Professional Documents
Culture Documents
personal property acquired for resale if the the partnership. See Revenue Ruling market value on the
first day of the
taxpayer's annual average gross receipts 85-32, 1985-1 C.B.186. lease exceeded:
The lease term began:
are $10 million or less. It does not apply to e. Research Expenses. —Deductions
After 12/31/86 . . . . . . . . . $12,800
timber or to most property produced under under section 174 or any other provision
After 4/2/85 but before 1/1/87 . . . . . $23,000
a long-term contract. Special rules apply for research expenses or basic research
payments must be reduced by 50% of the After 6/18/84 but before 4/3/85 . . . . $34,500
to certain partnerships engaged in farming
(see the note at the end of line 5 partnership's research credit determined Note: If the partnership leased a vehicle
instructions). The rules do not apply to for the year, unless an election is made during 1986, and the tax year beginning
property which is produced for use by the to have the research credit not apply. A in 1990 is the first tax year the vehicle
taxpayer if substantial construction similar rule applies where the partnership was used 50% or less for business, you
occurred before March 1, 1986. capitalizes, rather than expenses, will need to figure an additional inclusion
qualified research expenses. amount. You must figure this additional
In the case of inventory, some of the amount even if the partnership had no
indirect expenses that must be Line 9a inclusion amount using the table shown
capitalized are: administration expenses; above.
taxes; depreciation; insurance; Salaries and Wages
compensation paid to officers attributable Enter on line 9a the amount of salaries See Pub. 917, Business Use of a Car
to services; rework labor; and and wages paid or incurred for the tax for instructions on how to figure the
contributions to pension, stock bonus, year. Do not include salaries and wages inclusion amount and additional
and certain profit-sharing, annuity, or reported elsewhere on the return, such inclusion amount.
deferred compensation plans. as amounts included in cost of goods
The costs required to be capitalized sold, elective contributions to a section Line 12
under section 263A are not deductible 401(k) cash or deferred arrangement, or
amounts contributed under a salary Interest
until the property to which the costs relate
is sold, used, or otherwise disposed of by reduction SEP agreement. Include only interest incurred in the trade
the partnership. or business activities of the partnership
Line 9b that is not claimed elsewhere on the
Research and experimental costs return.
under section 174, intangible drilling costs Jobs Credit
for oil and gas and geothermal property, Do not include interest expense on
Enter the total amount of the jobs credit debt required to be allocated to the
and mining exploration and development computed by the partnership. Subtract
costs are reported separately to partners production of qualified property. Interest
this from the salaries and wages shown that is allocable to certain property
for purposes of determinations under on line 9a. See the Instructions for Form
section 59(e). Temporary Regulations produced by a partnership for its own use
5884, Jobs Credit, to figure the amount of or for sale must be capitalized. In addition,
section 1.263A-1T specifies other indirect credit to enter on line 9b.
costs that may be currently deducted and a partnership must also capitalize any
those that must be capitalized with interest on debt that is allocable to an
Line 10 asset used to produce the above property.
respect to production or resale activities.
For more information, see Temporary Guaranteed Payments to Partners A partner may have to capitalize interest
Regulations section 1.263A-1T; Notice that the partner incurs during the tax year
Deduct payments or credits to a partner with respect to the production
88-86, 1988-2 C.B. 401; and Notice for services or for the use of capital if the
89-67, 1989-1 C.B.723. expenditures of the partnership. Similarly,
payments or credits are determined interest incurred by a partnership may
b. Transactions Between Related without regard to partnership income and have to be capitalized by a partner with
Taxpayers. —GeneraIly, an accrual basis are allocable to a trade or business respect to the partner's own production
partnership may deduct business expenses activity. Do not include any payments and expenditures. The information required by
and interest owed to a related party credits that should be capitalized. For the partner to properly capitalize interest
Page 12
for this purpose must be provided by the Line 13 Form 4562 or Pub. 534, Depreciation, to
partnership in an attachment to Schedule figure the amount of depreciation to enter
K-1. See section 263A(f) and Notice Taxes on this line. For depreciation, you must
88-99, 1988-2 C.B. 422. Enter taxes paid or incurred in the trade complete and attach Form 4562 only if the
Do not include interest expense on or business activities of the partnership, if partnership placed property in service
debt used to purchase rental property or not reflected in cost of goods sold. during 1990 or claims depreciation on any
debt used in a rental activity. Interest Federal import duties and Federal excise car or other listed property.
allocable to a rental real estate activity is and stamp taxes are deductible only if Do not include any section 179
reported on Form 8825 and is used in paid or incurred in carrying on the trade expense deduction on this line. This
arriving at net income (loss) from rental or business of the partnership. amount is not deducted by the
real estate activities on line 2 of Do not deduct taxes, including state partnership. Instead, it is passed through
Schedules K and K-1. Interest allocable to and local sales tax paid or accrued in to the partners on line 9 of Schedule K-1.
a rental activity other than a rental real connection with the acquisition or
estate activity is included on line 3b of disposition of business property. These Line 17
Schedule K and is used in arriving at net taxes must be added to the cost of the
income (loss) from a rental activity (other Depletion
property, or, in the case of a disposition,
than a rental real estate activity). This net subtracted from the amount realized. If the partnership claims a deduction for
amount is reported on line 3c of Schedule See section 164. timber depletion, complete and attach
K and line 3 of Schedule K-1. Do not deduct taxes assessed against Form T, Forest Industries Schedules.
Do not include interest expense on local benefits to the extent that they Caution: Do not report depletion
debt used to buy property held for increase the value of the property deductions for oil and gas properties on
investment. Do not include interest assessed (such as for paving, etc.), this line. Each partner figures depletion on
expense that is clearly and directly Federal income taxes, estate, inheritance, oil and gas properties under section
allocable to interest, dividend, royalty, or legacy, succession, and gift taxes, or 613A(c)(7)(D). See the instructions for
annuity income not derived in the ordinary taxes reported elsewhere on the return. Schedule K-1, line 21, item c, for the
course of a trade or business. Interest Do not deduct section 901 foreign information on oil and gas depletion that
paid or incurred on debt used to purchase taxes. Report these taxes separately must be supplied to the partners by the
or carry investment property is reported on Schedules K and K-1, line 17e. partnership.
on line 12a of Schedules K and K-1. See
the instructions for line 12a of Schedules Do not report on line 13 taxes allocable Line 18a
K and K-1 and Form 4952 for more to portfolio income or to a rental activity.
information on investment property. Taxes allocable to a rental real estate Retirement Plans, etc.
activity are reported on Form 8825. Taxes
Do not include interest on debt allocable to a rental activity other than a Do not deduct payments for partners to
proceeds allocated to distributions rental real estate activity are reported on retirement or deferred compensation plans
made to partners during the tax year. line 3b of Schedule K. Taxes allocable to including IRAs, Keoghs, and Simplified
Instead, report such interest on line 11 portfolio income are reported on line 10 of Employee Pension (SEP) plans on this
of Schedules K and K-1. To determine Schedules K and K-1. line. These amounts are reported on
the amount to allocate to distributions to Schedule K-1, line 11, and are deducted by
See section 263A(a) for rules on the partners on their own returns.
partners, see Notice 89-35, 1989-1 C.B. capitalization of allocable costs (including
675. taxes) for any property. Enter the deductible contributions not
Temporary Regulations section claimed elsewhere on the return made
1.163-8T gives rules for allocating interest Line 14 by the partnership for its common-law
expense among activities so that the employees under a qualified pension,
passive activity limitation (section 469), Bad Debts profit-sharing, annuity, or SEP plan, and
investment interest limitation, and the under any other deferred compensation
personal interest limitation can be Enter the total debts that became plan.
properly computed. Generally, interest worthless in whole or in part during the
year, but only to the extent such debts If the partnership contributes to an
expense is allocated in the same manner Individual Retirement Arrangement (IRA)
that debt is allocated. Debt is allocated by relate to a trade or business activity.
Caution: Cash method taxpayers cannot for employees, include the contribution in
tracing disbursements of the debt salaries and wages on page 1, line 9a, or
proceeds to specific expenditures, as take a bad debt deduction unless the
amount was previously included in income. Schedule A, line 3, and not on line 18a.
provided in the regulations. These Employers who maintain a pension,
regulations give rules for tracing debt profit-sharing, or other funded deferred
proceeds to expenditures. Line 15 compensation plan (other than a SEP),
See Temporary Regulations section Repairs whether or not the plan is qualified under
1.163-8T for special rules on the the Internal Revenue Code and whether
allocation of interest expense, Enter the cost of incidental repairs that do or not a deduction is claimed for the
transitional rules, and other details. not add to the value of the property or current year, generally are required to file
Note: Interest paid by a partnership to a appreciably prolong its life, but only to the one of the following forms:
partner for the use of capital should be extent that such repairs relate to a trade
entered on line 10. Generally, prepaid or business activity and are not claimed • Form 5500, Annual Return/Report of
elsewhere on the return. New buildings, Employee Benefit Plan, for each plan
interest can only be deducted over the with 100 or more participants.
period to which the prepayment applies machinery, or permanent improvements
(section 461(g)). Interest incurred during that increase the value of the property are • Form 5500-C/R, Return/Report of
construction or improvement of real not deductible. They are chargeable to Employee Benefit Plan, for each plan
property, personal property that has a capital accounts and may be depreciated with fewer than 100 participants.
class life of 20 years or more, or other or amortized. • Form 5500EZ, Annual Return of
tangible property requiring more than 2 One-Participant (Owners and Their
years (1 year in the case of property Line 16 Spouses) Pension Benefit Plan, for
costing more than $1 million) to produce Depreciation each plan which covers only partners
or construct generally must be or partners and their spouses.
capitalized. See section 263A for more On line 16a enter only the depreciation There are penalties for not filing
information. The limitations on deductions claimed on assets used in a trade or these forms on time.
for unpaid interest are in Regulations business activity. Enter on line 16b the See Pub. 1048, Filing Requirements
section 1.267(b)-1(b). depreciation reported elsewhere on the for Employee Benefit Plans, for more
return (e.g., on Schedule A) that is information.
attributable to assets used in trade or
business activities. See the Instructions for
Page 13
Line 18b Check the methods used for valuing
inventories on line 8a. Under “lower of
Employee Benefit Programs cost or market,” market generally refers
Schedule A to normal market conditions when there is
Enter the partnership's contributions to
employee benefit programs not claimed a current bid price prevailing at the date
Cost of Goods Sold the inventory is valued. When no regular
elsewhere on the return (for example,
insurance, health, and welfare programs) open market exists or when quotations
that are not part of a pension, profit-sharing, are nominal because of inactive market
Section 263A Uniform Capitalization conditions, use fair market prices from the
etc., plan included on line 18a. Rules.—The uniform capitalization rules most reliable sales or purchase
Do not include any deduction allowable of section 263A are discussed under transactions that occurred near the date
under the provisions of section 162(l) with Limitations on Deductions on page the inventory is valued. For additional
respect to amounts paid during the tax 12. See those instructions before requirements, see Regulations section
year for insurance which constitutes completing Schedule A. 1.471-4 and Notice 88-86, 1988-2
medical care for a partner, a partner's C.B. 401 (Section IV(N)).
spouse, or a partner's dependents. Line 2
Instead, report such amounts on Inventory may be valued below cost
Schedules K and K-1, line 11. Purchases when the merchandise is unsalable at
Show withdrawals for personal use on normal prices or unusable in the normal
Line 19 Schedules M and K-1 (item K) as way because the goods are “subnormal”
distributions to partners, if Schedule M (that is, because of damage,
Other Deductions and Item K on Schedules K-1 are imperfections, shop wear, etc.) within the
Enter any other allowable deductions required. meaning of Regulations section
related to a trade or business activity for 1.471-2(c). Such goods may be valued at
Line 4a.—An entry on this line is required a current bona fide selling price minus the
which there is no separate line on page only for partnerships that have elected a
1 of Form 1065. direct cost of disposition (but not less
simplified method. In the case of than scrap value) if the taxpayer can
A partnership is not allowed the partnerships that have elected the establish such a price. See Regulations
deduction for net operating losses. simplified production method, additional section 1.471-2(c) for additional
Do not include items requiring section 263A costs are generally those requirements.
separate computation that must be costs, other than interest, that were not
capitalized or included in inventory costs On line 8a(iv), check the box provided
reported on Schedule K-1. if the partnership used a method of
under the taxpayer's method of
Do not include qualified expenditures accounting immediately prior to the inventory valuation other than those
to which an election under section 59(e) effective date in Temporary Regulations described on line 8a(i), (ii), or (iii), and
may apply. section 1.263A-1T but that are now attach a statement describing the method
Include on line 19 the deduction taken required to be capitalized under section used.
for amortization. You must complete and 263A. Interest is to be accounted for If this is the first year the “Last-in First-
attach Form 4562 if the partnership is separately. In the case of partnerships out” (LIFO) inventory method was either
claiming amortization of costs that that have elected a simplified resale adopted or extended to inventory goods
begins during its 1990 tax year. The method, additional section 263A costs are not previously valued under the LIFO
instructions for Form 4562 provide code generally those costs incurred with method, attach Form 970, Application To
section references for specific respect to the following categories: off-site Use LIFO Inventory Method, or a
amortizable property. See Pub. 535 for storage or warehousing; purchasing; statement with the information required
more information on amortization. handling, processing, assembly, and by Form 970. Also check the LIFO box
Generally, the partnership can deduct repacking; and general and administrative on line 8b.
only 80% of the amount otherwise costs (mixed service costs). Enter on line If you have changed or extended your
allowable for meals and entertainment 4a the balance of section 263A costs paid inventory method to LIFO and have had
expenses paid or incurred in its trade or or incurred during the tax year not to “write up” your opening inventory to
business. In addition, meals must not be included on lines 2 and 3. See Temporary cost in the year of election, report the
lavish or extravagant; a bona fide business Regulations section 1.263A-1T for more effect of this write up as income (line 7,
discussion must occur during, immediately information. page 1, Form 1065) proportionately over
before, or immediately after the meal; and Line 4b.—Enter on line 4b any costs paid a 3-year period that begins in the tax year
a partner or employee of the partnership or incurred during the tax year and not you made this election.
must be present at the meal. See section entered on lines 2 through 4a.
274(k)(2) for exceptions.
Line 6.—See Temporary Regulations
Additional limitations apply to section 1.263A-1T for more information
deductions for gifts, skybox rentals, on computing the amount of additional Schedule L
luxury water travel, convention expenses, section 263A costs to be capitalized
and entertainment tickets. and added to ending inventory. Balance Sheets
Generally, a partnership can deduct all
other ordinary and necessary travel and Lines 8a and 8b
entertainment expenses paid or incurred Note: Domestic partnerships with 10 or
in its trade or business. However, it Inventory Valuation Methods fewer partners may not have to complete
cannot deduct an expense paid or Schedule L. See the instructions for
Inventories can be valued at; (1) cost; (2) Question N for the specific requirements
incurred for a facility (such as a yacht or cost or market value (whichever is lower);
hunting lodge) that is used for an activity to qualify for this exception.
or (3) any other method approved by the
that is usually considered entertainment, Commissioner that conforms with the The balance sheets should agree with
amusement, or recreation. (Note: The provisions of the applicable regulations the partnership's books and records.
partnership may be able to deduct the cited below. Attach a statement explaining any
expense if the amount is treated as Taxpayers using erroneous valuation differences. Balance sheet amounts
compensation and reported on Form W-2 methods must request permission to shown on Schedule L should not be
for an employee or on Form 1099-MISC change to a method permitted for Federal adjusted to reflect any revaluation under
for an independent contractor.) tax purposes. For more information, see Regulations section 1.704-1(b)(2)(iv)(f).
See section 274; Pub. 463, Travel, Regulations section 1.446-1(e)(3); Partnerships reporting to the Interstate
Entertainment, and Gift Expenses; Revenue Procedure 84-74, 1984-2 C.B. Commerce Commission or to any national,
and Pub. 917 for more details. 736; Notice 88-78, 1988-2 C.B. 394; and state, municipal, or other public officer
Notice 89-67. may send copies of their balance sheets
prescribed by the Commission or state or
municipal authorities, as of the beginning
Page 14
and end of the tax year, instead of but not charged against book income General Instructions
completing Schedule L. However, this year.
statements filed under this procedure Include in column (e) losses and Although the partnership is not subject to
must contain sufficient information to deductions reported on the partnership's income tax, the partners are liable for tax
enable the IRS to reconstruct a balance books but not included in column (c). Also on their shares of the partnership income,
sheet similar to that contained on Form use column (e) to make reductions to the whether or not distributed, and must
1065 without contacting the partnership capital account for differences between include their shares on their tax returns.
during processing. tax accounting and book accounting. Schedules K and K-1 have the same
Line 5. Tax-exempt securities.—Include Examples of amounts to be included in line numbers for lines 1 through 18b.
on this line: column (e) include investment interest
expense, deductions related to portfolio Substitute Forms
(1) State and local government
obligations, the interest on which is income, expenses connected with the You do not need IRS approval to use a
excludible from gross income production of tax-exempt income, substitute Schedule K-1 if it is an exact
under section 103(a), and charitable contributions, and income facsimile of the IRS schedule, or if it
(2) Stock in a mutual fund or other included in column (c) but not recorded in contains only those lines the taxpayer is
regulated investment company that the partnership's books this year. required to use, and the lines have the
distributed exempt-interest dividends Include in column (f) withdrawals same numbers and titles and are in the
during the tax year of the partnership. from inventory for personal use. same order as on the comparable IRS
Note: If Schedule M and Item K of Schedule K-1. In either case, your
Line 18. All nonrecourse loans.— substitute schedule must include the OMB
Nonrecourse loans are those liabilities of Schedule K-1 are not required, see the
instructions for Schedule K-1, line 21, number and the Partner's Instructions for
the partnership for which none of the Schedule K-1 (Form 1065) or other
partners have any personal liability. item f.
prepared specific instructions.
See Revenue Ruling 84-5, 1984-1 C.B. Designation of Tax Matters Partner
32, for information on partnerships that Other substitute Schedules K-1 require
purchase timeshare units in a vacation (TMP) approval. You may apply for approval of
home with a nonrecourse obligation If the partnership is subject to the rules for a substitute form by writing to: Internal
before deducting any interest that accrues consolidated audit proceedings in sections Revenue Service, Attention: Substitute
on the obligation. 6221 through 6233, the partnership may Forms Program Coordinator, R:R:R,
designate a partner as the TMP for the tax 1111 Constitution Avenue, NW,
See Revenue Ruling 84-118, Washington, DC 20224.
1984-2 C.B. 120, for information on a year for which the return is filed by
limited partner's basis when there is a completing the Designation of Tax Each taxpayer's information must be
partially nonrecourse note. Matters Partner section on page 2 of on a separate sheet of paper. Therefore,
Form 1065. See the instructions for all continuously printed substitutes must
A limited partner's basis is not be separated before they are filed with
increased by a share of the limited Question M, consolidated audit
procedures, to determine if the the Service.
partnership's liability when the
general partner has personally partnership is subject to these rules. The You may be subject to a penalty if you
guaranteed a nonrecourse loan to the designated TMP must be a general file Schedules K-1 that do not conform to
partnership. partner and, in most cases, must also be the specifications of Revenue Procedure
a U.S. person. For details, see Temporary 90-8, 1990-1 C.B. 434.
Regulations section 301.6231(a)(7)-1T.
How Income Is Shared Among Partners
Schedule M of Form 1065 and Income (loss) is allocated to a partner only
Item K of Schedule K-1 for the part of the year in which that
Schedules K and K-1 person is a member of the partnership.
Reconciliation of Partners' The partnership will either allocate on a
Capital Accounts Partners' Shares of Income,
daily basis or divide the partnership year
Credits, Deductions, Etc. into segments and allocate income, loss,
or special items in each segment among
Note: Domestic partnerships with 10 or the persons who were partners during that
fewer partners may not have to complete Purpose of Schedules segment. Partnerships that report their
Schedule M or Item K of Schedule K-1. Schedule K (page 3 of Form 1065) is a income on the cash basis must allocate
See the instructions for Question N for the summary schedule of all the partners' interest expense, taxes, and any payment
specific requirements to qualify for this shares of the partnership's income, for services or for the use of property on a
exception. credits, deductions, etc. Schedule K-1 daily basis if there is any change in any
(Form 1065) shows each partner's partner's interest during the year. (See
Show what caused the changes in section 706 for more information and for
the partners' capital accounts during separate share. One copy of each K-1
must be attached to the Form 1065 filed information on the tax consequences of
the tax year. the termination of a partner's interest.)
The beginning and ending capital with the Internal Revenue Service. One
copy is kept with a copy of the Allocate shares of income, gain, loss,
accounts should agree with the deduction or credit among the partners
partnership's books and records and partnership return as a part
partnership's records. One copy must be according to the partnership agreement
the balance sheet amounts. Attach a for sharing income or loss generally. If
statement explaining any differences. furnished to each partner. If a
partnership interest is held by a nominee the partners agree, specific items may be
Also, the amounts on Schedule M on behalf of another person, the allocated in a ratio different from the ratio
should equal the total of the amounts partnership may be required to furnish for sharing income or loss generally. For
reported in Item K of all the partners' Schedule K-1 to the nominee, See instance, if the net income exclusive of
Schedules K-1. Temporary Regulations section specially allocated items is divided evenly
Include in column (d) income 1.6031(b)-1T and 1.6031(c)-1T for more among three partners but some special
reported on the partnership's books but information. items are allocated 50% to one, 30% to
not included in column (c). Also use Be sure to give each partner a copy of another, and 20% to the third partner,
column (d) to make additions to the either the Partner's Instructions for report the specially allocated items on the
capital account for differences between Schedule K-1 (Form 1065) or specific appropriate line of the applicable
tax accounting and book accounting. instructions for each item reported on the partner's Schedule K-1 and the total on
Examples of amounts to be included in partner's Schedule K-1 (Form 1065). the appropriate line of Schedule K,
column (d) include tax-exempt interest, Note: Instructions that apply only to line instead of on the numbered lines on page
other tax-exempt income, and allowable items reported on Schedule K-1 may be 1 of Form 1065 or Schedules A or D.
deductions used by the partnership to prepared and given to each partner in lieu If the partnership agreement does not
figure the amount shown in column (c) of the instructions printed by IRS. provide for the partner's share of income,
Page 15
gain, loss, deduction, or credit, or if the other partners enter the partner's is secured by real property used in the
allocation under the agreement does not employer identification number. activity and that is loaned or guaranteed
have substantial economic effect, the (However, if a partner is an individual by a Federal, state, or local government or
partner's share is determined according to retirement arrangement (IRA), enter the that is borrowed from a “qualified” person.
the partner's interest in the partnership. identifying number of the custodian of the Qualified persons include any person
Regulations under section 704(b) provide IRA. Do not enter the social security actively and regularly engaged in the
rules relating to the substantial economic number of the person for whom the IRA is business of lending money, such as a
effect test and to the determination of a maintained.) bank or savings and loan association.
partner's interest in the partnership. Note: Space has been provided on line Qualified persons generally do not include
Regulations section 1.704- 21 of Schedule K-1 for you to provide related parties (unless the nonrecourse
1(b)(2)(ii)(b)(1) provides that an allocation information to the partners. This space financing is commercially reasonable and
of income, gain, loss, or deduction to a may be used in lieu of attachments. on substantially the same terms as loans
partner will generally have economic involving unrelated persons), the seller of
effect only if, throughout the full term of Question A the property, or a person who receives a
the partnership, the partnership fee for the partnership's investment in the
Question A must be answered for all real property. See section 465 and Pub.
agreement provides for the determination partners. If a partner holds interests as
and maintenance of the partners' capital 925 for more information on qualified
both a general and limited partner, attach nonrecourse financing.
accounts in accordance with the rules a schedule for each activity which shows
under Regulations section the amounts allocable to the partner's The partner as well as the partnership
1.704-1(b)(2)(iv). See Regulations interest as a limited partner. must meet the qualified nonrecourse
section 1.704-1(b)(2)(iv)(r) and Notice rules. Therefore, the partnership must
88-87, 1988-2 C.B. 411, for limited safe Item B enter on an attached statement any other
harbor rules for partnerships operating information the partner needs to
before May 1, 1986, that did not properly Partner's Share of Liabilities determine if the qualified nonrecourse
maintain their capital accounts. Enter each partner's share of rules are also met at the partner level.
Note: If a partner's interest changed nonrecourse liabilities, partnership-level
during the year, see section 706(d) qualified nonrecourse financing, and Question C
before determining each partner's other liabilities. Nonrecourse liabilities What Type of Entity Is This Partner?
distributive share of any item of income, are those liabilities of the partnership for
gain, loss, deduction, etc. which none of the partners has any State on this line whether the partner is an
personal liability. Do not include individual, a corporation, a fiduciary, a
partnership-level qualified nonrecourse partnership, an exempt organization, or a
Specific Instructions financing (defined below) on the line for nominee (custodian). If the partner is a
nonrecourse liabilities. Nonrecourse nominee, use one of the following codes
Schedule K Only to indicate the type of entity the nominee
liabilities include all nonrecourse debt on
real property placed in service before represents: I—Individual; C—Corporation;
Schedule K must be completed by all F—Fiduciary; P—Partnership; E—Exempt
partnerships. In order for partners to 1987.
Organization; or IRA—Individual
comply with the requirements of section If the partner terminated his or her Retirement Arrangement.
469, trade or business activity income interest in the partnership during the year,
(loss), rental activity income (loss), and enter the share that existed immediately Question D
portfolio income must be considered before the total disposition. In all other
separately by the partner. Rental activity cases, enter it as of the end of the year. Domestic/Foreign Partner
income (loss) and portfolio income are If the partnership is engaged in two or
not reported on page 1 of Form 1065. Check the appropriate box to indicate
more different types of at-risk activities, or whether the partner is a domestic or a
These amounts are not combined with a combination of at-risk activities and any
trade or business activity income (loss). foreign partner.
other activity, attach a statement showing
Schedule K is used to report the totals of the partner's share of nonrecourse
these (and other) amounts. Item E
liabilities, partnership-level qualified
nonrecourse financing, and other liabilities Partner's Profit, Loss, and Capital
Schedule K-1 Only for each activity. See sections 465(c)(2) Sharing Percentages
and (3) and Pub. 925 to determine if the Enter in Item E, column (ii), the
Prepare and give a Schedule K-1 to each partnership is engaged in more than one
person who was a partner in the appropriate percentages as of the end of
at-risk activity. the year. However, if a partner's interest
partnership at any time during the year.
Schedule K-1 must be provided to each If a partnership is engaged in an terminated during the year, enter in
partner on or before the day on which activity subject to the limitations of section column (i) the percentages that existed
the partnership return is required to be 465(c)(1) (i.e., films or video tapes, immediately before the termination. When
filed. leasing section 1245 property, farming, or the profit or loss sharing percentage has
oil and gas property), give each partner changed during the year, show the
Note: Generally, under section 6031(c) his or her share of the total pre-1976
any person who holds an interest in a percentage before the change in column
losses from that activity for which there (i) and the end of year percentage in
partnership as a nominee for another existed a corresponding amount of
person is required to furnish to the column (ii). If there are multiple changes
nonrecourse liability at the end of each in the profit and loss sharing percentage
partnership the name, address, etc., of year in which the losses occurred. See
the other person (beneficial holder of the during the year, attach a statement giving
Form 6198, At-Risk Limitations, and the date and percentage before each
interest). related instructions for more information.
If a husband and wife each had an change. “Ownership of capital” means the
interest in the partnership, prepare a The at-risk rules also apply to real portion of the capital that the partner
separate Schedule K-1 for each of them. property, except for real property (other would receive if the partnership was
than mineral property) placed in service liquidated at the end of the year by the
If a husband and wife held an interest distribution of undivided interests in
together, prepare one Schedule K-1 if by the taxpayer before 1987. However,
there is an exception for “qualified partnership assets and liabilities.
the two of them are considered to be
one partner. nonrecourse financing” secured by real
property used in the activity of holding real Items G(1) and (2)
On each Schedule K-1, enter the property. The partner is considered at-risk
names, addresses, and identifying for qualified nonrecourse amounts. Tax Shelter Information
numbers of the partner and
partnership and the partner's Qualified nonrecourse financing If the partnership is a registration-required
distributive share of each item. generally includes financing for which no tax shelter, it must enter its tax shelter
For an individual partner enter the one is personally liable for repayment that registration number in G(1) and identify
partner's social security number. For all the type of shelter in G(2). If the
Page 16
partnership invested in a attributable to the activity and state that Reform Act of 1986. See Act section 502
registration-required shelter, the the activity was commenced after October for definitions and other information on
partnership must also attach a copy of its 22, 1986. Losses and credits from such qualified low-income housing projects.
Form 8271 to Schedule K-1. See Form activities do not qualify for phase-in relief.
8271 for a list of the types of tax shelters Line 3
and for more information. Item K
Net Income (Loss) From Other Rental
Reconciliation of Partner's Capital Activities
Questions H(1) and (2) Account On Schedule K, line 3a, enter gross
These questions must be answered for all See the instructions for Question N income from rental activities other than
partners. The information is needed by and Schedule M of Form 1065. rental real estate activities. See page 6 of
partners to apply the phase-in relief these instructions, section 469, and Pub.
provisions of section 469. Interests in Schedules K and K-1 (unless 925 for the definition of rental activities.
passive activities acquired by the partner Include on line 3a, the gain (loss) from
on or before October 22, 1986, are eligible otherwise noted) line 18 of Form 4797 that is attributable to
for phase-in relief of the passive loss rules. the sale, exchange, or involuntary
Interests acquired after October 22, 1986, Special Allocations conversion of an asset used in a rental
do not qualify for phase-in relief (unless An item is specially allocated if it is activity other than a rental real estate
there was a contractual obligation on allocated to a partner in a ratio that is activity.
October 22, 1986, to purchase the different from the ratio for sharing income On line 3b of Schedule K enter the
interest). or loss generally. deductible expenses of the activity.
Therefore, if a partner first acquires an Specially allocated items should be Attach a schedule of these expenses to
interest in the partnership after October reported on the applicable lines of the Form 1065,
22, 1986, or a partner's ownership partner's Schedule K-1. Report the total Enter the net income (loss) on line 3c
interest is increased after October 22, amount on the applicable line of of Schedule K. Enter each partner's
1986, the portion of his or her interest Schedule K. For example, specially share on line 3 of Schedule K-1.
attributable to that new interest or to the allocated long-term capital gain is entered
increase in the interest does not qualify If the partnership has more than one
on line 4e of the partner's Schedule K-1, rental activity reported on line 3, identify
for phase-in relief. For example, if after and the total is entered on line 4e of
that date a partner increases his or her on an attachment to Schedule K-1 the
Schedule K, along with any net long-term amount from each activity.
ownership interest from 25% to 50%, only capital gain (or loss) from line 9 of
the losses and credits attributable to the Schedule D (Form 1065).
25% interest held prior to October 23, Lines 4a through 4f
1986, will qualify for the phase-in relief.
Income (Loss) Portfolio Income (Loss)
Generally, to qualify for phase-in relief,
the interest held by the partner must be in Line 1 Enter portfolio income (loss) on lines 4a
an activity which had commenced by through 4f.
October 22, 1986, If the partnership Ordinary income (Loss) From Trade or
commences a new activity after that date, See page 7 of these instructions for a
Business Activities definition of portfolio income, Do not
the new activity does not qualify for
phase-in relief (unless on or before August Enter the amount from line 21, page 1. reduce portfolio income by deductions
16, 1986, the partnership entered into a Enter the income or loss without allocable to it. Portfolio deductions (other
binding contract to acquire assets used to reference to the basis of the partners' than interest expense) are reported on
conduct the activity, or construction of the interests in the partnership, the partners' line 10 of Schedules K and K-1. Interest
property used in the activity began). at-risk limitations, or the passive activity expense allocable to portfolio income is
limitations. These limitations, if applicable, generally investment interest expense and
Question H(1).—Answer “Yes” to are determined at the partner level. must be reported on line 12a of
Question H(1) if a partner's percentage of If the partnership has more than one Schedules K and K-1.
ownership interest in the partnership trade or business activity, identify on an Lines 4a and 4b.—Enter only taxable
changed after October 22, 1986. attachment to Schedule K-1 the amount interest and dividends on these lines.
Phase-in relief applies only with respect from each separate activity. See Passive Taxable interest is interest from all
to the ownership interest held by the Activity Reporting Requirements sources except interest exempt from tax,
partner on October 22, 1986, and at all beginning on page 8. and interest on tax-free covenant bonds.
times thereafter. For example, if a partner
reduced his or her ownership interest Line 1 should not include rental activity Caution: Be sure to give each payer of
after October 22, 1986, from 20% to income (loss) or portfolio income (loss). interest and dividend income the
10%, and subsequently purchased partnership's correct identification
additional interests restoring his or her Line 2 number. Otherwise, the payer may
share to 20%, then Question H(1) should withhold 20% of the interest or dividend
Net Income (Loss) From Rental Real income. The partnership may also be
be answered “Yes,” and only the 10% Estate Activities
interest held throughout qualifies for subject to penalties.
phase-in relief. Enter the net income or loss from rental Lines 4d and 4e.—Enter on line 4d of
If Question H(1) is answered “Yes,” real estate activities of the partnership Schedule K the amount on line 4 of
attach a statement to Schedule K-1, for from Form 8825, Rental Real Estate Schedule D (Form 1065) plus any short-
Question H(1), that identifies for each Income and Expenses of a Partnership or term capital gain (loss) that is specially
activity started or acquired by the an S Corporation. If the partnership has allocated to partners. Report each
partnership before October 23, 1986, the more than one rental real estate activity, partner's share on line 4d of Schedule
amount of income, loss, deduction, and identify on an attachment to Schedule K-1 K-1.
credit from each activity that is the amount attributable to each activity. The amount reported for line 4e of
attributable to the partner's increase in If a loss from a qualified low-income Schedule K is the amount on line 9 of
ownership interest after October 22, housing project is reported on line 2, Schedule D (Form 1065) plus any
1986. identify this loss on a statement attached long-term capital gain (loss) that is
Question H(2).—Answer “Yes” to to the Schedule K-1 of each partner who specially allocated to partners. Report
Question H(2) if the partnership started or is a qualified investor in the project. Any each partner's share on line 4e of
acquired a new activity after October 22, loss sustained by a qualified investor in a Schedule K-1.
1986 (unless the binding contract or qualified low-income housing project for Caution: If any short-term or long-term
construction exceptions of section 469 any tax year in the relief period is not capital gain or loss is from the disposition
apply). If the question is answered “Yes,” subject to the passive activity loss of nondepreciable personal property used
attach a statement to Schedule K-1. limitations under section 502 of the Tax in a trade or business, it may not be
Identify the income (loss), credit, etc., treated as portfolio income. Report such
Page 17
gain or loss on line 7 of Schedules K and • Recoveries of tax benefit items (section of property qualifies for the section 179
K-1. 111). deduction.
Line 4f.—Report and identify other • Gambling gains and losses (subject to Complete Part I of Form 4562 to figure
portfolio income or loss on an attachment the limitations in section 165(d)). the partnership's section 179 expense
for line 4f. For example, income reported • Any income, gain, or loss to the deduction. The partnership does not
to the partnership from a real estate partnership under section 751(b). deduct the expense itself but passes the
mortgage investment conduit (REMIC), in • Specially allocated ordinary gain expense through to its partners. Attach
which the partnership is a residual interest (loss). Form 4562 to Form 1065 and show the
holder, would be reported on an • Net gain (loss) from involuntary total section 179 expense on Schedule K,
attachment for line 4f. conversions due to casualty or theft. line 9. Report each partner's allocable
If the partnership holds a residual The amount for this line is shown on share on Schedule K-1, line 9. Line 9 of
interest in a REMIC, report on the Form 4684, Casualties and Thefts, Schedule K-1 should not be completed for
attachment for line 4f the partner's share Section B, line 20a, 20b, or 21. any partner that is an estate or trust.
of: (1) taxable income (net loss) from the Each partner's share must be The partnership must specify on an
REMIC (line 1b of Schedule Q (Form entered on Schedule K-1. Give each attachment to Schedule K-1 the items of
1066)), (2) “excess inclusion” (line 2c of partner a schedule that shows the section 179 property it elects to treat as
Schedules Q (Form 1066)), and (3) amounts to be reported on the partner's an expense, the portion of the cost of
section 212 expenses (line 3b of Form 4684, Section B, line 16, columns each item treated as an expense, the
Schedules Q (Form 1066)). Do not (b)(i), (b)(ii), and (c). portion of the cost of each item treated as
report these section 212 expenses on Note: If there was a gain (loss) from a a carryover amount, and the partner's
line 10 of Schedules K and K-1. casualty or theft to property not used in a allocable share of the partnership's
Because Schedule Q (Form 1066) is a trade or business or for income-producing section 179 expense deduction for the tax
quarterly statement, the partnership purposes, notify the partner. The year.
must follow the Schedule Q instructions partnership should not complete Form See the instructions for line 21 of
to figure the amounts to report to the 4684 for this type of casualty or theft. Schedule K-1 item e, for any recapture of
partner for the partnership's tax year. Instead, each partner will complete his or a section 174 amount.
her own Form 4684. Note: Generally, the amount of section
Line 5 179 property the partnership may elect to
Guaranteed Payments to Partners
Deductions expense is limited to $10,000. The
$10,000 limit is reduced by the amount of
Enter: (1) guaranteed payments to Line 8 section 179 property placed in service
partners for salaries and interest deducted during the tax year that exceeds
by the partnership and reported on Form Charitable Contributions $200,000. The section 179 deduction for
1065, page 1, line 10; and (2) guaranteed a partnership is further limited to the
payments to partners the partnership is Enter the total amount of charitable partnership's aggregate taxable income
required to capitalize. (See the contributions made by the partnership (gross income minus deductions,
instructions for Form 1065, line 10.) during its tax year on Schedule K. computed without regard to the section
Generally, amounts reported on line 5 Enter each partner's distributive share 179 deduction) from the active conduct of
are not considered to be related to a on Schedule K-1. Attach an itemized any trade or business during the tax year.
passive activity. For example, guaranteed list to each schedule that shows the Any amount which (but for the taxable
payments for personal services paid to a amount subject to the 50%, 30%, and income limitation) would have been
partner would not be passive activity 20% limitations. allowed as a deduction is carried forward
income. Likewise, interest paid to any If the partnership made a qualified to a future year (section 179(b)(3)(B)).
partner is not passive activity income. conservation contribution under section
170(h), include the fair market value of Line 10
Line 6 the underlying property before and after
the donation and describe the Deductions Related to Portfolio Income
Net Gain (Loss) Under Section 1231 conservation purpose furthered by the
(other than due to casualty or theft) donation. Give a copy of this information Enter on this line and attach an itemized
Enter on line 6 the amount show on line to each partner. list of the allowable deductions that are
7 of Form 4797. Do not include specially If the partnership contributed property clearly and directly allocable to portfolio
allocated ordinary gains and losses or and the aggregate amount of the claimed income (other than interest expense and
net gains or losses from involuntary value exceeds $500, Form 8283, section 212 expenses from a REMIC).
conversions due to casualties or thefts on Noncash Charitable Contributions, must Generally, interest expense related to
this line; report them on line 7. If the be completed and attached to Form 1065. portfolio income is investment interest
partnership has more than one activity, The partnership must give a copy of its expense and is reported as a separate
attach a statement to Schedule K-1 that Form 8283 to every partner if the value of item on line 12a of Schedules K and K-1,
identifies which activity the section 1231 an item or group of similar items of instead of line 10. Section 212 expenses
gain (loss) relates to. contributed property exceeds $5,000 even from the partnership's interest in a REMIC
though the amount allocated to each are reported on an attachment for line 4f
Line 7 partner is $5 000 or less. For property of Schedules K and K-1.
valued at $5,000 or less, the partnership No deduction is allowable under
Other Income (Loss) does not have to furnish the partners with section 212 for expenses allocable to a
Use line 7 to report other items of income, its Form 8283. Instead, it should pass convention, seminar, or similar meeting.
gain, or loss not included on lines 1 through each partner's share of the fair Generally, expenses related to portfolio
through 6. If the partnership has more market value of contributed property so income are miscellaneous itemized
than one activity, identify on an the partners will be able to complete their deductions to the partner and are subject
attachment the amount and the activity to own Forms 8283. See the Instructions for to the 2% floor of section 67 at the
which each amount relates. Form 8283 for additional information. partner level.
Items to be reported on line 7 include:
• Gains from the disposition of farm Line 9 Line 11
recapture property (see Form 4797) and
other items to which section 1252 applies. Section 179 Expense Deduction Other Deductions
• Gains from the disposition of an interest A partnership may elect to expense part Note: Do not include in the amounts
in oil, gas, geothermal or other mineral of the cost of certain tangible property the shown on line 11 qualified expenditures to
properties (section 1254). partnership purchased this year for use in which an election under section 59(e) may
its trade or business or rental activities. apply. Instead, report these amounts on
See Pub. 534 for a definition of what kind line 18a.
Page 18
Use line 11 to report deductions not Investment interest does not which the low-income housing credit was
included on lines 8, 9, 10, and 17e. On include interest expense allocable to allowed. Report any other low-income
an attachment identify the amount and a passive activity. housing credit for property placed in
the activity (if the partnership has more The amount on line 12a will be service before 1990 on line 13b(2). On
than one activity) to which the amount deducted (after applying the lines 13b(3) and (4) report the low-income
relates. investment interest expense limitations housing credit for property placed in
Items to be reported on line 11 include: of section 163(d)) by individual service after 1989.
a. Amounts paid by the partnership that partners on their Form 1040. Line 13c. Qualified Rehabilitation
would be allowed as itemized deductions For more information, see Form 4952, Expenditures Related to Rental Real
on any of the partners' income tax returns Investment Interest Expense Deduction. Estate Activities.—Enter total qualified
if they were paid directly by a partner for Lines 12b(1) and 12b(2). Investment rehabilitation expenditures related to
the same purpose. However, do not enter Income and Expenses.—Enter on line rental real estate activities of the
expenses related to portfolio income or 12b(1) only the investment income partnership, and for line 13c of Schedule
investment interest expense on this line. included on line 4 of Schedules K and K complete the applicable lines of Form
If there was a loss from an involuntary K-1. Enter on line 12b(2) only the 3468, Investment Credit, that apply to
conversion due to casualty or theft of investment expense included on line 10 qualified rehabilitation expenditures for
income-producing property, include in of Schedules K and K-1. property related to rental real estate
the total amount for this line the relevant activities of the partnership for which
If there are items of investment income income or loss is reported on line 2 of
amount from Form 4684, Section B, line or expense included in the amounts that
14. Schedule K. See Form 3468 for details
are required to be passed through on qualified rehabilitation expenditures.
b. Any penalty on early withdrawal separately to the partner on Schedule K-1 Attach Form 3468 to Form 1065.
of savings. (items other than the amounts included in
c. Soil and water conservation lines 4 and 10 of Schedule K-1), give For line 13c of Schedule K-1, enter
expenditures (section 175). each partner a schedule identifying these each partner's distributive share of the
amounts. expenditures. On the dotted line to the
d. Expenditures for the removal of left of the entry space for line 13c, enter
architectural and transportation barriers to Investment income includes gross the line number of Form 3468 on which
the elderly and handicapped and which income from property held for investment, the partner should report the
the partnership has elected to treat as a gain from the disposition of property held expenditures. If there is more than one
current expense (section 190). for investment, and other amounts that type of expenditure, or the expenditures
e. Any amounts paid during the tax are gross portfolio income. Generally, are from more than one line 2 activity,
year for insurance which constitutes investment income and investment report this information separately for
medical care for a partner, a partner's expenses do not include any income or each expenditure or activity on an
spouse, and a partner's dependents. expenses from a passive activity. See attachment to Schedules K and K-1.
Under the provisions of section 162(l), a Temporary Regulations section
1.469-2T(f)(10) for exceptions. Note: Qualified rehabilitation expenditures
partner may be allowed a deduction up to for property not related to rental real
25% of such amounts. Property subject to a net lease is not estate activities must be listed separately
f. Payments for a partner to an treated as investment property because it on line 21 of Schedule K-1.
IRA, Keogh, or SEP plan. is subject to the passive loss rules. Do
not reduce investment income by losses Lines 13d, 13e, and 14.—Enter the type
If there is a defined benefit plan of credit on the dotted line in column (a)
(Keogh), attach to the Schedule K-1 for from passive activities.
(or in the margin) and the amount in
each partner a statement showing the Investment expenses are deductible column (b). If there is more than one type
amount of benefit accrued for the tax expenses (other than interest) directly of credit or the credit is from more than
year. connected with the production of one activity, report this information
g. Interest expense allocated to investment income. See the instructions separately for each credit or activity on
debt-financed distributions. See for Form 4952 for more information on an attachment to Schedules K and K-1.
Notice 89-35 for more information. investment income and expenses.
Line 13d. Credits (other than credits
shown on lines 13b and 13c) Related to
Investment Interest Credits Rental Real Estate Activities.—Report
Lines 13b, 13c, 13d, 13e, and 14.— any information that the partners need to
Lines 12a through 12b(2) Lines 13b, 13c, 13d, and 13e are intended figure credits related to a rental real estate
to help partners apply the passive activity activity, other than the low-income
Lines 12a through 12b(2) must limitations of section 469. These lines housing credit and qualified rehabilitation
be completed for all partners. relate to rental activities. Use line 14 to expenditures.
Line 12a. Interest Expense on report credits related to trade or Line 13e. Credits Related to Other
Investment Debts.—Include on this line business activities. Rental Activities.—Use this line to report
interest paid or accrued to purchase or information that the partners need to
Line 13b. Low-income Housing figure credits related to a rental activity
carry property held for investment. Credit.—Section 42 provides a credit that
Property held for investment includes other than a rental real estate activity.
may be claimed by owners of low-income
property that produces portfolio income residential rental buildings. If the partners Line 14. Other Credits.—Enter each
(interest, dividends, annuities, royalties, are eligible to take the low-income housing partner's allocable share of any credit that
etc.). Interest expense allocable to credit, complete and attach Form 8586, is related to a trade or business activity.
portfolio income should be reported on Low-income Housing Credit; Form 8609, The credits to be reported on line 14 and
line 12a of Schedules K and K-1 (rather Low-Income Housing Credit Allocation other required attachments are as follows:
than line 10 of Schedules K and K-1). Certification; and Schedule A (Form
Property held for investment includes a 8609), Annual Statement, to Form 1065. • Jobs Credit. Complete and attach Form
5884 to Form 1065. This credit is
partner's interest in a trade or business Note: No low-income housing credit can apportioned among the partners according
activity that is not a passive activity to the be taken with respect to any building for to their interest in the partnership at the
partner and in which the partner does not which any person has been allowed any time the wages on which the credit is
materially participate. An example would benefit under 1986 Act section 502 computed were paid or accrued.
be a partner's working interest in oil and (relating to the transitional exception rule
gas property (where the partner's interest for low-income housing).
• Credit for Alcohol Used as Fuel.
is not limited) if the partner does not Complete and attach Form 6478 to Form
materially participate in the oil and gas Report on line 13b(1) the total 1065. This credit is apportioned to persons
activity. low-income housing credit for property who were partners on the last day of the
placed in service before 1990 with respect partnership's tax year. The credit must be
to which a partnership is to be treated included as income on page 1, line 7, of
under section 42(j)(5) as the taxpayer to Form 1065. See section 40(f)
Page 19
for an election the partnership can make Worksheet Instructions Line 15a
to not have the credit apply.
• Nonconventional Source Fuel Credit. Line 1b.—In addition to the net income Net Earnings (Loss) From
The credit is figured at the partnership (loss) from Schedule K, line 3c, include on Self-Employment
level and then is apportioned to persons line 1b any part of the net income (loss)
from rental real estate activities from Schedule K.—Enter on line 15a the
who were partners in the partnership on amount from line 9 of the worksheet.
the last day of the partnership's tax year. Schedule K, line 2, that is from: (1) rentals
received as a real estate dealer, or (2) Schedule K-1.—Do not complete this line
Attach a separate schedule to the return for any partner that is an estate, trust,
to show the computation of the credit. rentals for which services were rendered
to the occupants (other than those usually corporation, exempt organization, or
See section 29 for more information. Individual Retirement Arrangement (IRA).
• Unused Credits From Cooperatives. The or customarily rendered for the rental of
space for occupancy only). The supplying Enter on line 15a of Schedule K-1
unused credits are apportioned to persons each individual general partner's share of
who were partners in the partnership on of maid service, for example, is such a
service; but the furnishing of heat and the amount shown on line 7c of the
the last day of the partnership's tax year. worksheet. To figure an individual general
light, the cleaning of public entrances,
• Orphan Drug Credit and Credit for exits, stairways and lobbies, trash partner's share of the amount on line 7c,
Increasing Research Activities. Complete collection, etc., are not considered multiply the amount on line 7c by the
and attach Form 6765, Credit for services rendered to the occupants. decimal amount you get when you divide
Increasing Research Activities. that individual general partner's share of
• Disabled Access Credit. Complete Lines 1d, 4b, and 6b.—Allocate the
the amount shown on line 1c of the
and attach Form 8826, Disabled worksheet (using the corresponding
amounts on these lines in the same way amounts included on the partner's
Access Credit. Form 1065, page 1, line 21, is allocated
Note: See the instructions for line 21 of Schedule K-1) by the total of all individual
to these particular partners. general partners' shares of the amount
Schedule K-1 to report the partnership's
investment in property qualifying for the Line 2.—Include in the amount on line 2 shown on line 1c. Enter the amount
regular or business energy investment any guaranteed payments to partners shown on line 7b of the worksheet on the
credit (other than from cooperatives). reported on Schedules K and K-1, line 5. applicable individual general partner's
Also include other ordinary income and Schedule K-1, line 15a. Add it to the
Self-Employment expense items (other than expense partner's share of the amount on line 7c
items subject to separate limitations at of the worksheet.
Note: If the partnership is an options the partner level, such as the section If a partner is both a general and a
dealer or a commodities dealer, see 179 deduction) reported on Schedules K limited partner, add that partner's share
section 1402(i) before completing lines and K-1 that are used to compute of the amount on lines 7b and 7c to that
15a, b, and c, to determine the amount of self-employment earnings under section partner's share of the amount on line 8
any adjustment that may have to be made 1402. and enter the total on line 15a of that
to the amounts shown on the Worksheet Note: Amounts paid for health insurance partner's Schedule K-1.
for Figuring Net Earnings (Loss) From costs of self-employed individuals are Limited partners.—A limited partner's
Self-Employment. If the partnership is not deductible in computing net income share of partnership income (loss) shown
engaged solely in the operation of a group from self-employment. on line 1, 2, or 3 of Schedule K-1 is not
investment program, earnings from the Line 3.—For purposes of this line only, do self-employment income. Limited partners
operation are not self-employment not enter an amount in parentheses. may treat as self-employment income only
earnings for either general or limited
partners.
Page 20
guaranteed payments for services they 16c based only on tangible property oil, gas, and geothermal properties
actually rendered to, or on behalf of, the placed in service after 1986 (and tangible reduced by the excess intangible drilling
partnership to the extent that those property placed in service after July 31, costs that were included on page 1, Form
payments are payment for those services 1986, and before 1987 for which the 1065, on properties for which the
(line 8 of the worksheet). Show only these partnership elected to use the General partnership made the election to expense
amounts on line 15a of Schedule K-1 for Depreciation System). Refigure intangible drilling costs in tax years
a limited partner. depreciation as follows: For property beginning before 1983. Do not include on
General partners.—GeneraI partners' other than real property and property on line 16e nonproductive well costs or the
net earnings (loss) from self-employment which the straight line method was used, amount shown on line 16b, page 1, Form
do not include: use the 150% declining balance method, 1065. Instead, use any applicable
switching to straight line for the first tax amount on line 16c, page 1, Form 1065.
• Dividends on any shares of stock and year that method gives a better result. For
interest on any bonds, debentures, notes, See Form 6251 for information on how to
etc., unless the dividends or interest are property on which the straight line method compute excess intangible drilling costs.
received in the course of a trade or was used, use the straight line method. Line 16f. Other Adjustments and Tax
business, such as a dealer in stocks or Use the class life (instead of the recovery Preference Items.—Attach a schedule
securities or interest on notes or period) and the same conventions that which shows each partner's share of other
accounts receivable. you used on Form 4562. For personal items not shown on lines 16a through
property having no class life, use 12 16e(2) that are adjustments or tax
• Rentals from real estate, except rentals years. For residential rental and preference items or that the partner needs
received in the course of a trade or nonresidential real property, use the
business as a real estate dealer or to complete Form 6251, Form 4626, or
straight line method over 40 years. Form 8656. See these forms and their
payments for rooms or space when Determine the depreciation adjustment by
significant services are provided. instructions to determine the amount to
subtracting the recomputed depreciation enter.
• Royalty income, except royalty income from the depreciation claimed on Form
4562. If the recomputed depreciation Other adjustments or tax preference
received in the course of a trade or items include the following:
business. exceeds the depreciation claimed on
See the instructions for Schedule SE Form 4562, enter the difference as a • Long-term contracts entered into after
(Form 1040), Social Security negative amount. See Form 6251 for February 28, 1986. Except for certain
Self-Employment Tax, for more more information. home construction contracts, the
information. Line 16d. Depletion (Other Than Oil taxable income from these contracts
and Gas).—Do not include any depletion must be figured using the percentage of
Line 15b on oil and gas wells. The partners must completion method of accounting for
compute both their depletion deduction alternative minimum tax purposes.
Gross Farming or Fishing Income • Installment sales of inventory or stock
and their depletion preference item
Enter the gross farming or fishing income separately. in trade after March 1, 1986. Generally,
needed by an individual partner to figure In the case of mines, wells, and other the installment method may not be used
net earnings from self-employment under natural deposits, other than oil and gas for these sales in computing alternative
the optional method in Section B, Part II wells, enter the amount by which the minimum taxable income.
of Schedule SE (Form 1040). deduction for depletion under section 611 • Losses from tax shelter farm activities.
(including percentage depletion for No loss from any tax shelter farm activity
Line 15c geothermal deposits) is more than the is allowed for alternative minimum tax
adjusted basis of such property at the purposes.
Gross Nonfarm Income
end of the tax year. Figure the adjusted • Charitable contributions of appreciated
Enter the gross nonfarm income needed basis without regard to the depletion property. Generally, the deduction for
by an individual partner to figure net deduction for the tax year and figure the charitable contributions is reduced by the
earnings from self-employment under excess separately for each property. difference between the fair market value
the optional method in Section B, Part II Lines 16e(1) and 16e(2).—Enter only the and the adjusted basis of the capital gain
of Schedule SE (Form 1040). income and deductions for oil, gas, and and section 1231 property donated to a
geothermal properties that are used to charitable organization.
Adjustments and Tax figure the partnership's ordinary income
Preference Items or loss (line 21 of Form 1065). If there are Foreign Taxes
items of income or deduction for oil, gas,
Lines 16a through 16f and geothermal properties included in the Lines 17a through 17g
amounts required to be passed through
Lines 16a through 16f must be completed separately to the partners on Schedule Lines 17a through 17g must be completed
for all partners. K-1 (items not reported in line 1 of whether or not a partner is eligible for the
Enter items of income and deductions Schedule K-1), give each partner a foreign tax credit.
that are adjustments or tax preference schedule identifying these amounts. In addition to the instructions below, see
items. See Form 6251, Alternative Figure the amount for lines 16e(1) and the following for more information:
Minimum Tax— Individuals, Form 4626, (2) separately for oil and gas properties • Form 1116, Foreign Tax Credit—
Alternative Minimum Tax—Corporations, which are not geothermal deposits and Individual, Fiduciary, or Nonresident Alien
Form 8656, Alternative Minimum Tax— for all properties which are geothermal Individual, and the related instructions.
Fiduciaries, and Pub. 909, Alternative deposits. • Form 1118, Foreign Tax Credit-
Minimum Tax for Individuals, to determine Corporations, and the related instructions,
the amounts to enter and for other Give each partner a schedule that
information. shows the separate amounts that are • Pub. 514, Foreign Tax Credit for
included in the computation of the Individuals.
Do not include as a tax preference item amounts on lines 16e(1) and (2). Line 17a. Type of Income.—Enter the
any qualified expenditures to which an Line 16e(1). Gross Income From Oil, type of income from outside the U.S. as
election under section 59(e) may apply. Gas, and Geothermal Properties.— follows:
Instead, report these expenditures on Enter the aggregate amount of gross
lines 18a and 18b. Because these income (within the meaning of section • Passive income
expenditures are subject to an election by 613(a)) from all oil, gas, and geothermal • High withholding tax interest
each partner, the partnership cannot properties that was received or accrued • Financial services income
compute the amount of any tax during the tax year and included on page • Shipping income
preference related to them. 1, Form 1065. • Dividends from a DISC or former DISC
Line 16c. Depreciation Adjustment Line 16e(2). Deductions Allocable to Oil, • Distributions from a foreign sales
on Property Placed in Service After Gas, and Geothermal Properties.—Enter corporation (FSC) or former FSC
1986.—Figure the adjustment for line the amount of any deductions allocable to
Page 21
• Dividends from each noncontrolled and 17f, such as gross income and Recapture of Low-income Housing Credit,
section 902 corporation definitely allocable deductions from to Form 1065.
• Taxable income attributable to sources outside the United States and See the instructions for Form 8611
foreign trade income (within the for foreign branches, for corporate regarding the specific information that the
meaning of section 923(b)) partners (Form 1118, Schedule F). partnership must provide to each partner
• General limitation income—all other when recapture is required.
income from sources outside the Other Note: In certain instances, a transaction
United States (including income from by a partner may result in recapture at the
Lines 18a and 18b.—Generally, partner level. In such cases, the
sources within U.S. possessions) section 59(e) allows each partner to
If, for the country or U.S. possession partnership will be required to provide the
make an election to deduct the partner's partner with the information that the
shown on line 17b, the partnership had distributive share of the partnership's
more than one type of income, enter otherwise deductible qualified partner needs in order to correctly
“See attached” and attach a schedule expenditures ratably over 10 years (3 compute the recapture amount.
for each type of income for lines 17c years for circulation expenditures), Report on line 19a the total low-income
through 17g. beginning with the tax year in which the housing credit recapture with respect to a
Line 17b. Foreign Country or U.S. expenditures were made (or for intangible partnership treated under section 42(j)(5)
Possession.—Enter the name of the drilling and development costs, over the as the taxpayer to which the low-income
foreign country or U.S. possession. If, for 60-month period beginning with the housing credit was allowed. Report any
the type of income shown on line 17a, the month in which such costs were paid or other low-income housing credit recapture
partnership had income from, or paid incurred). The term “qualified on line 19b.
taxes to more than one foreign country or expenditures” includes only the following If the partnership has posted a bond
U.S. possession, enter “See attached” types of expenditures paid or incurred as provided in section 42(j)(6) to avoid
and attach a schedule for each country for during the tax year: circulation recapture, no entry should be made on
lines 17a and 17c through 17g. expenditures, research and experimental line 19 of Schedule K-1.
Line 17c. Total Gross Income From expenditures, intangible drilling and See Form 8586, Form 8611, and
Sources Outside the U.S.—Enter in development costs, and mining exploration section 42 for more information.
U.S. dollars the total gross income from and development costs. If a partner makes
sources outside the U.S. Attach a this election, these items are not treated as Lines 20a through 20e (Schedule K-1
tax preference items. only) Investment Credit Properties
schedule that shows each type of income Subject to Recapture.—Complete line 20
listed in the instructions for line 17a. Because the partners are generally when regular or energy investment credit
See section 904(d) for types of income allowed to make this election, the property is disposed of, ceases to qualify,
that must be reported to partners for partnership cannot deduct these amounts or there is a decrease in the percentage of
figuring their foreign tax credit. or include them as adjustments or tax business use before the end of the
preference items on Schedule K-1. recapture period or the useful life used to
Line 17d. Total Applicable Deductions Instead, on lines 18a and 18b of figure the original credit. Lines 20a through
and Losses.—Enter in U.S. dollars the Schedule K-1, the partnership passes 20e must be completed whether or not a
total applicable deductions and losses. through the information the partners need partner is subject to the recapture of
Attach a schedule that shows each type to compute their separate deductions. investment credit. For more information.
of deduction or loss as follows: Enter on line 18a the qualified see Form 4255, Recapture of Investment
• expenses directly allocable to each expenditures paid or incurred during the Credit.
type of income; tax year to which an election under Line 20b. Analysis of Total Distributive
• pro rata share of all other deductions section 59(e) may apply. Enter this Income/Payment Items by Type of
not directly allocable to specific items of amount for all partners whether or not any Partner (Schedule K only).—For each
income; and partner makes an election under section type of partner shown, enter the portion of
• pro rata share of losses from other 59(e). On line 18b, enter the type of the amount shown on line 20a of
separate limitation categories, expenditures claimed on line 18a. If the Schedule K that was allocated to that type
expenditures are for intangible drilling and of partner. The sum of the amounts shown
Line 17e. Total Foreign Taxes.—Enter development costs, enter the month in
in U.S. dollars the total foreign taxes on line 20b must equal the amount shown
which the expenditures were paid or on line 20a.
(described in section 901) that were paid incurred (after the type of expenditure on
or accrued by the partnership to foreign line 18b). If there is more than one type of In classifying partners who are
countries or U.S. possessions. Attach a expenditure included in the total shown on individuals as “active” or “passive,” the
schedule that shows the dates the taxes line 18a (or intangible drilling and partnership should apply the rules below.
were paid or accrued, and the amount in development costs were paid or incurred In applying these rules, a partnership
both foreign currency and in U.S. dollars, for more than one month), report this should classify each partner to the best of
as follows: information separately for each type of its knowledge and belief. It is assumed
• taxes withheld at source on dividends; expenditure (or month) on an attachment that in most cases the level of a particular
partner's participation in an activity will be
• taxes withheld at source on rents to Schedules K and K-1.
apparent:
and royalties; and Line 19 (Schedule K only).—Attach a 1. If the partnership's principal activity
• other foreign taxes paid or accrued. statement to Schedule K to report the is a trade or business, classify a general
partnership's total income, expenditures, partner as “active” if the partner
Line 17f. Reduction in Taxes or other information for items a through o
Available for Credit.—Enter in U.S. materially participated in all partnership
of the line 21 (Schedule K-1) instructions trade or business activities; otherwise,
dollars, the total reduction in taxes on page 23.
available for credit. Attach, a schedule classify a general partner as “passive.”
that shows separately the: 2. If the partnership's principal activity
• reduction for foreign mineral income Recapture of Tax Credits consists of a working interest in an oil or
(section 901(e)); Lines 19a and 19b (Schedule K-1 only). gas well, classify a partner holding a
• reduction for failure to furnish returns Recapture of Low-income Housing working interest in the oil or gas well
required under section 6038; Credit.—If there has been a decrease in through an entity that does not limit the
• reduction for taxes attributable to the qualified basis of a building from the partner's liability as “active”; otherwise,
boycott operations (section 908); prior year or if the partnership disposed of classify the partner as “passive.”
• reduction for foreign oil and gas the building or of an ownership interest in 3. If the partnership's principal activity
extraction income (section 907(a)); and it, the partnership may be required to is a rental real estate activity, classify a
• reduction for any other items (specify). recapture part of a credit claimed in a prior general partner as “active” if the partner
Line 17g. Other Foreign Tax year. If recapture applies, the partnership actively participated in all of the
Information.—Enter in U.S. dollars any must attach Form 8611, partnership's rental real estate activities;
items not covered on lines 17c, 17d, 17e,
Page 22
otherwise, classify a general partner a shareholder in a mutual fund or long-term contracts entered into after
as “passive.” other regulated investment company. February 28, 1986, that are
4. If the partnership's principal activity e. Recapture of expense deduction for accounted for under either the
is a portfolio activity, classify all partners recovery property (section 179). For percentage of completion-capitalized
as “active.” property placed in service after 1986, cost method or the percentage of
5. Classify all limited partners and all the section 179 expense deduction is completion method. Also attach to
partners in a partnership whose principal recaptured at any time the business Form 1065 the information specified
activity is a rental activity other than a use of the property drops to 50% or in the instructions for line 2, Form
rental real estate activity as “passive.” less. Enter the amount that was 8697, for each tax year in which such
originally passed through to the a long-term contract is completed.
6. If the partnership cannot make a
reasonable determination whether a partners and the partnership's tax l. Any information needed by a partner
partner's participation in a trade or year in which the amount was relating to interest expense that the
business activity is material or whether passed through. Tell the partner if partner is required to capitalize.
a partner's participation in a rental real the recapture amount was caused by Under section 263A, a partner may
estate activity is active, classify the the disposition of the recovery be required to capitalize interest
partner as “passive.” property. Do not include this amount expense incurred by the partner
in the partnership's income. during the tax year with respect to
Line 21 (Schedule K-1 only) f. Any items the partners need to the production expenditures of the
determine the basis of their interest partnership. Similarly, interest
Enter in the line 21 Supplemental for purposes of section 704(d) incurred by a partnership may have
Information space of Schedule K-1, or on because Schedule M and Item K on to be capitalized by a partner with
an attached schedule if more space is Schedule K-1 are not completed; or respect to the partner's own
needed, each partner's share of any any items (other than those shown in production expenditures. The
information asked for on lines 7 through Item B) the partners need to figure information required by the partner to
20 that is required to be reported in their amount at risk. properly capitalize interest for this
detail, and items a through o below. purpose must be provided on an
Please identify the applicable line g. Any information or statements the attachment to Schedule K-1. See
number next to the information entered in partners need to comply with section
6111 (registration of tax shelters) or Notice 88-99 for more information.
the Supplemental Information space. m. Any information a partner that is a
Show income or gains as a positive section 6662(d)(2)(B)(ii) (regarding
adequate disclosure of items that tax-exempt organization may need to
number. Show losses in parentheses. compute that partner's share of
may cause an understatement of
a. Taxes paid on undistributed capital income tax). unrelated business taxable income
gains by a regulated investment under section 512(a)(1) (but excluding
company. As a shareholder of a h. The partner's share of farm
production expenses, if the any modifications required by
regulated investment company, the paragraphs (8) through (15) of
partnership will receive notice on partnership is not required to use the
accrual method of accounting. See section 512(b)).
Form 2439, Notice to Shareholder of Note: Partners are required to notify
Undistributed Long-Term Capital Temporary Regulations section
1.263A-1T(c). the partnership of their tax-exempt
Gains, that the company paid tax on status.
undistributed capital gains, i. Any information needed by a partner
to compute the interest due under n. Investment in property qualifying for
b. The number of gallons of each fuel the regular or business energy
used during the tax year and the section 453(l)(3). If the partnership
elected to report the disposition of investment credit. Complete and
appropriate tax rate for each type of attach Form 3468 to Form 1065. See
use identified on Form 4136, Credit certain timeshares and residential
lots on the installment method, each Form 3468 and the related
for Federal Tax on Fuels, and in the instructions for information on eligible
related instructions. Each partner's partner's tax liability must be
increased by the partner's allocable property and the lines on Form 3468
share of the credit for qualified to complete. Do not include that part
diesel-powered highway vehicles share of the interest on tax
attributable to the installment of the cost of the property the
as shown on Form 4136. partnership has elected to expense
c. The partner's share of gross income payments received during the tax
year. under section 179. Attach to each
from each property, share of Schedule K-1 a separate schedule in
production for the tax year, etc., j. Any information needed by a partner
to compute interest due under a format similar to that shown on
needed to figure the partner's Form 3468 detailing each partner's
depletion deduction for oil and gas section 453A(c). If an obligation
arising from the disposition of share of any regular investment credit
wells. The partnership should also property, qualified energy property,
allocate to each partner a property to which section 453A
applies is outstanding at the close of and qualified rehabilitation
proportionate share of the adjusted expenditures not related to rental real
basis of each partnership oil or gas the year, report each partner's
allocable share of the outstanding estate activities. Also indicate the
property. The allocation of the basis lines of Form 3468 on which the
of each property is made as specified installment obligation to which
section 453A(b) applies. partners should report these
in section 613A(c)(7)(D). amounts.
The partnership cannot deduct k. For closely held partnerships (as o. Any other information a partner may
depletion on oil and gas wells. The defined in section 460(b)(5)), provide need to file his or her return that is
partner must determine the allowable the information needed by a partner not shown anywhere else on
amount to report on his or her return. to compute the partner's allocable Schedule K-1. For example, if one of
See Pub. 535 for more information. share of any interest due or to be the partners is a pension plan, that
d. Tax-exempt interest income, including refunded under the look-back method partner may need special information
exempt-interest dividends received as of section 460(b)(3) on certain to properly file its tax return.
Page 23
Codes for Principal Business Activity and Principal Product or Service
These codes for the Principal Business Activity are Using the list below, enter on page 1, Item C, the or service which accounts for the largest percentage
designed to classify an enterprise by the type of code for the specific industry group for which the of total assets. For example, if the principal business
activity in which it is engaged to facilitate the largest percentage of “total assets (Schedule L, line activity is “Retail food store,” the principal product or
administration of the Internal Revenue Code. Though 14, column (d))” is used. service may be “dairy products.”
similar in format and structure to the Standard In Item A, state the principal business
Industrial Classification Codes (SIC), they should not activity. In Item B, state the principal product
be used as SIC codes.
Code Code Code
Agriculture, Forestry, and Fishing
Code Transportation, Communication, Furniture, home furnishings, and Personal services:
Farms: Electric, Gas. and Sanitary equipment stores: 7215 Coin-operated laundries and
0120 Field crop. Services 5712 Furniture stores. dry cleaning.
Local and Interurban passenger transit: 7219 Other laundry, cleaning, and
0160 Vegetable and melon farms. 5713 Floor covering stores.
0170 Fruit and nut tree farms. 4121 Taxicabs. 5714 Drapery, curtain, and garment services.
0180 Horticultural specialty. 4189 Other passenger transportation. upholstery stores. 7221 Photographic studios and
0211 Beef cattle feedlots. Trucking and warehousing: 5719 Home furnishings, except portrait studios.
0212 Beef cattle, except feedlots. 4210 Trucking (local and long distance), appliances. 7231 Beauty shops.
0215 Hogs, sheep, and goats. except trash collection. 5722 Household appliance stores. 7241 Barber shops.
0240 Dairy farms. 4216 Trash collection without own dump. 5732 Radio and television stores. 7251 Shoe repair and hat
0250 Poultry and eggs. 4220 Public warehousing. 5733 Music stores. cleaning shops.
0260 General livestock (except animal 5734 Computer and software stores. 7261 Funeral services and crematories.
specialty). Other transportation including 7291 Income tax preparation.
transportation services: Eating and drinking places:
0270 Animal specialty. 5812 Eating places. 7299 Miscellaneous personal services.
4400 Water transportation.
Agricultural services and forestry: 4540 Transportation by air. 5813 Drinking places. Business services:
0740 Veterinary services. 4722 Passenger transportation Miscellaneous retail stores: 7310 Advertising.
0753 Livestock breeding. arrangement. 5912 Drug stores and proprietary stores. 7340 Janitorial and window cleaning.
0754 Ammal services, except livestock 4799 Other transportation services. 5921 Liquor stores. 7350 Equipment rental and leasing.
breeding and veterinary. 4800 Communication. 5932 Used merchandise and antique 7370 Computer and data
0780 Landscape and horticultural 4900 Utilities, including dumps, stores (except motor vehicle parts). processing services.
services. snowplowing. etc. 5941 Sporting goods stores and 7398 Other business services.
0790 Other agricultural services. bicycle shops. Automotive repair and services:
0800 Forestry, except logging. Wholesale Trade—Selling Goods 5942 5943
Book stores.
Stationery stores.
7510 Automotive rentals and
2400 Logging. to Other Businesses, Government, 5944 Jewelry stores. leasing, without drivers.
Fishing. hunting, and trapping: or Institutions, etc. 5945 Hobby, toy, and game shops.
7520 Automobile parking.
Durable goods, including machinery, 5946 Camera and photographic 7538 General automobile repair shops.
0930 Commercial fishing, equipment, wood, metals, etc.: 7539 Other automotive repair shops.
hatcheries, and preserves. supply stores.
5001 Selling for your own account. 5947 Gift, novelty, and souvenir shops. 7540 Automotive services, except
0970 Hunting, trapping, and repair.
5002 Agent or broker for other 5948 Luggage and leather goods stores.
game propagation.
firms-more than 50% of gross 5949 Sewing, needlework, and Miscellaneous repair services:
Mining sales on commission. piece goods stores. 7622 Radio and TV repair shops.
1000 Metal mining. Nondurable goods, including food, 5961 Mail order houses. 7628 Electrical repair shops,
1200 Coal mining. 5962 Merchandising machine operators. except radio and TV.
fiber, chemicals etc.: 5963 Direct selling organizations.
1300 Oil and gas extraction. 5101 Selling for your own account. 7641 Reupholstery and furniture repair.
1400 Nonmetallic minerals except fuel. 5983 Fuel oil dealers. 7680 Other miscellaneous repair shops.
5102 Agent or broker for other 5984 Liquefied petroleum gas
Construction firms-more than 50% of Motion picture:
(bottled gas) dealers.
gross sales on commission. 5989 Other fuel dealers (except 7812 Other motion picture and TV film
General building contractors and
operative builders: gasoline) and tape activities.
Retail Trade 5992 Florists. 7830 Motion picture theaters.
1510 General building contractors. 7840 Videotape rental stores.
1531 Operative builders. Building materials, hardware, 5996 Other miscellaneous retaiI stores.
garden supply, and mobile home Amusement and recreation services:
Heavy construction contractors: Finance, Insurance, and
1611 Highway and street construction. dealers: 7920 Producers, orchestras, and
1620 Heavy construction, except 5211 Lumber and other building Real Estate entertainers.
highway. materials dealers. 6000 Banking. 7933 Bowling alleys.
5231 Paint, glass, and wallpaper stores. 6100 Credit agencies other than banks. 7941 Professional sports clubs
Special trade contractors: 5251 Hardware stores. and promoters.
Security and commodity brokers,
1711 Plumbing, heating, and air 5261 Retail nurseries and garden stores. 7948 Racing, including track operation.
conditioning. 5271 Mobile home dealers. dealers, exchanges, and services:
7980 Other amusement and
1721 Painting, paper hanging, and 6212 Security underwriting syndicates. recreation services.
decorating. General merchandise: 6218 Security brokers and dealers, 7991 Physical fitness facilities.
1731 Electrical work. 5331 Variety stores. except underwriting syndicates.
1740 Masonry, drywall, stone, tile. 5398 Other general merchandise stores. 6299 Commodity contracts brokers and Medical and health services:
1750 Carpentering and flooring. dealers; security and commodity 8011 Offices and clinics of medical
Food stores:
1761 Roofing, siding, and sheet metal. exchanges: and allied services. doctors (MD's).
1771 Concrete work. 5411 Grocery stores.
5420 Meat and fish markets Real estate: 8021 Offices and clinics of dentists.
1781 Water well drilling. 6411 insurance agents, brokers, 8031 Offices of osteopathic physicians.
freezer provisioners.
1790 Other building trade contractors 5431 Fruit stores and vegetable markets. and services. 8041 Offices of chiropractors.
(excavation, glazing, etc.) 5441 Candy, nut, and confectionery 6511 Real estate operators 8042 Offices of optometrists.
stores. (except developers) and 8047 Other licensed health
Manufacturing lessors of buildings. practitioners.
5451 Dairy products stores.
2000 Food and kindred products. 6520 Lessors of real property other than 8048 Registered and practical nurses.
5460 Retail bakeries.
2200 Textile mill products. buildings. 8050 Nursing and personal care
2300 Apparel and other textile products. 5490 Other food stores. 6531 Real estate agents, brokers, facilities.
2400 Lumber and wood products, Automotive dealers and service and managers. 8060 Hospitals.
except furniture. stations: 6541 Title abstract offices. 8072 Dental laboratories.
2500 Furniture and fixtures. 5511 New car dealers (franchised). 6552 Subdividers and developers, 8098 Other medical and health
2700 Printing, publishing and 5521 Used car dealers. except cemeteries. services.
allied industries. 5531 Auto and home supply stores. 6553 Cemetery subdividers and
5541 Gasoline service stations. Other services:
2800 Chemicals and allied products. developers.
3000 Rubber and plastic products. 5551 Boat dealers. 8111 Legal services.
3100 Leather and leather products. 5561 Recreational vehicle dealers. Holding and other investment 8200 Educational services.
3200 Stone, clay, and glass products. 5571 Motorcycle dealers. companies: 8351 Child daycare.
3300 Primary metal industries. 5599 Aircraft, and other automotive 6746 Investment clubs. 8722 Certified public accountants.
3400 Fabricated metal products. dealers. 6747 Common trust funds. 8723 Other accounting, auditing,
3500 Machinery except electrical. Apparel and accessory stores: 6748 Other holding and and bookkeeping services.
3600 Electrical and electronic investment companies. 8740 Management, consulting, and
5611 Men's and boys clothing public relations services.
equipment. and furnishings. Services
3700 Transportation equipment. 8911 Engineering and
5621 Women's ready-to-wear stores. Hotels and other lodging places: architectural services.
3970 Other manufacturing industries. 5631 Women's accessory and
7012 Hotels. 8999 Other services not
specialty stores.
classified elsewhere.
5641 Children's and infants' wear stores. 7013 Motels, motor hotels, and
5651 Family clothing stores. tourist courts.
5661 Shoe stores. 7021 Rooming and boarding houses.
5681 Furriers and fur shops. 7032 Sporting and recreational camps.
7033 Trailer parks and camp sites.
5699 Other apparel and accessory stores.