See the Instructions for Form 8990, Schedule A (Form 1040).
Limitation on Business Interest Expense Under Section 163(j), for • Penalty on early withdrawal of savings. Report this amount on
additional information. Schedule 1 (Form 1040), line 18.
For tax years beginning after 2017, the partner’s basis in its
partnership interest at the end of the tax year is reduced (but not

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• Soil and water conservation expenditures and endangered If the amount on this line is a loss, enter only the deductible
species recovery expenditures. See section 175 for limitations on amount on Schedule SE (Form 1040). See Limitations on Losses,
the amount you are allowed to deduct. Deductions, and Credits, earlier.
• Expenditures for the removal of architectural and transportation If your partnership is an options dealer or a commodities dealer,
barriers to the elderly and disabled that the partnership elected to see section 1402(i).
treat as a current expense. The deductions are limited by section
190(c) to $15,000 per year from all sources. If your partnership is an investment club, see Rev. Rul. 75-525,
• Film, television, and live theatrical production expenses. The 1975-2 C.B. 350.
partnership will provide a statement that describes the film, Code B. Gross farming or fishing income. If you are an
television, or live theatrical production generating these expenses. individual partner, enter the amount from this line, as an item of
Generally, if the aggregate cost of the production exceeds $15 information, on Schedule E (Form 1040), line 42. Also use this
million, you are not entitled to the deduction. The limitation is $20 amount to figure net earnings from self-employment under the farm
million for productions in certain areas (see section 181 for details). optional method on Schedule SE (Form 1040), Part II.
If you didn't materially participate in the activity, use Form 8582 to
determine the amount that can be reported on Schedule E (Form Code C. Gross nonfarm income. If you are an individual partner,
1040), line 28, column (g). If you materially participated in the use this amount to figure net earnings from self-employment under
production activity, report the deduction on Schedule E (Form 1040), the nonfarm optional method on Schedule SE (Form 1040), Part II.
line 28, column (i).
• Interest expense allocated to debt-financed distributions. The Box 15. Credits
manner in which you report such interest expense depends on your
use of the distributed debt proceeds. If the proceeds were used in a If you have credits that are passive activity credits to you, you must
trade or business activity, report the interest on Schedule E (Form complete Form 8582-CR (or Form 8810 for corporations) in addition
1040), line 28. In column (a), enter the name of the partnership and to the credit forms identified below. See Passive Activity Limitations,
“interest expense.” If you materially participated in the trade or earlier, and the Instructions for Form 8582-CR (or Form 8810) for
business activity, enter the interest expense in column (i). If you details.
didn't materially participate in the activity, follow the Instructions for Generally, you are not required to complete the source
Form 8582 to figure the interest expense you can report in column TIP credit form or attach it to Form 3800 if you are a taxpayer
(g). See the definition of material participation, earlier. If the that isn't a partnership or S corporation, and your only
proceeds were used in an investment activity, report the interest on source for a credit listed in Form 3800, Part III, is from a partnership,
Form 4952. If the proceeds are used for personal purposes, the S corporation, estate, trust, or cooperative. (Instead, you can report
interest is generally not deductible. this credit directly on Form 3800, Part III, and enter the EIN of the
• Interest paid or accrued on debt properly allocable to your share partnership in column (b) of Part III.) The following exceptions apply.
of a working interest in any oil or gas property (if your liability isn't
limited). If you didn't materially participate in the oil or gas activity, • You are claiming the investment credit (Form 3468) or the
this interest is investment interest reportable as described earlier biodiesel and renewable diesel fuels credit (Form 8864) in Part III
under Code H. Investment interest expense; otherwise, it is trade or with box A or B checked.
business interest. If you didn't materially participate in the oil or gas • The taxpayer is an estate or trust and the source credit can be
activity, this interest is investment interest expense and should be allocated to beneficiaries. For more details, see the instructions for
reported on Form 4952. If you materially participated in the activity, Form 1041, U.S. Income Tax Return for Estates and Trusts,
report the interest on Schedule E (Form 1040), line 28. On a Schedule K-1, box 13.
separate line, enter “interest expense” and the name of the • The taxpayer is a cooperative and the source credit can or must
partnership in column (a) and the amount in column (i). be allocated to patrons. For more details, see the instructions for
• Contributions to a capital construction fund (CCF). The deduction Form 1120-C, U.S. Income Tax Return for Cooperative
for a CCF investment isn't taken on Schedule E (Form 1040). Associations, Schedule J, line 5c.
Instead, you subtract the deduction from the amount that would
normally be entered as taxable income on Form 1040 or 1040-SR, Codes A and B. Reserved for future use.
line 15. In the margin to the left of line 15, enter "CCF" and the Codes C and D. Low-income housing credit. If section 42(j)(5)
amount of the deduction. applies, the partnership will report your share of the low-income
• Deductions—portfolio income (formerly deductible by individuals housing credit using code C. If section 42(j)(5) doesn't apply, your
under section 67 subject to 2% AGI floor). For taxpayers other than share of the credit will be reported using code D. Any allowable
individuals, deduct amounts that are clearly and directly allocable to low-income housing credit reported using code C or code D is
portfolio income (other than investment interest expense and section reported on Form 8586, line 4; or Form 3800, Part III, line 4d.
212 expenses from a REMIC). Keep a separate record of the low-income housing credit from
The partnership will give you a description and the amount of each separate source so that you can correctly figure any recapture
your share for each of these items. of low-income housing credit that may result from the disposition of
Code X. Reserved for future use. all or part of your partnership interest. For more information on
recapture, see the Instructions for Form 8611, Recapture of
Low-Income Housing Credit.
Box 14. Self-Employment Earnings Code E. Qualified rehabilitation expenditures (rental real es-
(Loss) tate). The partnership will report your share of the qualified
rehabilitation expenditures and other information you need to
If you and your spouse are both partners, each of you must complete Form 3468 related to rental real estate activities using
complete and file your own Schedule SE (Form 1040), code E. Your share of qualified rehabilitation expenditures from
Self-Employment Tax, to report your partnership net earnings (loss) property not related to rental real estate activities will be reported in
from self-employment. box 20 using code D. See the Instructions for Form 3468 for details.
Code A. Net earnings (loss) from self-employment. If you are a If the partnership is reporting expenditures from more than one
general partner, reduce this amount before entering it on activity, the attached statement will separately identify the
Schedule SE (Form 1040) by any section 179 expense deduction expenditures from each activity.
claimed, unreimbursed partnership expenses claimed, and Combine the expenditures (for Form 3468 reporting) from
depletion claimed on oil and gas properties. Do not reduce net box 15, code E, and box 20, code D. The expenditures related to
earnings from self-employment by any separately stated deduction rental real estate activities (box 15, code E) are reported on
for health insurance expenses. Schedule K-1 separately from other qualified rehabilitation

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expenditures (box 20, code D) because they are subject to different • Renewable electricity production credit. The partnership will
passive activity limitation rules. See the Instructions for Form provide a statement showing the allocation of the credit for
8582-CR for details. production during the 4-year period beginning on the date the facility
was placed in service and for production after that period.
Code F. Other rental real estate credits. The partnership will Indian employment credit (Form 8845).
identify the type of credit and any other information you need to •
figure these credits from rental real estate activities (other than the • Orphan drug credit (Form 8820).
low-income housing credit and qualified rehabilitation expenditures). • Credit for small employer pension plan startup costs and auto
enrollment (Form 8881).
These credits may be limited by the passive activity limitations. If the Credit for employer-provided childcare facilities and services
credits are from more than one activity, the partnership will identify •
(Form 8882).
the credits from each activity on an attached statement. See Passive Biodiesel, renewable diesel, or sustainable aviation fuels credit. If
Activity Limitations, earlier, and the Instructions for Form 8582-CR •
this credit includes the small agri-biodiesel producer credit, the
for details. partnership will provide additional information on an attached
Code G. Other rental credits. The partnership will identify the statement. If no statement is attached, report this amount on Form
type of credit and any other information you need to figure these 8864, line 10. If a statement is attached, see the instructions for
rental credits. These credits may be limited by the passive activity Form 8864, line 10.
limitations. If the credits are from more than one activity, the • Low sulfur diesel fuel production credit (Form 8896).
partnership will identify the credits from each activity on an attached • Oil and gas production from marginal wells (Form 8904).
statement. See Passive Activity Limitations, earlier, and the • Distilled spirits credit (Form 8906).
Instructions for Form 8582-CR for details. • Energy efficient home credit (Form 8908).
Code H. Undistributed capital gains credit. Code H represents • Alternative motor vehicle credit (Form 8910).
taxes paid on undistributed capital gains by a RIC or REIT. Report • Alternative fuel vehicle refueling property credit (Form 8911).
these taxes on Schedule 3 (Form 1040), line 13a. • Clean renewable energy bond credit. Report this amount on Form
8912.
Code I. Biofuel producer credit. Report this amount on Form • New clean renewable energy bond credit. Report this amount on
6478, Biofuel Producer Credit, line 3, or Form 3800, Part III (see TIP, Form 8912.
earlier), line 4c. • Qualified energy conservation bond credit. Report this amount on
Form 8912.
Code J. Work opportunity credit. Report this amount on Form • Qualified zone academy bond credit. Report this amount on Form
5884, Work Opportunity Credit, line 3, or Form 3800, Part III (see 8912.
TIP, earlier), line 4b. • Qualified school construction bond credit. Report this amount on
Code K. Disabled access credit. Report this amount on Form Form 8912.
8826, Disabled Access Credit, line 7, or Form 3800, Part III (see TIP, • Build America bond credit. Report this amount on Form 8912.
earlier), line 1e. • Mine rescue team training credit (Form 8923).
• Credit for employer differential wage payments (Form 8932).
Code L. Empowerment zone employment credit. Report this • Carbon oxide sequestration credit (Form 8933, Part V, line 14).
amount on Form 8844, Empowerment Zone Employment Credit, • Carbon oxide sequestration credit recapture (Form 8933, Part V,
line 3, or Form 3800, Part III (see TIP, earlier), line 3. line 16). Enter as a negative number.
Code M. Credit for increasing research activities. Report this • Qualified plug-in electric drive motor vehicle credit (including
amount on Form 6765, Credit for Increasing Research Activities, qualified two-wheeled plug-in electric vehicles and new clean
line 37; or on Form 3800, Part III (see TIP, earlier) as follows. vehicles) (Form 8936).
• The partnership will provide information necessary to determine if • Credit for small employer health insurance premiums (Form
it is an eligible small business under section 38(c)(5)(A). If you and 8941).
the partnership are eligible small businesses, report the credit on • Employee retention credit for employers affected by qualified
line 4i. For more information, see the Instructions for Form 3800. disasters (Form 5884-A).
• All others, report the credit on line 1c. • Employer credit for paid family and medical leave (Form 8994).
• Qualified commercial clean vehicle credit for vehicles acquired
Code N. Credit for employer social security and Medicare tax- after 2022 (Form 8936-A).
es. Report this amount on Form 8846, Credit for Employer Social
Security and Medicare Taxes Paid on Certain Employee Tips, line 5;
or Form 3800, Part III, line 4f (see TIP, earlier). Box 16. International Transactions
Code O. Backup withholding. This is your share of the credit for If the partnership checked the box, see the attached Schedule K-3
backup withholding on dividends, interest income, and other types with respect to items of international tax relevance.
of income. Include this amount in the total you enter on Form 1040
or 1040-SR, line 25c, and attach a copy of the Schedule K-1 to your If the partnership did not check the box, the partnership attached
tax return. Instead of attaching a copy of the Schedule K-1 to the tax a statement to the Schedule K-1 (or issued a statement prior to
return, you can include a statement with the return that provides the furnishing the Schedule K-1) notifying the partner that the partner
partnership's name, address, EIN, and backup withholding amount. will not receive Schedule K-3 from the partnership unless the partner
requests the schedule.
Code P. Other credits. On a statement attached to Schedule K-1,
the partnership will identify the type of credit and any other For additional information, see the Partner’s Instructions for
information you need to figure credits other than those reported with Schedule K-3.
codes A through O. Most credits identified by code P will be
reported on Form 3800 (see TIP, earlier).
Credits that may be reported with code P include the following. Box 17. Alternative Minimum Tax
• New markets credit (Form 8874). (AMT) Items
• Qualified railroad track maintenance credit (Form 8900).
• Unused investment credit from the qualifying advanced coal Use the information reported in box 17 (as well as your adjustments
project credit, qualifying gasification project credit, qualifying and tax preference items from other sources) to prepare your Form
advanced energy project credit, and advanced manufacturing 6251, Alternative Minimum Tax—Individuals; or Schedule I (Form
investment credit allocated from cooperatives (Form 3468, line 9). 1041), Alternative Minimum Tax—Estates and Trusts.
• Unused investment credit from the rehabilitation credit or energy Code A. Post-1986 depreciation adjustment. This amount is
credit allocated from cooperatives (Form 3468, line 13). your share of the partnership's post-1986 depreciation adjustment. If

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you are an individual partner, report this amount on Form 6251, partnership's adjusted basis of the distributed securities. Advances
line 2l. or drawings of money or property against your share are treated as
current distributions made on the last day of the partnership's tax
Code B. Adjusted gain or loss. This amount is your share of the year.
partnership's adjusted gain or loss. If you are an individual partner,
report this amount on Form 6251, line 2k. Your basis in the distributed marketable securities (other than in
liquidation of your interest) is the smaller of:
Code C. Depletion (other than oil & gas). This amount is your • The partnership's adjusted basis in the securities immediately
share of the partnership's depletion adjustment. If you are an before the distribution increased by any gain recognized on the
individual partner, report this amount on Form 6251, line 2d. distribution of the securities, or
Codes D and E. Oil, gas, & geothermal properties—gross in- • The adjusted basis of your partnership interest reduced by any
come and deductions. The amounts reported on these lines cash distributed in the same transaction and increased by any gain
include only the gross income (code D) from, and deductions (code recognized on the distribution of the securities.
E) allocable to, oil, gas, and geothermal properties included in box 1 If you received the securities in liquidation of your partnership
of Schedule K-1. The partnership should have attached a statement interest, your basis in the marketable securities is equal to the
that shows any income from or deductions allocable to such adjusted basis of your partnership interest reduced by any cash
properties that are included in boxes 2 through 13, 18, and 20 of distributed in the same transaction and increased by any gain
Schedule K-1. Use the amounts reported and the amounts on the recognized on the distribution of the securities.
attached statement to help you figure the net amount to enter on
Form 6251, line 2t. Code B. Distribution subject to section 737. If a partner
contributed section 704(c) built-in gain property within the last 7
Code F. Other AMT items. Enter the information on the statement years and the partnership made a distribution of property to that
attached by the partnership on the applicable lines of Form 6251, partner other than the previously contributed built-in gain property,
Form 466, or Schedule I (Form 1041). the partner may be required to recognize gain under section 737.
This gain is in addition to any gain recognized under section 731 on
the distribution.
Box 18. Tax-Exempt Income and
When this occurs, the partnership will enter code B in box 19 of
Nondeductible Expenses the contributing partner's Schedule K-1 and attach a statement that
provides the information the partner needs to figure the recognized
Code A. Tax-exempt interest income. Report on your return, as gain under section 737. The partnership is required to provide the
an item of information, your share of the tax-exempt interest following information.
received or accrued by the partnership during the year. Individual • The FMV of the distributed property (other than money).
partners include this amount on Form 1040 or 1040-SR, line 2a. • The amount of money received in the distribution.
Increase the adjusted basis of your interest in the partnership by this • The net precontribution gain of the partner.
amount.
Using the information from the attached statement, complete the
Code B. Other tax-exempt income. Increase the adjusted basis worksheet below to figure your recognized gain under section 737.
of your interest in the partnership by the amount shown, but do not
include it in income on your tax return. Computation of Section 737 Gain
The partnership will attach a statement for the amount 1. Enter the FMV of the distributed property (other than
TIP included under code B that is exempt by reason of section money) . . . . . . . . . . . . . . . . . . . . . . $
2. Enter your adjusted basis in the partnership
892 and describe the nature of the income. immediately before the distribution. See Basis
Limitations, earlier . . . . . . . . . . . . . . . . .
Code C. Nondeductible expenses. The nondeductible expenses 3. Enter the amount of money received in the
paid or incurred by the partnership are not deductible on your tax distribution . . . . . . . . . . . . . . . . . . . .
return. Decrease the adjusted basis of your interest in the 4. Subtract line 3 from line 2. If zero or less,
partnership by this amount. enter -0- . . . . . . . . . . . . . . . . . . . . . .
5. Subtract line 4 from line 1 . . . . . . . . . . . . .
Box 19. Distributions 6. Enter your net precontribution gain . . . . . . . .
Code A. Cash and marketable securities. Code A shows the 7. Section 737 gain. Enter the lesser of the amount on
distributions the partnership made to you of cash and certain line 5 or line 6 . . . . . . . . . . . . . . . . . . .
marketable securities. The marketable securities are included at
their FMV on the date of distribution (minus your share of the
partnership's gain on the securities distributed to you). If the amount The type of gain (section 1231 gain, capital gain) generated is
shown as code A exceeds the adjusted basis of your partnership determined by the type of gain you would have recognized if you
interest immediately before the distribution, the excess is treated as sold the property rather than contributing it to the partnership.
gain from the sale or exchange of your partnership interest. Accordingly, report the amount from line 7, above, on Form 4797 or
Generally, this gain is treated as gain from the sale of a capital asset Form 8949 and the Schedule D of your tax return.
and should be reported on Form 8949 and the Schedule D for your
return. However, if you receive cash or property in exchange for any Code C. Other property. Code C shows the partnership's
part of a partnership interest, the amount of the distribution adjusted basis of property other than money immediately before the
attributable to your share of the partnership's unrealized receivable property was distributed to you. In addition, the partnership should
or inventory items results in ordinary income (see Regulations report the adjusted basis and FMV of each property distributed.
section 1.751-1(a) and Sale or Exchange of Partnership Interest, Decrease the adjusted basis of your interest in the partnership by
earlier). For details, see Pub. 541. the amount of your basis in the distributed property. Your basis in
the distributed property (other than in liquidation of your interest) is
The partnership will separately identify both of the following. the smaller of:
• The FMV of the marketable securities when distributed (minus The partnership's adjusted basis immediately before the
your share of the gain on the securities distributed to you). •
distribution, or
• The partnership's adjusted basis of those securities immediately The adjusted basis of your partnership interest reduced by any
before the distribution. •
cash distributed in the same transaction.
Decrease the adjusted basis of your interest in the partnership If you received the property in liquidation of your interest, your
(but not below zero) by the amount of cash distributed to you and the basis in the distributed property is equal to the adjusted basis of your

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partnership interest reduced by any cash distributed in the same 460(b)(2) on certain long-term contracts. Use Form 8697, Interest
transaction. Computation Under the Look-Back Method for Completed
If you receive cash or property in exchange for any part of a Long-Term Contracts, to report any such interest.
partnership interest, the amount of the distribution attributable to Code K. Look-back interest—income forecast method. The
your share of the partnership's unrealized receivable or inventory partnership will report any information you need to figure the interest
items results in ordinary income (see Regulations section 1.751-1(a) due or to be refunded under the look-back method of section 167(g)
and Sale or Exchange of Partnership Interest, earlier). (2) for certain property placed in service after September 13, 1995,
and depreciated under the income forecast method. Use Form
8866, Interest Computation Under the Look-Back Method for
Box 20. Other Information Property Depreciated Under the Income Forecast Method, to report
Code A. Investment income. Report this amount on Form 4952, any such interest.
line 4a. Code L. Dispositions of property with section 179 deductions.
Code B. Investment expenses. Report this amount on Form The partnership will report your share of gain or loss on the sale,
4952, line 5. exchange, or other disposition of property for which a section 179
expense deduction was passed through to partners with code L. If
Code C. Fuel tax credit information. The partnership will report the partnership passed through a section 179 expense deduction for
the number of gallons of each fuel sold or used during the tax year the property, you must report the gain or loss and any recapture of
for a nontaxable use qualifying for the credit for taxes paid on fuels, the section 179 expense deduction for the property on your income
type of use, and the applicable credit per gallon. Use this information tax return (see the Instructions for Form 4797 for details). The
to complete Form 4136, Credit for Federal Tax Paid on Fuels. partnership will provide all the following information.
Code D. Qualified rehabilitation expenditures (other than rent- 1. Description of the property.
al real estate). The partnership will report your share of qualified 2. Date the property was acquired and placed in service.
rehabilitation expenditures and other information you need to
complete Form 3468 for property not related to rental real estate 3. Date of the sale or other disposition of the property.
activities in box 20 using code D. Your share of qualified 4. Your share of the gross sales price or amount realized.
rehabilitation expenditures related to rental real estate activities is 5. Your share of the cost or other basis plus the expense of
reported in box 15 using code E. See the Instructions for Form 3468 sale.
for details. If the partnership is reporting expenditures from more
than one activity, the attached statement will separately identify the 6. Your share of the depreciation allowed or allowable.
expenditures from each activity. 7. Your share of the section 179 expense deduction (if any)
Combine the expenditures (for Form 3468 reporting) from passed through for the property and the partnership's tax year(s) in
box 15, code E, and box 20, code D. The expenditures related to which the amount was passed through. To figure the amount of
rental real estate activities (box 15, code E) are reported on depreciation allowed or allowable for Form 4797, line 22, add to the
Schedule K-1 separately from other qualified rehabilitation amount from item 6, above, the amount of your share of the section
expenditures (box 20, code D) because they are subject to different 179 expense deduction, reduced by any unused carryover of the
passive activity limitation rules. See the Instructions for Form deduction for this property. This amount may be different from the
8582-CR for details. amount of section 179 expense you deducted for the property if your
interest in the partnership has changed.
Code E. Basis of energy property. If the partnership provides an 8. If the disposition is due to a casualty or theft, a statement
attached statement for code E, use the information on the statement providing the information you need to complete Form 4684.
to complete the applicable energy credit on Form 3468, line 12. See
Energy Credit in the Instructions for Form 3468. 9. If the sale was an installment sale, any information you need
to complete Form 6252, Installment Sale Income. The partnership
Codes F and G. Recapture of low-income housing credit. A will separately report your share of all payments received for the
section 42(j)(5) partnership will report recapture of a low-income property in future tax years. See the Form 6252 instructions for
housing credit with code F. All other partnerships will report details.
recapture of a low-income housing credit with code G. Keep a
separate record of recapture from each of these sources so that you Code M. Recapture of section 179 deduction. The partnership
will be able to correctly figure any recapture of low-income housing will report your share of any recapture of section 179 expense
credit that may result from the disposition of all or part of your deduction if business use of any property for which the section 179
partnership interest. For details, see Form 8611. expense deduction was passed through to partners dropped to 50%
Code H. Recapture of investment credit. The partnership will or less. If this occurs, the partnership must provide the following
provide any information you need to figure your recapture tax on information.
Form 4255, Recapture of Investment Credit. See the Form 3468 on 1. Your share of the depreciation allowed or allowable (not
which you took the original credit for other information you need to including the section 179 expense deduction).
complete Form 4255. 2. Your share of the section 179 expense deduction (if any)
You may also need Form 4255 if you disposed of more than passed through for the property and the partnership's tax year(s) in
one-third of your interest in a partnership. which the amount was passed through. Reduce this amount by the
portion, if any, of your unused (carryover) section 179 expense
Code I. Recapture of other credits. On a statement attached to deduction for this property.
Schedule K-1, the partnership will report any information you need to
figure the recapture of the new markets credit (see Form 8874 and Code N. Business interest expense. For tax years beginning
Form 8874-B, Notice of Recapture Event for New Markets Credit); after November 12, 2020, the partnership will report your share of
the Indian employment credit (see section 45A(d)); any credit for the partnership's deductible business interest expense for inclusion
employer-provided childcare facilities and services (see Form 8882); in the separate loss class for computing any basis limitation (defined
the alternative motor vehicle credit (see section 30B(h)(8)); the in section 704(d), Regulations section 1.163(j)-6(h)). This
alternative fuel vehicle refueling property credit (see section 30C(e) information is necessary if your losses are limited under section
(5)); or the new qualified plug-in electric drive motor vehicle credit 704(d). Deductible business interest expense is reported elsewhere
(see section 30D(f)(5)). on Schedule K-1 and the total amount is reported here for
Code J. Look-back interest—completed long-term contracts. information only and was already included as a deduction on
The partnership will report any information you need to figure the another line of your Schedule K-1. Included in the code N
interest due or to be refunded under the look-back method of section information is a statement providing the allocation of the business

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interest expense already deducted by the partnership by line from your other gross income at the highest marginal ordinary
number on Schedule K-1. income or capital gains tax rate. Attach a statement to your federal
income tax return to show your computation of both the tax and
The partner must remove the business interest expense interest for a nonqualified withdrawal. Include the tax and interest on
! deductions from these referenced lines when computing any Schedule 2 (Form 1040), line 17z. In the space to the left of line 17z,
CAUTION basis limitation.
enter the amount of tax and interest and “CCF.” See Pub. 595 for
Any excess business interest expense not deductible under details.
section 163(j) will be included in box 13, code K, for inclusion in the Code T. Depletion information—oil and gas. This is your share
basis limitation and is not reported here. See Worksheet for of gross income from the property, share of production for the tax
Adjusting the Basis of a Partner's Interest in the Partnership for year, and other information needed to figure your depletion
additional information about computing the loss limitation. deduction for oil and gas wells. The partnership should also allocate
Code O. Section 453(l)(3) information. The partnership will to you a share of the adjusted basis of each partnership oil or gas
report any information you need to figure the interest due under property. See Pub. 535 for details on how to figure your depletion
section 453(l)(3) with respect to the disposition of certain timeshares deduction.
and residential lots on the installment method. If you are an Code U. Section 743(b) basis adjustment. The partnership will
individual, report the interest on Schedule 2 (Form 1040), line 14. provide your section 743(b) adjustment, net of cost recovery, by
Code P. Section 453A(c) information. The partnership will report asset grouping. See IRS.gov/forms-pubs/clarifications-for-
any information you need to figure the interest due under section disregarded-entity-reporting-and-section-743b-reporting for more
453A(c) with respect to certain installment sales. This information information.
will include the following from each Form 6252 where line 5 is Code V. Unrelated business taxable income. The partnership
greater than $150,000. will report any information you need to figure unrelated business
1. Description of property. taxable income under section 512(a)(1) (but excluding any
2. Date acquired. modifications required by paragraphs (8) through (15) of section
512(b)) for a partner that is a tax-exempt organization.
3. Date property sold.
4. Selling price, including mortgages and other debts (not A partner is required to notify the partnership of its
including interest, whether stated or unstated), less mortgages, TIP tax-exempt status.
debts, and other liabilities the buyer assumed or took the property
subject to. Code W. Precontribution gain (loss). If the partnership
5. Gross profit. distributed any property with precontribution gain or loss to any
6. Gross profit percentage. partner other than the contributing partner, and the date of the
distribution was within 7 years of the date the property was
7. Contract price less (4) above, plus payments received during contributed to the partnership, the contributing partner must
the year, not including interest, whether stated or unstated. recognize a gain or loss under section 704(c)(1)(B). If the
8. Payments received in prior years, not including interest partnership made such a distribution during its tax year, it will enter
whether stated or unstated. code W in box 20 of the contributing partner's Schedule K-1 and
9. Installment sale income. attach a statement providing the amount of the partner's
precontribution gain (loss) and identifying the character of the gain
10. Character of the income—capital or ordinary. or loss (for example, capital gain (loss) or section 1231 gain (loss)).
11. Partner's share of the deferred obligation. See computation Report the precontribution gain or loss on Form 8949 and/or
below. Schedule D (Form 1040) or Form 4797 in accordance with the
information provided by the partnership.
Deferred obligation computation. For each Form 6252 where
line 5 is greater than $150,000, figure the Schedule K-1 deferred Code X. Reserved for future use.
obligation as follows. Code Y. Net investment income. The partnership may use this
• Item 4 from the list above, less the sum of items 7 and 8. This code Y to report information you may need to determine your net
equals the Schedule K deferred obligation. investment income tax under section 1411 that is not reported
• Multiply the Schedule K deferred obligation by the partner’s profit elsewhere on the Schedule K-1 or K-3. Code Y is used to report
percentage. This equals the partner’s share of the deferred information not provided elsewhere on Schedule K-3 (or an
obligation. attachment) regarding income from CFCs and passive foreign
If you are an individual, report the interest on Schedule 2 (Form investment companies (PFICs) the stock of which is owned by the
1040), line 15. See the Form 6252 instructions for more information. partnership. For CFCs and PFICs that you treat as qualified electing
Also see section 453A(c) for details on how to figure the interest. funds (QEFs), the information that is relevant to you will depend on
Code Q. Section 1260(b) information. The partnership will report whether you, the partnership, or a lower-tier entity has made an
any information you need to figure the interest due under section election under Regulations section 1.1411-10(g) with respect to the
1260(b). If the partnership had gain from certain constructive CFC or QEF. For example, if the partnership made an election under
ownership transactions, your tax liability must be increased by the Regulations section 1.1411-10(g) for a CFC the stock of which is
interest charge on any deferral of gain recognition under section owned by the partnership, and the relevant income and deduction
1260(b). Report the interest on Schedule 2 (Form 1040), line 17z. items derived from that CFC are reported elsewhere on the
Enter “1260(b)” and the amount of the interest in the space to the left Schedule K-3, then you will not need the information provided in
of line 17z. See section 1260(b) for details, including how to figure code Y to complete your Form 8960.
the interest. If you are an individual who is a U.S. citizen or resident, or a
domestic trust or estate, follow the Instructions for Form 8960 to
Code R. Interest allocable to production expenditures. The figure and report your net investment income and AGI or MAGI.
partnership will report any information you need relating to interest Corporate partners are not subject to the net investment income tax.
you are required to capitalize under section 263A for production See Regulations sections 1.1411-1 through -10 for details.
expenditures. See Regulations sections 1.263A-8 through
1.263A-15 for details. Code Z. Section 199A information. Generally, you may be
allowed a deduction of up to 20% of your net qualified business
Code S. Capital construction fund (CCF) nonqualified with- income (QBI) plus 20% of your qualified REIT dividends, also known
drawals. The partnership will report your share of nonqualified as section 199A dividends, and qualified PTP income from your
withdrawals from a CCF. These withdrawals are taxed separately partnership. The partnership will provide the information you need to

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figure your deduction. Use one of these forms to figure your QBI Code AB. Section 751 gain (loss). This code is used to report the
deduction. partner's share of gain or loss on the sale of the partnership interest
1. Use Form 8995, Qualified Business Income Deduction subject to taxation at ordinary income tax rates.
Simplified Computation, if all of the following apply.
Code AC. Section 1(h)(5) gain (loss). This code is used to report
a. You have QBI, section 199A dividends, or PTP income the partner’s share of gain or loss on the sale of the partnership
(defined below). interest subject to taxation at the rate for collectible assets as
b. Your 2022 taxable income before the QBI deduction is equal defined in section 1(h)(5).
to or less than $170,050 ($340,100 if married filing jointly). Code AD. Deemed section 1250 unrecaptured gain. This code
c. You aren’t a patron in a specified agricultural or horticultural is used to report the partner’s share of gain or loss on the sale of the
cooperative. partnership interest subject to taxation at the rate for unrecaptured
2. Use Form 8995-A, Qualified Business Income Deduction, if section 1250 gain assets as defined in section 1(h)(6).
you don't meet all three of the above requirements. Code AE. Excess taxable income. If the partnership was required
Use the information provided by your partnership to complete the to file Form 8990, it may determine it has excess taxable income.
appropriate form listed above. For definitions and more information, Report the amount of excess taxable income on Form 8990,
see the Instructions for Form 8995 or the Instructions for Form Schedule A, line 43, column (f), if you are required to file Form 8990.
8995-A, as appropriate. See the Instructions for Form 8990 for additional information.
QBI/qualified PTP items subject to partner-specific Code AF. Excess business interest income. If the partnership is
determinations. The amounts reported to you reflect your required to file Form 8990, it may determine it has excess business
distributive share of items from the partnership’s trade(s), interest income. Enter the amount of excess business interest
business(es), or aggregation(s), and may include items that are not income on Form 8990, Schedule A, line 43, column (g), if you are
includible in your calculation of the QBI deduction. When required to file Form 8990. See the Instructions for Form 8990 for
determining QBI or qualified PTP income, you must include only additional information.
those items that are qualified items of income, gain, deduction, and
loss included or allowed in determining taxable income for the tax Code AG. Gross receipts for section 448(c). Regulations
year. To determine your QBI or your qualified PTP income amounts section 1.163(j)-2(d)(2)(iii) requires that partners in a partnership
and for information on where to report them, see the Instructions for include a share of partnership gross receipts in proportion to their
Form 8995 or the Instructions for Form 8995-A, as appropriate. share of gross income under section 703 (unless the partnership is
W-2 wages. The amounts reported reflect your distributive share treated as one person under the aggregation rules of section
of the partnership’s W-2 wages allocable to the QBI of each qualified 448(c)). Partnerships with current year gross receipts (defined in
trade, business, or aggregation. See the Instructions for Form 8995 Regulations section 1.448-1T(f)(2)(iv)) greater than $5 million are
or the Instructions for Form 8995-A, as appropriate. required to report to their partners their distributive share of current
year gross receipts, as well as their distributive share of gross
Unadjusted basis immediately after acquisition (UBIA) of receipts for the 3 immediately preceding tax years. If a partnership
qualified property. The amounts reported reflect your distributive and a partner are treated as a single employer under the section
share of the partnership’s UBIA of qualified property of each 448(c) aggregation rules, and the partnership has current year gross
qualified trade, business, or aggregation. See the Instructions for receipts greater than $5 million, then the partnership should also
Form 8995 or the Instructions for Form 8995-A, as applicable. report its total current year gross receipts, as well as its total gross
Section 199A dividends. The amount reported reflects your receipts for the 3 immediately preceding tax years, to that partner.
distributive share of the partnership's net section 199A dividends. See IRS.gov/newsroom/faqs-regarding-the-aggregation-rules-
See the Instructions for Form 8995 or the Instructions for Form under-section-448c2–that-apply-to-the-section-163j-small-business-
8995-A, as applicable. exemption.
Patrons of specified agricultural and horticultural
cooperatives. If the partnership was a patron of an agricultural or If a partner needs gross receipts information from a partnership in
horticultural cooperative (specified cooperative), you must use Form order to figure the gross receipts test under section 448(c), and the
8995-A to figure your QBI deduction. You must also complete partnership did not report gross receipts on the Schedule K-1, the
Schedule D (Form 8995-A), Special Rules for Patrons of Agricultural partner should request this information from the partnership.
or Horticultural Cooperatives, to determine your patron reduction. Code AH. Other information. The partnership will report the
QBI items allocable to qualified payments from specified following.
cooperatives subject to partner-specific determinations. The • Any information a PTP needs to determine whether it meets the
amounts reported to you reflect your distributive share of items from 90% qualifying income test of section 7704(c)(2).
the partnership’s trade(s), business(es), or aggregation(s), and A partner is required to notify the partnership of its status as
include items that may not be includible in your calculation of the TIP a PTP.
QBI deduction and patron reduction. When determining QBI items
allocable to qualified payments, you must include only qualified Any information you need to complete a disclosure statement for
items that are included or allowed in determining taxable income for •
the tax year. To determine your QBI items allocable to qualified reportable transactions in which the partnership participates. If the
payments, see the Instructions for Form 8995-A. partnership participates in a transaction that must be disclosed on
Form 8886, Reportable Transaction Disclosure Statement, both you
W-2 wages allocable to qualified payments from specified and the partnership may be required to file Form 8886 for the
cooperatives. The amounts reported reflect your distributive share transaction. The determination of whether you are required to
of the partnership's W-2 wages allocable to the qualified payments disclose a transaction of the partnership is based on the category(s)
of each qualified trade, business, or aggregation. See the under which the transaction qualifies for disclosure and is
Instructions for Form 8995-A. determined by you and the partnership. You may have to pay a
Section 199A(g) deduction from specified cooperatives. penalty if you are required to file Form 8886 and do not do so. See
The amount reported reflects your distributive share of the the Instructions for Form 8886 for details.
partnership’s net section 199A(g) deduction. See the Instructions for • Interest and additional tax on compensation deferred under a
Form 8995-A. section 409A nonqualified deferred compensation plan that doesn't
Code AA. Section 704(c) information. The partnership will show meet the requirements of section 409A. See section 409A(a)(1)(B)
the portion of income or deduction items allocated to you under to figure the interest and additional tax on this income. Report this
section 704(c). These items are included elsewhere in other income interest and tax on Schedule 2 (Form 1040), line 17h. This income is
or deduction items on Schedule K-1. included in the amount in either box 4a, Guaranteed payments for
services; or box 4b, Guaranteed payments for capital.

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• Noncash charitable contributions. If the partnership made a columns (c), (d), and (e), respectively. Only the amount of the total
noncash charitable contribution, your share of the partnership’s remedial income allocated to the U.S. transferor will be included on
adjusted basis in the property is limited to basis and is reported Schedule K-1, Part III, box 1. Any recognized gain due to an
here. acceleration event or section 367 transfer must be separately
• Inversion gain. The partnership will provide a statement showing reported by the U.S. transferor on its own federal income tax return.
the amounts of each type of income or gain that is included in For all other partners of the section 721(c) partnership, a separate
inversion gain. The partnership has included inversion gain in code AH is used to provide the remedial items allocated to that
income elsewhere on Schedule K-1. Inversion gain is also reported partner relating to section 721(c) property that was taken into
under code AH because your taxable income and alternative account to determine Part III, box 1. See Regulations sections
minimum taxable income cannot be less than the inversion gain. 1.721(c)-3 and 1.721(c)-6.
Also, your inversion gain (a) isn't taken into account in figuring the • Excess business loss limitation. If the partnership has deductions
net operating loss (NOL) for the tax year or the NOL that can be attributable to a business activity, it will provide a statement showing
carried over to each tax year, (b) may limit your credits, and (c) is your distributive share of the aggregate gross income or gain, and
treated as income from sources within the United States for the aggregate deductions, from the business activity of all of the
foreign tax credit. See section 7874 for details. partnership's trades or businesses. You can use this to figure any
• Qualifying advanced coal project property. Use the amounts the excess business loss limitation that may apply. See section 461(l)
partnership provides you to figure the amounts to report on Form and Form 461 and its instructions for details.
3468, lines 5a through 5c. • Section 1061 information. The partnership will furnish to the
• Qualifying gasification or advanced energy project property. Use partners any information needed to figure their capital gains with
the amounts the partnership provides you to figure the amounts to respect to an applicable partnership interest. See Section 1061
report on Form 3468, lines 6a and 6b. Reporting Instructions in Pub. 541.
• Qualified investment in advanced manufacturing investment • Partner’s share of the adjusted basis of noncash and capital gain
facility property. Use the amount the partnership provides you to property contributions, and share of the excess of the FMV over the
figure the amount to report on Form 3468, line 7. adjusted basis of noncash and capital gain property contributions.
• The information needed to complete Form 8990, Schedule A, for • If the partnership reported an amount in box 20, code V, the
foreign partners which are required to report their allocable share of partnership also reported an IRA partner's unique EIN in box 20,
excess business interest expense, excess taxable income, and code AH. See the Instructions for Form 990-T; and Pub. 598, Tax on
excess business interest income, if any, that is attributable to Unrelated Business Income of Exempt Organizations.
income effectively connected with a U.S. trade or business. When • Any other information you may need to file your return not shown
required, the partnership will make this report on an attached elsewhere on Schedule K-1.
statement to partners that are a foreign corporation or a nonresident The partnership should give you a description and the amount of
alien or partners that are a partnership (domestic or foreign) in which your share for each of these items.
the reporting partnership knows, or has a reason to know, that one
or more of the partners is a foreign corporation or nonresident alien
• Conservation reserve program payments. Individuals who Box 21. Foreign Taxes Paid or
received social security retirement or disability benefits, and are
partners in farm partnerships that receive conservation reserve Accrued
program payments, do not pay self-employment tax on their portion Foreign taxes paid or accrued reduce a partner's basis and are
of the payments. The partnership will report your portion of the limited to basis. Do not use this amount to complete your Form 1116
conservation reserve program payments in box 20 using code AH. or 1118. See Schedule K-3 to complete your Form 1116 or 1118.
See Schedule SE (Form 1040) for information on excluding the
payment from your calculation of self-employment tax.
• Gross income and gains, as well as losses and deductions Box 22. More Than One Activity for
attributable to a farming or fishing trade, or business of the
partnership. At-Risk Purposes
• If a partnership is a trader in securities, commodities, or both, and When the partnership has more than one activity for at-risk
has properly elected under section 475(f) to mark to market the purposes, it will check this box and attach a statement. Use the
securities, the commodities, or both, the partnership reports ordinary information in the attached statement to correctly figure your at-risk
gain or loss from the securities or commodities (or both securities limitation. For more information, see the discussion under At-Risk
and commodities) trading activities separately from any other Limitations, earlier.
ordinary gain or loss.
• If the partnership is a section 721(c) partnership, the partnership
should include the amounts relating to any remedial items made Box 23. More than One Activity for
under the remedial allocation method (described in Regulations Passive Activity Purposes
section 1.704-3(d) and Regulations section 1.704-3(d)(5)(iii)) with
respect to section 721(c) property allocable to each partner. The When the partnership has more than one activity for passive activity
partnership will include a separate code AH for the total remedial purposes, it will check this box and attach a statement. Use the
income, if any, allocated to the U.S. transferor; total gain recognized information in the attached statement to correctly figure your passive
due to an acceleration event; or total gain recognized due to a activity limitation. For more information, see the discussion under
section 367 transfer reflected on Form 8865, Schedule G, Part II, Passive Activity Limitations, earlier.

List of Codes and References Used in Schedule K-1 (Form 1065)
Box Number / Item Where to report or where to find further reporting information.
Page numbers refer to these instructions.
1. Ordinary business income (loss). Determine whether the income (loss) is passive or
nonpassive and enter on your return as follows.
Passive loss See page 9
Passive income Schedule E (Form 1040), line 28, column (h)
Nonpassive loss See page 9
Nonpassive income Schedule E (Form 1040), line 28, column (k)
2. Net rental real estate income (loss) See page 9

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Box Number / Item Where to report or where to find further reporting information.
Page numbers refer to these instructions.
3. Other net rental income (loss)
Net income Schedule E (Form 1040), line 28, column (h)
Net loss See Instructions for Form 8582
4a. Guaranteed payment services See Instructions for Schedule E (Form 1040)
4b. Guaranteed payment capital See Instructions for Schedule E (Form 1040)
4c. Guaranteed payment total See page 9
5. Interest income Form 1040 or 1040-SR, line 2b
6a. Ordinary dividends Form 1040 or 1040-SR, line 3b
6b. Qualified dividends Form 1040 or 1040-SR, line 3a
6c. Dividend equivalents See page 10
7. Royalties Schedule E (Form 1040), line 4
8. Net short-term capital gain (loss) Schedule D (Form 1040), line 5
9a. Net long-term capital gain (loss) Schedule D (Form 1040), line 12
9b. Collectibles (28%) gain (loss) 28% Rate Gain Worksheet, line 4 (Schedule D instructions)
9c. Unrecaptured section 1250 gain See page 10
10. Net section 1231 gain (loss) See page 10
11. Other income (loss)
Code A. Other portfolio income (loss) See page 10
Code B. Involuntary conversions See page 11
Code C. Section 1256 contracts & straddles Form 6781, line 1
Code D. Mining exploration costs recapture See Pub. 535
Code E. Cancellation of debt See page 11
Code F. Section 743(b) positive adjustments See page 11
Code G. Reserved for future use
Code H. Section 951(a) income inclusions See page 11
Code I. Other income (loss) See page 11
12. Section 179 deduction See page 12
13. Other deductions
Code A. Cash contributions (60%) See page 12
Code B. Cash contributions (30%) See page 12
Code C. Noncash contributions (50%) See page 12
Code D. Noncash contributions (30%) See page 13
Code E. Capital gain property to a 50% organization (30%) See page 13
Code F. Capital gain property (20%) See page 13
Code G. Contributions (100%) See page 13
Code H. Investment interest expense Form 4952, line 1
Code I. Deductions—royalty income Schedule E (Form 1040), line 19
Code J. Section 59(e)(2) expenditures See page 13
Code K. Excess business interest expense See page 13
Code L. Deductions—portfolio income (other) Schedule A (Form 1040), line 16
Code M. Amounts paid for medical insurance Schedule A (Form 1040), line 1; or Schedule 1 (Form 1040), line 17
Code N. Educational assistance benefits See page 13
Code O. Dependent care benefits Form 2441, line 12
Code P. Preproductive period expenses See page 13
Code Q. Reserved for future use
Code R. Pensions and IRAs See page 13
Code S. Reforestation expense deduction See page 14
Codes T through U. Reserved for future use
Code V. Section 743(b) negative adjustments See page 14
Code W. Other deductions See page 14
Code X. Reserved for future use
14. Self-employment earnings (loss)
Note. If you have a section 179 deduction or any partner-level deductions, see page 14 before completing Schedule SE (Form 1040).
Code A. Net earnings (loss) from self-employment Schedule SE (Form 1040)
Code B. Gross farming or fishing income See page 14
Code C. Gross nonfarm income See page 14
15. Credits
Code A. Reserved for future use
Code B. Reserved for future use
Code C. Low-income housing credit (section 42(j)(5)) from post-2007 buildings See page 15
Code D. Low-income housing credit (other) from post-2007 buildings See page 15
Code E. Qualified rehabilitation expenditures (rental real estate) See page 15
Code F. Other rental real estate credits See page 15
Code G. Other rental credits See page 15

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Box Number / Item Where to report or where to find further reporting information.
Page numbers refer to these instructions.
Code H. Undistributed capital gains credit Schedule 3 (Form 1040), line 13a
Code I. Biofuel producer credit See page 15
Code J. Work opportunity credit See page 15
Code K. Disabled access credit See page 15
Code L. Empowerment zone employment credit See page 15
Code M. Credit for increasing research activities See page 15
Code N. Credit for employer social security and Medicare taxes See page 15
Code O. Backup withholding See page 15
Code P. Other credits See page 15
17. Alternative minimum tax (AMT) items
Code A. Post-1986 depreciation adjustment See Instructions for Form 6251
Code B. Adjusted gain or loss See Instructions for Form 6251
Code C. Depletion (other than oil & gas) See Instructions for Form 6251
Code D. Oil, gas, and geothermal—gross income See Instructions for Form 6251
Code E. Oil, gas, and geothermal—deductions See Instructions for Form 6251
Code F. Other AMT items See Instructions for Form 6251
18. Tax-exempt income and nondeductible expenses
Code A. Tax-exempt interest income Form 1040 or 1040-SR, line 2a
Code B. Other tax-exempt income See page 16
Code C. Nondeductible expenses See page 16
19. Distributions
Code A. Cash and marketable securities See page 16
Code B. Distribution subject to section 737 See page 16
Code C. Other property See page 17
20. Other information
Code A. Investment income Form 4952, line 4a
Code B. Investment expenses Form 4952, line 5
Code C. Fuel tax credit information Form 4136
Code D. Qualified rehabilitation expenditures (other than rental real estate) See page 17
Code E. Basis of energy property See page 17
Code F. Recapture of low-income housing credit for section 42(j)(5) partnerships See page 17
Code G. Recapture of low-income housing credit for other partnerships See page 17
Code H. Recapture of investment credit See Form 4255
Code I. Recapture of other credits See page 17
Code J. Look-back interest—completed long-term contracts See Form 8697
Code K. Look-back interest—income forecast method See Form 8866
Code L. Dispositions of property with section 179 deductions See page 17
Code M. Recapture of section 179 deduction See page 18
Code N. Business interest expense (information item) See page 18
Code O. Section 453(l)(3) information Schedule 2 (Form 1040), line 14
Code P. Section 453A(c) information Schedule 2 (Form 1040), line 15
Code Q. Section 1260(b) information Schedule 2 (Form 1040), line 17z
Code R. Interest allocable to production expenditures See Regulations sections 1.263A-8 through 15
Code S. Capital construction fund (CCF) nonqualified withdrawals Schedule 2 (Form 1040), line 17z
Code T. Depletion deduction See Pub. 535
Code U. Section 743(b) basis adjustment See page 18
Code V. Unrelated business taxable income See page 18
Code W. Precontribution gain (loss) Form 8949 and/or Schedule D (Form 1040); or Form 4797
Code X. Reserved for future use
Code Y. Net investment income See Instructions for Form 8960
Code Z. Section 199A information Form 8995 or Form 8995-A
Code AA. Section 704(c) information See page 19
Code AB. Section 751 gain (loss) See page 19
Code AC. Section 1(h)(5) gain (loss) See page 19
Code AD. Deemed section 1250 unrecaptured gain See page 19
Code AE. Excess taxable income See Instructions for Form 8990
Code AF. Excess business interest income See page 19
Code AG. Gross receipts for section 448(c) See page 19
Code AH. Other information See page 20
21. Foreign taxes paid or accrued See page 20

-22- Partner's Inst. for Sch. K-1 (Form 1065) (2022)

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