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                                                                                                           • Section 617 (deduction and recapture of cer-
                                                     State of Hawaii                                         tain mining exploration expenditures, paid or 
                                                                                                             incurred).
                                                     Department of Taxation 
(REV. 2023)2023                                                                                            Additional information.—For more information 
                                                                                                           on the treatment of partnership income, deduc-
                                                                                                           tions, etc., see federal Publication 541, Partner-
                                                                                                           ships; and federal Publication 535, Business Ex-
Partner’s Instructions for                                                                                 penses.
Schedule K-1 (Form N-20)                                                                                   Specific Instructions
(For Partner’s Use Only)                                                                                   Name, address, and  identifying  number.—
(Section references are to the Internal Revenue Code unless otherwise noted.)                              Your name, address, and identifying number, as 
                                                                                                           well as the partnership’s name, address, and 
                                                                                                           identifying number, should be entered.
Where to Get Tax Forms                               Schedule  K-1 (and  any attached schedules)  or       Item B.—Check the box if the partner is a disre-
                                                     similar  statement, consistent  with the way the      garded entity (DE) and enter the DE’s FEIN and 
Hawaii  tax forms, instructions, and  schedules      partnership treated the items on its filed return.    name.
may be obtained at any taxation district office or   This rule does not apply  if your partnership  is     Item D.—Item D should show your share of the 
from  the  Department of  Taxation’s  website at     within the “small partnership exception” and does     partnership’s nonrecourse liabilities, partnership-
tax.hawaii.gov, or you may contact a customer        not elect to have the tax treatment of partnership    level qualified nonrecourse financing, and other 
service representative  at: 808-587-4242  or         items determined at the partnership level.            liabilities  as  of  the  end of  the  partnership’s  tax 
1-800-222-3229 (Toll-Free).
                                                       If the treatment on your original or amended        year. If you terminated your interest in the part-
Purpose of Schedule K-1                              return is (or may be) inconsistent with the part-     nership during the tax year, Item D should show 
                                                     nership’s treatment, or if the partnership was re-    the share that existed immediately before the to-
The partnership uses Schedule K-1 to  report         quired to, but has not filed a return, you must file  tal disposition. A partner’s “other liability” is, gen-
your share of the partnership’s income, credits,     federal Form 8082, Notice of Inconsistent Treat-      erally, any partnership liability for which a partner 
deductions,  etc. Please  keep it for your re-       ment  or Administrative Adjustment  Request           is personally liable.
cords. Do not file it with your tax return un-       (AAR), with  your original  or amended  return to       Use the total of the three amounts for comput-
less otherwise instructed.  A copy has been          identify and explain the inconsistency (or to note    ing the adjusted basis of your partnership inter-
filed  with  the  Department  of  Taxation  (Depart- that a partnership return has not been filed).        est.
ment).
 Although the partnership is not subject to in-      Errors.—If you believe the partnership has made         Generally, you may use only  the amounts 
                                                     an error on your Schedule K-1, notify the partner-    shown next to “Qualified nonrecourse financing” 
come tax, you are liable for tax on your share of    ship and ask for a corrected Schedule K-1.     Do     and “Other” to compute your amount at risk. Do 
the partnership income, whether or not distribut-    not change any items on your copy. Be sure that       not  include any amounts that  are not  at  risk  if 
ed, and you must include your share on your tax      the partnership sends a copy of  the corrected        such amounts are included in either of these cat-
return.                                              Schedule K-1 to the Department. However, see          egories.
 The amount of loss and deduction  that you          Inconsistent treatment of items above.                  If your partnership is engaged in two or more 
may claim on your tax return may be less than        Sale or exchange of partnership interest.—            different types of at-risk activities, or a combina-
the amount reported on Schedule K-1. Generally,      Generally, if a partner sells or exchanges a part-    tion of at-risk activities and any other activity, the 
the amount of loss and deduction you may claim       nership interest where unrealized receivables or      partnership should give you a statement showing 
is limited to your basis in the partnership and the  substantially appreciated inventory items are in-     your share of nonrecourse liabilities, partnership-
amount for which you are considered at risk. If      volved, the partner must notify the partnership, in   level qualified nonrecourse financing, and other 
you have losses, deductions,  or credits from a      writing, within 30 days of the exchange. An ex-       liabilities for each activity.
passive activity, you must also apply the passive    ception to this rule is made in the case of sales or    Qualified  nonrecourse  financing     secured 
activity rules. It is the partner’s responsibility   exchanges of publicly traded partnership interest     by real property used in an activity of holding real 
to consider and apply any applicable limita-         for which a broker is required to file federal Form   property that is subject to the at-risk rules is treat-
tions. See Limitations on Losses and Deduc-          1099-B. See federal Form 8308, Report of a Sale       ed as an amount at risk. Qualified nonrecourse 
tions, on page 2, for more information.              or Exchange of Certain Partnership Interests, for     financing generally includes financing for which 
 Use these instructions to help you report the       the types of unrealized receivables involved.         no one is personally liable for repayment that is 
items shown on Schedule K-1 on your tax return.
                                                                                                           borrowed  for use in an activity of holding  real 
 Where “(attach schedule)” appears beside a          Definitions                                           property and that is loaned or guaranteed by a 
line item, it means you should see the schedule      General partner.—A general partner is a mem-          federal, state, or local government or borrowed 
that the partnership has attached for that line or   ber of the organization who is personally liable      from  a  “qualified”  person.  Qualified  persons  in-
the space provided on page 2 of Schedule K-1.        for obligations of the partnership.                   clude any person actively and regularly engaged 
 Schedule K-1  provides you with information         Limited partner.—A limited partner is one whose       in the business of lending money, such as a bank 
relating to the source of your share of the income   potential personal liability for partnership debts is or  savings  and  loan  association.  Qualified  per-
of the partnership. How this income is reported      limited to the amount of money or other property      sons generally do not include related parties (un-
by you to the State of Hawaii depends on your        that the partner contributed or is required to con-   less  the  nonrecourse  financing  is  commercially 
residency status. Partners who are Hawaii resi-      tribute to  the  partnership. Some members of         reasonable and on substantially the same terms 
dents are to report the income and deductions        other entities, such as business trusts or limited    as loans involving unrelated persons), the seller 
attributable everywhere, and the credits attribut-   liability companies that are classified as partner-   of the property, or a person who receives a fee for 
able to Hawaii. Partners who are not residents of    ships, may be treated as limited partners for cer-    the partnership’s investment in the real property.  
Hawaii or who are part-year residents of Hawaii      tain purposes.                                        See federal Publication 925 for more informa-
are to use the income, deduction, and credit         Nonrecourse loans.—Nonrecourse  loans are             tion on qualified nonrecourse financing.
amounts  attributable  to Hawaii  and  attributable  those liabilities of the partnership for which none     Both the partnership and you must meet the 
everywhere in preparing their Hawaii income tax      of the partners has any personal liability.           qualified  nonrecourse  rules  on  this  debt  before 
returns. Resident partners may make an adjust-                                                             you can include the amount shown next to “Qual-
ment to income reported on their net income tax      Elections.—Generally,  the  partnership decides 
return for interest penalty on early withdrawal of   how to figure taxable income from its operations.     ified nonrecourse financing” in your at-risk com-
savings  if a penalty  was imposed  on the early     For example, it chooses the accounting method         putation.
withdrawal of savings by the partnership and the     and depreciation methods it will use.                   See   Limitations on  Losses, and Deduc-
interest income is not attributable to Hawaii. See     However, certain elections are made by you          tions for more information on the at-risk limita-
the Instructions for  Form  N-11.  The amount of     separately on your income tax return and not by       tions.
this deduction should be reported on line 37.        the partnership. These elections are made under       Item E.—If the box in Item E is checked, you are 
                                                     the following code sections:                          a partner  in a publicly  traded  partnership  and 
General Information                                  • Section 108(b)(5) (income from discharge of         must follow the rules with respect to publicly trad-
Inconsistent  treatment of items.—Generally,           indebtedness); and                                  ed partnerships. For  additional information see 
you must report partnership items shown on your                                                            the Instructions for federal Form 8582.

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Lines 1 - 37 At-Risk Rules a. If income is reported on line 1, report the
income on Form N-15, line 17. However,
If you are an individual partner, take the amounts Generally, if you have (1) a loss or other deduc- if the box in Item E is checked, report
shown in column (b) and/or column (c) and enter tion from any activity carried on as a trade or the income following the rules for Pub-
them on the appropriate worksheet and/or lines business or for the production of income by the licly traded partnerships discussed in
of your tax return as indicated in column (d). If partnership and (2) amounts in the activity for the federal instructions for Schedule K-1
you are not an individual partner, report the which you are not at risk, you will have to com- (Form 1065).
amounts in column (c) as instructed on your tax plete federal Form 6198, At-Risk Limitations, to
return. figure the allowable loss to report on your return. b. If a loss is reported on line 1, report the
loss following the instructions for federal
The line number references in column (d) are The at-risk rules generally limit the amount of Form 8582, to determine how much of
references to forms in use for calendar year loss (including loss on disposition of assets) and the loss can be reported on Form N-15,
2023. If you file your tax return on a calendar other deductions (such as the section 179 ex- line 17. However, if the box in Item E is
year basis, but your partnership files a return for pense deduction) that you can claim to the checked, report the loss following the
a fiscal year, you must enter the amounts shown amount you could actually lose in the activity. rules for Publicly traded partnerships
in column (b) and/or column (c) on your tax return Generally, you are not at risk for amounts discussed in the federal instructions for
for the year in which the partnership’s fiscal year such as the following: Schedule K-1 (Form 1065).
ends.
If you have losses and deductions etc., from a • Nonrecourse loans used to finance the activ- Line 2. Income or loss from rental real estate
ity, to acquire property used in the activity, or activities.—Generally, the income (loss) report-
prior year that were not deductible or usable be- to acquire your interest in the activity, that are ed on line 2 is a passive activity amount for all
cause of certain limitations, such as the at-risk not secured by your own property (other than partners. There is an exception, however, for
rules, they may be taken into account in deter- that used in the activity). See Item D, on page losses from a qualified low-income housing proj-
mining your net income, loss, etc., for this year. 1, for the exception for qualified nonrecourse ect. The loss limitations of section 469 do not ap-
However, do not combine the prior-year amounts financing secured by real property. ply to qualified investors in qualified low-income
with any amounts shown on this Schedule K-1 to
get a net figure to report on any supporting • Cash, property, or borrowed amounts used in housing projects. The partnership will have at-
schedules, statements, or forms (such as federal the activity (or contributed to the activity, or tached a schedule for line 2 to identify such
Schedule E, Supplemental Income and Loss) at- used to acquire your interest in the activity) amounts, if applicable.
tached to your return. Instead, report the amounts that are protected against loss by a guaran- Use the following instructions to determine
on the attached schedule, statement, or form on tee, stop-loss agreement, or other similar ar- where to enter a line 2 amount:
a year-by-year basis. rangement (excluding casualty insurance and 1. If you have a loss (other than from a qualified
insurance against tort liability).
If you have amounts, other than those shown low-income housing project) on line 2 and you
on Schedule K-1, to report on federal Schedule • Amounts borrowed for use in the activity from meet all of the following conditions, enter the
E, enter each item on a separate line of Part II of a person who has an interest in the activity, loss on Form N-15, line 17:
Schedule E. other than as a creditor, or who is related, un- a. You determined that you actively partici-
der section 465(b)(3), to a person (other than pated in the partnership rental real estate
Lines 1 - 3 yourself) having such an interest. activities. (See Special allowance for a
The amounts shown on lines 1 through 3 reflect To help you complete federal Form 6198, the rental real estate activity discussed in
your share of income or loss from partnership partnership should give you your share of the to- the federal instructions for Schedule K-1
business or rental operations without reference tal pre-1976 losses from a section 465(c)(1) ac- (Form 1065).)
to limitations on losses or adjustments that may tivity for which there existed a corresponding b. Rental real estate activities with active
be required of you because of (1) the adjusted amount of nonrecourse liability at the end of the participation were your only passive activi-
basis of your partnership interest, (2) the amount year in which the losses occurred. In addition, ties.
for which you are at risk as determined under you should get a separate statement of income,
section 465, or (3) the passive activity limitations expenses, etc., for each activity from the partner- c. You have no prior year unallowed losses
of section 469. Information on these provisions is ship. from these activities.
given below. d. Your total loss from the rental real estate
Passive Activity Limitations activities was not more than $25,000
Limitations on Losses and See the federal instructions for Schedule K-1 (not more than $12,500 if married filing
Deductions (Form 1065) for a discussion on passive activity separately and you lived apart from your
Basis Rules limitations. spouse all year).
Generally, you may not claim your share of a e. If you are a married person filing sepa-
partnership loss (including capital loss) that is Line-by-Line Instructions rately, you lived apart from your spouse all
greater than the adjusted basis of your partner- In general, for Form N-11 filers, if your federal year.
ship interest at the end of the partnership’s tax Schedule K-1 (Form 1065) and Hawaii Schedule f. You have no current or prior year unal-
year. K-1 (Form N-20) are different, the necessary ad- lowed credits from a passive activity.
Items which increase your basis are: justments are to be made in the Hawaii Additions g. Your modified adjusted gross income was
Worksheet and/or Hawaii Subtractions Work- not more than $100,000 (not more than
• Money and your adjusted basis in property sheet in the Form N-11 Instructions. $50,000 if married filing separately and
contributed to the partnership. you lived apart from your spouse all year).
• Your share of the partnership’s income. Income h. Your interest in the rental real estate activ-
• Your share of the increase in the liabilities of Line 1. Ordinary income (loss) from trade or ity was not held as a limited partner.
the partnership (or your individual liabilities business activities.—The amount reported for 2. If you have a loss on line 2 (other than from
caused by your assumption of partnership li- line 1 is your share of the ordinary income (loss) a qualified low-income housing project), and
abilities). from the trade or business activities of the part- you do not meet all of the conditions in 1
Items which decrease your basis are: nership. Generally, where you report this amount above, report the loss following the instruc-
• Money and the adjusted basis of property dis- depends on whether or not the amount is from an tions for federal Form 8582 to determine how
tributed to you. activity that is a passive activity to you. If you are much of the loss can be reported on Form
an individual partner filing your 2023 Form N-15, N-15, line 17. However, if the box in Item E
• Your share of the partnership’s losses. find your situation in the following guide and re- is checked, report the loss following the rules
• Your share of the decrease in the liabilities of port your line 1 income (loss) as instructed, after for Publicly traded partnerships discussed
the partnership (or your individual liabilities applying the basis and at-risk limitations on loss- in the federal instructions for Schedule K-1
assumed by the partnership). es: (Form 1065).
The above is not a complete list of items and 1. Report line 1 income (loss) from partnership 3. If you are a qualified investor reporting a qual-
factors which determine basis. See federal Publi- trade or business activities in which you ma- ified low-income housing project loss, report
cation 541 for a more complete discussion of terially participated on Form N-15, line 17. the loss on Form N-15, line 17.
how to determine the adjusted basis of your part- 2. Report line 1 income (loss) from partnership 4. If you have income on line 2, enter the income
nership interest. trade or business activities in which you did on Form N-15, line 17. However, if the box
not materially participate, as follows: in Item E is checked, report the income fol-
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lowing the rules for Publicly traded partner- eral Form 8582. However, if the box in Item F is figure your allowable section 179 expense de-
ships discussed in the federal instructions for checked, report the loss following the rules for duction from all sources. Report the amount on
Schedule K-1 (Form 1065). Publicly traded partnerships discussed in the line 12 of federal Form 4562 allocable to a pas-
Line 3. Income or loss from other rental ac- federal instructions for Schedule K-1 (Form sive activity from the partnership following the
tivities.—The amount on line 3 is a passive ac- 1065). instructions for federal Form 8582. However, if
tivity amount for all partners. Report the income Report income or gain items which are pas- the box in Item E is checked, report this amount
or loss as follows: sive activity amounts to you as instructed below. following the rules for Publicly traded partner-
1. If line 3 is a loss, report the loss following the If, in addition to this passive activity income or ships, discussed in the federal instructions for
instructions for federal Form 8582. However, gain, you have passive activity losses from any Schedule K-1 (Form 1065). If the amount is not a
if the box in Item E is checked, report the loss source, also report the passive activity income or passive activity deduction, include it on Form
following the rules for Publicly traded part- gain on federal Form 8582. N-15, line 19.
nerships discussed in the federal instruc- The instructions given below tell you where to Please note that Hawaii has not adopted
tions for Schedule K-1 (Form 1065). report line 11 items if such items are not passive changes to federal tax law relating to the in-
2. If income is reported on line 3, report the in- activity amounts. crease of the section 179 deduction for enter-
come on Form N-15, line 17. However, if the Line 11 items may include the following: prise zone businesses and “bonus” depreciation.
box in Item E is checked, report the income • Partnership gains from disposition of farm re- Line 14. Deductions related to portfolio in-
following the rules for Publicly traded part- capture property (see Schedule D-1) and come.—Amounts entered on this line are the ex-
nerships discussed in the federal instruc- other items to which section 1252 applies. penses (other than investment interest expense
and section 212 expenses from a REMIC) paid or
•
tions for Schedule K-1 (Form 1065). Recoveries of bad debts, prior taxes, and de- incurred to produce portfolio income. These de-
Line 4. Guaranteed payments.—Generally, linquency amounts (section 111). Report ductions are not taken into account in figuring
amounts on this line are not passive income and these amounts on Form N-15, line 19. your passive activity loss for the year. Do not en-
should be reported on Form N-15, line 17. Gains and losses from wagering (section ter them on federal Form 8582. Generally, in-
•
Portfolio Income (loss) 165(d)). clude these amounts in the Itemized Deduction
Income or loss referred to as “portfolio” income or • Any income, gain, or loss to the partnership Worksheet, Worksheet A-6 — Miscellaneous De-
loss in these instructions is not part of a passive under section 751(b). Report this amount on ductions, in the Form N-11 Instructions; or in the
activity subject to the rules of section 469. Portfo- Schedule D-1, line 11. Itemized Deduction Worksheet - For Nonresi-
lio income includes interest, dividend, and royalty • Specially allocated ordinary gain (loss). Re- dents, Worksheet NR-6 — Miscellaneous Deduc-
income, and gain or loss on the sale of property port this amount on Schedule D-1, line 11. tions, in the Form N-15 Instructions; or in the
Itemized Deduction Worksheet - For Part-Year
•
held for investment. Net gain (loss) from involuntary conversions Residents, Worksheet PY-6 — Miscellaneous
Line 5. Interest.—Include the amount in the In- due to casualty or theft. The partnership will Deductions, in the Form N-15 Instructions.
terest Worksheet in the Form N-15 Instructions. give you a schedule that shows the amounts
Line 6. Ordinary Dividends.—Include the to be entered on federal Form 4684, Casual- Line 15. Other deductions.—Amounts on this
amount on Form N-15, line 9. ties and Thefts, Section B, Part II, line 34, col- line are other deductions not included on lines
Line 7. Royalties.—Include the amount on Form umns (b)(i), (b)(ii), and (c). 12, 13, and 14, such as:
N-15, line 17. • Itemized deductions other than those report-
Line 8. Net short-term capital gain (loss).—In- Deductions ed on line 14.
clude the amount in the Capital Gain/Loss Work- Line 12. Charitable contributions.—The part- Note: If there was a gain (loss) from a casualty
sheet in the Form N-11 Instructions or Form N-15 nership will give you a schedule that shows which or theft to property not used in trade or business
Instructions. contributions were subject to the 50%, 30%, and or for income-producing purposes, the partner-
Line 9. Net long-term capital gain (loss).—In- 20% limitations. ship will notify you. You will have to complete
clude the amount in the Capital Gain/Loss Work- If property other than cash is contributed and your own federal Form 4684.
sheet in the Form N-11 Instructions or Form N-15 if the claimed deduction for one item or group of • Any penalty on early withdrawal of savings.
instructions. similar items of property exceeds $5,000, the • Soil and water conservation expenditures
Line 10. Net IRC section 1231 gain (loss).— partnership is required to give you a copy of fed- (section 175).
The amount on line 10 is generally a passive ac- eral Form 8283, Noncash Charitable Contribu- • Expenditures for the removal of architectural
tivity amount if it is from a rental activity or a trade tions, to attach to your tax return. Do not deduct and transportation barriers to the elderly and
or business activity in which you did not materi- the amount shown on this form. It is the partner- disabled that the partnership has elected to
ally participate. ship’s contribution. Instead, deduct the amount treat as a current expense (section 190).
shown on line 12 of your Schedule K-1 (Form
• If the amount is not from a passive activity, N-20). • Any amounts paid during the tax year for in-
report it on line 2, column (g) or (h), whichever surance that constitutes medical care for you,
is applicable, of Schedule D-1, Sales of Busi- If the partnership provides you with informa- your spouse, and your dependents.
ness Property. You do not have to complete tion that the contribution was property other than
the information called for in columns (b) cash and does not give you a federal Form 8283, • Payments made on your behalf to an IRA, Ke-
through (f). Write “From Schedule K-1 (Form see the Instructions for Form 8283 for filing re- ogh, or a Simplified Employees Pension
N-20)” across these columns. quirements. Do not file federal Form 8283 unless (SEP) plan. See the Instructions for Form
the total claimed deduction for all contributed N-15 as to payments to a Keogh or SEP plan.
• If gain from a passive activity is reported on items of property exceeds $500. If the payments to a Keogh plan were to a
line 10, report the gain on line 2, column (h), defined benefit plan, the partnership should
of Schedule D-1 and be sure to see Passive Charitable contribution deductions are not give you a statement showing the amount of
Loss Limitations in the Instructions for taken into account in figuring your passive activ- the benefit accrued for the tax year.
Schedule D-1. ity loss for the year. Do not enter them on federal
Form 8582. • Interest expense allocated to debt-financed
• If a loss from a passive activity is reported on distributions. The manner in which you report
line 10, see Passive Loss Limitations in the Include the amount on line 12 in the Itemized such interest expense depends on your use
Instructions for Schedule D-1. You will need Deduction Worksheet, Worksheet A-4 — Gifts to of the distributed debt proceeds. See Notice
to use federal Form 8582 to determine how Charity, in the Form N-11 Instructions; or in the 89-35, 1989-1 C.B. 675, for details.
much of the loss is allowed on Schedule D-1. Itemized Deduction Worksheet - For Nonresi-
However, if the box in Item E is checked, re- dents, Worksheet NR-4 — Gifts to Charity, in the • Interest paid or accrued on debt properly al-
port the loss following the rules for Publicly Form N-15 Instructions; or in the Itemized De- locable to your share of a working interest in
traded partnerships discussed in the federal duction Worksheet - For Part-Year Residents, any oil or gas property (if your liability is not
instructions for Schedule K-1 (Form 1065). Worksheet PY-4 — Gifts to Charity, in the Form limited). If you did not materially participate in
N-15 Instructions. the oil or gas activity, this interest is invest-
Line 11. Other income (loss).—Amounts on this ment interest reportable as described below;
line are other items of income, gain, or loss not Line 13. Expense deduction for recovery otherwise, it is trade or business interest.
included on lines 1 through 10. The partnership property.—Use this amount, along with the total
should give you a description and the amount of cost of section 179 property placed in service The partnership should give you a description
your share for each of these items. during the year from other sources, to complete and the amount of your share for each of these
Part I of federal Form 4562, Depreciation and items.
Report loss items which are passive activity Amortization. Use Part I of federal Form 4562 to
amounts to you following the instructions for fed-
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Credits Line 22. Credit for School Repair and Mainte- Lines 30b(1) and (2). Investment income and
The deadline to claim a credit, including nance.—Your share of the Credit for School Re- investment expenses.—Use the amounts on
pair and Maintenance is shown on line 22. Figure these lines to determine the amount to enter in
amended claims, is 12 months after the close of your credit on Form N-330 and attach Schedule Part II of Form N-158.
your taxable year. You cannot claim a credit after K-1 to your return. Caution: The amount shown on lines 30b(1)
the deadline.
All filers should complete the appropriate Line 23. Renewable Energy Technologies In- and (2) includes only investment income and ex-
forms to claim their distributive share of credits. come Tax Credit.—There should be attached to penses included on lines 5 through 7 and 14 of
this Schedule K-1 (Form N-20) a copy of Form this Schedule K-1. The partnership should attach
Also attach a copy of this K-1 to the Hawaii N-342A. If the form is not attached, contact your a schedule which shows the amount of any in-
net income tax return you file to support your partnership as you will need to attach a copy of vestment income and expenses included in any
credit. the form to the Hawaii net income tax return you other lines of this Schedule K-1. Use these
Line 16. Total cost of qualifying property for file in order to receive the credit. Figure your amounts, if any, to adjust lines 30b(1) and 30b(2)
the Capital Goods Excise Tax Credit.—Figure credit on Form N-342 and attach Schedule K-1 to to determine your total investment income and
your credit on Form N-312 and attach Schedule your return. total investment expenses from this partnership.
K-1 to your return. Line 24. Important Agricultural Land Qualified Combine these totals with investment income
Line 17. Fuel Tax Credit for Commercial Fish- Agricultural Cost Tax Credit.—Figure your and expenses from all other sources to deter-
ers.—Figure your credit on Form N-163 and at- credit on Form N-344 and attach Schedule K-1 to mine the amount to enter in Part II of Form N-158.
tach Schedule K-1 to your return. your return.
Line 18. Enterprise Zone Tax Credit.—A quali- Line 25. Tax Credit for Research Activities.— Recapture of Tax Credits
fied enterprise zone business is eligible to claim The federal credit for increasing research activi- Line 31. Recapture of Hawaii Low-Income
a credit for a percentage of taxes due to the State ties must be claimed in order to claim the state Housing Tax Credit.—Report your pro rata
attributable to the conduct of business within a credit for research activities. Figure your credit share of recapture of the Hawaii Low-Income
zone and a percentage of the amount of unem- on Form N-346 and attach Schedule K-1 to your Housing Tax Credit from section 42(j)(5) partner-
ployment insurance premium paid based on the return. ships and other sources. Complete Form N-586,
payroll of employees employed at the business Line 26. Historic Preservation Income Tax Part III. See Form N-587, Low-Income Housing
firm establishments in the zone. The applicable Credit.—Your share of the partnership’s Historic Credit Disposition Bond, for an alternative to
percentage is 80% the first year; 70% the second Preservation Income Tax Credit is shown on line credit recapture.
year; 60% the third year; 50% the fourth year; 26. Figure your credit on Form N-325 and attach Line 32. Capital Goods Excise Tax Credit
40% the fifth year; 30% the sixth year; and 20% Schedule K-1 to your return. Properties.— You should receive a completed
the seventh year. This credit is not refundable copy of Form N-312, Part II from the partnership.
and any unused credit may NOT be carried for- Line 27. Renewable Fuels Production Tax Use this information to determine the amount of
ward. Credit for Years After 12/31/2021.— Your share
of the partnership’s Renewable Fuels Production credit recapture on Form N-312.
Your partnership should attach a statement Tax Credit is shown on line 27. Figure your credit Line 33. Recapture of the Tax Credit for Flood
(Form N-756A) to your Schedule K-1(Form N-20) on Form N-360 and attach Schedule K-1 to your Victims.—Report your share of the recapture of
showing your share of the partnership’s amounts return. the Tax Credit for Flood Victims on Form N-338.
needed to claim the credit. Figure your credit on Line 34. Recapture of the Important Agricul-
Form N-756 and attach Schedule K-1 to your re- Line 28. Pass-Through Entity Tax Credit.—
turn. Your share of the partnership’s Pass-Through tural Land Qualified Agricultural Cost Tax
Entity Tax Credit is shown on line 28. Figure your Credit.—Report your share of the recapture of
Line 19. Low-Income Housing Tax Credit.— credit on Form N-362 and attach Schedule K-1 to the Important Agricultural Land Qualified Agricul-
Hawaii’s low-income housing tax credit is equal your return. tural Cost Tax Credit on Form N-344.
to 50% of the tax credit allocated by the Housing Line 35. Recapture of the Capital Infrastruc-
and Community Development Corporation of Ha- Line 29. Credit for Income Tax Withheld on
waii for qualified buildings located in the State of Form N-288A.—Enter your share of taxes with- ture Tax Credit.—Report your share of the re-
Hawaii. held on the disposition of Hawaii real property capture of the Capital Infrastructure Tax Credit on
interests, net of refunds, on Schedule CR, line 9a Form N-348.
Your share of the partnership’s tax credit is or on Form N-20, Schedule K, line 29 if the part- Line 36. Recapture of the Historic Preserva-
shown on this line. Figure your credit on Form ner is a partnership and attach Schedule K-1 to tion Income Tax Credit.—Report your share of
N-586 and attach Schedule K-1 to your return. your return. the recapture of the Historic Preservation Income
Line 20. Credit for Employment of Vocational Tax Credit on Form N-325.
Rehabilitation Referrals.—The amount of the Investment Interest
tax credit for the taxable year shall be equal to If the partnership paid or accrued interest on Other
20% of the qualified first-year wages for that debts it incurred to buy or hold investment prop- Line 37.—Amounts included on the statement
year. The amount of the qualified first-year wages erty, the amount of interest you can deduct may for this line are other amounts not included else-
which may be taken into account with respect to be limited. where such as:
any individual shall not exceed $6,000 per year.
For more information and the special provi- a. Taxes paid on undistributed capital gains by
Your share of the partnership’s tax credit is sions that apply to investment interest expense, a regulated investment company. Enter your
shown on this line. Figure your credit on Form see Form N-158, Investment Interest Expense share of these taxes on Schedule CR, line 9b
N-884 and attach Schedule K-1 to your return. Deduction, and federal Publication 550, Invest- and add the words “Form N-20.”
Line 21. Qualified production costs for the ment Income and Expenses. b. Any other information you may need to file
Motion Picture, Digital Media, and Film Pro- Line 30a. Interest expense on investment your return that is not shown elsewhere on
duction Income Tax Credit.—Your share of the debts.—Enter this amount on line 1 of Form Schedule K-1.
qualified production costs is shown on line 21. N-158 along with your investment interest ex- The partnership should give you a description
Figure your credit on Form N-340 and attach pense from other sources. Form N-158 will help and the amount of your share for each of these
Schedule K-1 to your return. you determine how much of your total investment items.
interest is deductible.

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