Use the information presented to prepare a Form 1065 and Schedule D. Also prepare one Schedule K-1 (on form 1065) for Ms. Maine.

ACCT 346 Spring 2014 Tax Return Case Study Part 2 -- Form 1065 During the year ended 12/31/2012, Research Associates: Paid partner draws of $198,000 to Ms. Maine and $22,000 to Dr. Rue. Made guaranteed payments of $200,000 to Ms. Maine, and $100,000 to Dr. Rue. Received exempt municipal interest income of $5,000. Received dividend1 income of $30,000 from Marvelous Cures, Inc. (in which Research has a 30% ownership interest) and $20,000 from corporations in which Research has less than a 20% ownership interest. All dividends are qualified dividends. Paid no salaries/wages attributable to inventories. Also note that the partners had $396,000 (Ms. Maine) and $44,000 (Dr. Rue) in their capital accounts at the beginning of the year. The partnership's balance sheets and income statement are presented in Exhibits 3 and 4, respectively. Exhibit 3 Research Associates Balance Sheet Years ended December 31, 2011 and 2012 Balances as of ASSETS Cash Inventory Depreciable assets (net) TOTAL ASSETS LIABILITIES & RETAINED EARNINGS Accounts payable (inventory) Notes payable Partners' capital TOTAL LIABILITIES & PARTNERS' CAPITAL 1 12/31/11 $25,000 $150,000 $300,000 $475,000 12/31/12 $71,000 $100,000 $200,000 $371,000 $10,000 $25,000 $440,000 $12,000 $0 $359,000 $475,000 $371,000 ACCT 346 Spring 2014 Exhibit 4 Research Associates Income Statement Year ended December 31, 2012 Gross receipts Cost-of-Goods Sold Dividend Income Interest Income Capital losses $1,000,000 ($250,000) $50,000 $20,000 ($35,000) $785,000 Guaranteed Payments Salaries and wages Rents Property taxes Utilities Depreciation Charitable contributions Investment interest expense ($300,000) ($120,000) ($60,000) ($10,000) ($24,000) ($100,000) ($20,000) ($12,000) ($646,000) $139,000 Property Transactions Item Purchase** Price - Date Sale Price - Date 100 shares of CYA stock $3,000 - 1/1/00 $7,000 - 1/15/12 2,000 shares of ABZ stock $100,000 - 6/30/00 $54,000 - 6/29/12 City of LA Bonds $25,000 - 10/15/11 $22,000 - 2/14/12 State of MI Bonds $125,000 - 5/30/11 $135,000 - 10/31/12 **The taxpayer received 1099s for these transactions, but the basis was not reported to the IRS. 2 ACCT 346 Spring 2014 Required Use the information presented to prepare the assigned pages of the Form 1065 and Schedule D. Also prepare one Schedule K-1 (Form 1065) for Ms. Maine. (You will not be filing a complete return.) Use PDF forms from the IRS web site. 3 SCHEDULE D (Form 1040) Department of the Treasury Internal Revenue Service (99) OMB No. 1545-0074 Capital Gains and Losses Short-Term Capital Gains and LossesAssets Held One Year or Less Complete Form 8949 before completing line 1, 2, or 3. This form may be easier to complete if you round off cents to whole dollars. 1 Short-term totals from all Forms 8949 with checked in Part I . . . . . . . . . . 2 Short-term totals from all Forms 8949 with checked in Part I . . . . . . . . . . 3 Short-term totals from all Forms 8949 with checked in Part I . . . . . . . . . . box . . box . . box . . (d) Proceeds (sales price) from Form(s) 8949, Part I, line 2, column (d) (g) Adjustments to (e) Cost or other basis gain or loss from from Form(s) 8949, Part Form(s) 8949, Part I, I, line 2, column (e) line 2, column (g) (h) Gain or (loss) Subtract column (e) from column (d) and combine the result with column (g) A . B . C . 4 Short-term gain from Form 6252 and short-term gain or (loss) from Forms 4684, 6781, and 8824 . 5 Net short-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Short-term capital loss carryover. Enter the amount, if any, from line 8 of your Capital Loss Carryover Worksheet in the instructions . . . . . . . . . . . . . . . . . . . . . . . 7 Net short-term capital gain or (loss). Combine lines 1 through 6 in column (h). If you have any longterm capital gains or losses, go to Part II below. Otherwise, go to Part III on the back . . . . . Part II Attachment Sequence No. 12 Your social security number Name(s) shown on return Part I 2012 Attach to Form 1040 or Form 1040NR. Information about Schedule D and its separate instructions is at www.irs.gov/form1040. Use Form 8949 to list your transactions for lines 1, 2, 3, 8, 9, and 10. 4 5 6 ( ) 7 Long-Term Capital Gains and LossesAssets Held More Than One Year Complete Form 8949 before completing line 8, 9, or 10. This form may be easier to complete if you round off cents to whole dollars. (d) Proceeds (sales price) from Form(s) 8949, Part II, line 4, column (d) Adjustments to (h) Gain or (loss) (e) Cost or other basis (g) gain or loss from Subtract column (e) from from Form(s) 8949, Part Form(s) 8949, Part II, column (d) and combine II, line 4, column (e) line 4, column (g) the result with column (g) 8 Long-term totals from all Forms 8949 with box A checked in Part II . . . . . . . . . . . . 9 Long-term totals from all Forms 8949 with box B checked in Part II . . . . . . . . . . . . 10 Long-term totals from all Forms 8949 with box C checked in Part II . . . . . . . . . . . . . 11 Gain from Form 4797, Part I; long-term gain from Forms 2439 and 6252; and long-term gain or (loss) from Forms 4684, 6781, and 8824 . . . . . . . . . . . . . . . . . . . . . . 11 12 Net long-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 12 13 Capital gain distributions. See the instructions . . . . . . . . . . . . . . . . . . 14 Long-term capital loss carryover. Enter the amount, if any, from line 13 of your Capital Loss Carryover Worksheet in the instructions . . . . . . . . . . . . . . . . . . . . . . . 15 Net long-term capital gain or (loss). Combine lines 8 through 14 in column (h). Then go to Part III on the back . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 11338H 14 ( ) 15 Schedule D (Form 1040) 2012 Page 2 Schedule D (Form 1040) 2012 Part III 16 Summary Combine lines 7 and 15 and enter the result . . . . . . . . . . . . . . . . . . 16 If line 16 is a gain, enter the amount from line 16 on Form 1040, line 13, or Form 1040NR, line 14. Then go to line 17 below. If line 16 is a loss, skip lines 17 through 20 below. Then go to line 21. Also be sure to complete line 22. If line 16 is zero, skip lines 17 through 21 below and enter -0- on Form 1040, line 13, or Form 1040NR, line 14. Then go to line 22. 17 Are lines 15 and 16 both gains? Yes. Go to line 18. No. Skip lines 18 through 21, and go to line 22. 18 Enter the amount, if any, from line 7 of the 28% Rate Gain Worksheet in the instructions 18 19 Enter the amount, if any, from line 18 of the Unrecaptured Section 1250 Gain Worksheet in the instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 20 . . Are lines 18 and 19 both zero or blank? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040, line 44 (or in the instructions for Form 1040NR, line 42). Do not complete lines 21 and 22 below. No. Complete the Schedule D Tax Worksheet in the instructions. Do not complete lines 21 and 22 below. 21 If line 16 is a loss, enter here and on Form 1040, line 13, or Form 1040NR, line 14, the smaller of: The loss on line 16 or ($3,000), or if married filing separately, ($1,500) } . . . . . . . . . . . . . . . 21 ( ) Note. When figuring which amount is smaller, treat both amounts as positive numbers. 22 Do you have qualified dividends on Form 1040, line 9b, or Form 1040NR, line 10b? Yes. Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040, line 44 (or in the instructions for Form 1040NR, line 42). No. Complete the rest of Form 1040 or Form 1040NR. Schedule D (Form 1040) 2012 Final K-1 Schedule K-1 (Form 1041) Department of the Treasury Internal Revenue Service 2012 Part III Amended K-1 661112 OMB No. 1545-0092 Beneficiary's Share of Current Year Income, Deductions, Credits, and Other Items 12 2a Other information Qualified dividends , 2012, , 20 Beneficiary's Share of Income, Deductions, See back of form and instructions. Credits, etc. 3 Net short-term capital gain 4a Net long-term capital gain 4b 28% rate gain 4c Unrecaptured section 1250 gain 5 Other portfolio and nonbusiness income 6 Ordinary business income 7 Net rental real estate income 8 Other rental income 9 Part I Credits and credit recapture Ordinary dividends 2b Alternative minimum tax adjustment 14 and ending Interest income Final year deductions 13 or tax year beginning 11 1 For calendar year 2012, Directly apportioned deductions Information About the Estate or Trust A Estate's or trust's employer identification number B Estate's or trust's name C D Fiduciary's name, address, city, state, and ZIP code Check if Form 1041-T was filed and enter the date it was filed E Check if this is the final Form 1041 for the estate or trust 10 Part II Estate tax deduction Information About the Beneficiary F Beneficiary's identifying number G Beneficiary's name, address, city, state, and ZIP code H Domestic beneficiary Foreign beneficiary For Paperwork Reduction Act Notice, see the Instructions for Form 1041. For IRS Use Only *See attached statement for additional information. Note. A statement must be attached showing the beneficiary's share of income and directly apportioned deductions from each business, rental real estate, and other rental activity. IRS.gov/form1041 Cat. No. 11380D Schedule K-1 (Form 1041) 2012 Page 2 Schedule K-1 (Form 1041) 2012 This list identifies the codes used on Schedule K-1 for beneficiaries and provides summarized reporting information for beneficiaries who file Form 1040. For detailed reporting and filing information, see the Instructions for Schedule K-1 (Form 1041) for a Beneficiary Filing Form 1040 and the instructions for your income tax return. Report on 1. Interest income Form 1040, line 8a 2a. Ordinary dividends Form 1040, line 9a 2b. Qualified dividends Form 1040, line 9b 3. Net short-term capital gain Schedule D, line 5 4a. Net long-term capital gain Schedule D, line 12 4b. 28% rate gain 28% Rate Gain Worksheet, line 4 (Schedule D Instructions) 4c. Unrecaptured section 1250 gain Unrecaptured Section 1250 Gain Worksheet, line 11 (Schedule D Instructions) 5. Other portfolio and nonbusiness income Schedule E, line 33, column (f) 6. Ordinary business income Schedule E, line 33, column (d) or (f) 12. Alternative minimum tax (AMT) items Code A Adjustment for minimum tax purposes B AMT adjustment attributable to qualified dividends C AMT adjustment attributable to net short-term capital gain D AMT adjustment attributable to net long-term capital gain E AMT adjustment attributable to unrecaptured section 1250 gain F AMT adjustment attributable to 28% rate gain G Accelerated depreciation H Depletion I Amortization J Exclusion items 13. Credits and credit recapture A Credit for estimated taxes B Credit for backup withholding C Low-income housing credit 7. Net rental real estate income Schedule E, line 33, column (d) or (f) D Rehabilitation credit and energy credit 8. Other rental income Schedule E, line 33, column (d) or (f) F Work opportunity credit G Credit for small employer health insurance premiums 9. Directly apportioned deductions Code A Depreciation Form 8582 or Schedule E, line 33, column (c) or (e) B Depletion Form 8582 or Schedule E, line 33, column (c) or (e) C Amortization Form 8582 or Schedule E, line 33, column (c) or (e) 10. Estate tax deduction E Other qualifying investment credit Schedule A, line 28 11. Final year deductions } Report on Form 6251, line 15 See the beneficiary's instructions and the Instructions for Form 6251 } 2013 Form 8801 Form 1040, line 63 Form 1040, line 62 H Alcohol and cellulosic biofuel fuels credit I Credit for increasing research activities J Renewable electricity, refined coal, and Indian coal production credit K Empowerment zone and renewal community employment credit L Indian employment credit M Orphan drug credit A Excess deductions Schedule A, line 23 B Short-term capital loss carryover Schedule D, line 5 N Credit for employer-provided child care and facilities C Long-term capital loss carryover Schedule D, line 12; line 5 of the wksht. for Sch. D, line 18; and line 16 of the wksht. for Sch. D, line 19 O Biodiesel and renewable diesel fuels credit D Net operating loss carryover regular tax Form 1040, line 21 E Net operating loss carryover minimum tax Form 6251, line 11 P Nonconventional source fuel credit Q Credit to holders of tax credit bonds R Agricultural chemicals security credit S Energy efficient appliance credit T Credit for employer differential wage payments U Recapture of credits 14. Other information See the beneficiary's instructions A Tax-exempt interest Form 1040, line 8b B Foreign taxes Form 1040, line 47 or Sch. A, line 8 Form 8903, line 7, col. (b) (also see the beneficiary's instructions) C Qualified production activities income D Form W-2 wages Form 8903, line 17 E Net investment income Form 4952, line 4a F Gross farm and fishing income Schedule E, line 42 G Foreign trading gross receipts (IRC 942(a)) See the Instructions for Form 8873 H Other information See the beneficiary's instructions Note. If you are a beneficiary who does not file a Form 1040, see instructions for the type of income tax return you are filing. 1065 U.S. Return of Partnership Income Form Department of the Treasury Internal Revenue Service A Principal business activity For calendar year 2012, or tax year beginning B Principal product or service Print or type. C Business code number OMB No. 1545-0099 , 2012, ending , 20 2012 . Information about Form 1065 and its separate instructions is at www.irs.gov/form1065. Name of partnership D Employer identification number Number, street, and room or suite no. If a P.O. box, see the instructions. E Date business started City or town, state, and ZIP code F Total assets (see the instructions) $ G H I J (1) (2) (3) Initial return Final return Name change (4) Address change (6) Technical termination - also check (1) or (2) Other (specify) Check accounting method: (1) Cash (2) Accrual (3) Number of Schedules K-1. Attach one for each person who was a partner at any time during the tax year (5) Check applicable boxes: Check if Schedules C and M-3 are attached . . . . . . . . . . . . . . . . . . . . . . . Amended return . . . . . Deductions (see the instructions for limitations) Income Caution. Include only trade or business income and expenses on lines 1a through 22 below. See the instructions for more information. 1a b c 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16a b 17 18 19 20 21 22 Signature of general partner or limited liability company member manager Print/Type preparer's name Firm's name Preparer's signature Paid Preparer Use Only 1c 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16c 17 18 19 20 21 22 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than general partner or limited liability company member manager) is based on all information of which preparer has any knowledge. Sign Here 1a Gross receipts or sales . . . . . . . . . . . . . Returns and allowances . . . . . . . . . . . . 1b Balance. Subtract line 1b from line 1a . . . . . . . . . . . . . . . . . . Cost of goods sold (attach Form 1125-A) . . . . . . . . . . . . . . . . Gross profit. Subtract line 2 from line 1c . . . . . . . . . . . . . . . . . Ordinary income (loss) from other partnerships, estates, and trusts (attach statement) . . Net farm profit (loss) (attach Schedule F (Form 1040)) . . . . . . . . . . . . Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797) . . . . . . . . Other income (loss) (attach statement) . . . . . . . . . . . . . . . . . Total income (loss). Combine lines 3 through 7 . . . . . . . . . . . . . . Salaries and wages (other than to partners) (less employment credits) . . . . . . . Guaranteed payments to partners . . . . . . . . . . . . . . . . . . . Repairs and maintenance . . . . . . . . . . . . . . . . . . . . . . Bad debts . . . . . . . . . . . . . . . . . . . . . . . . . . . Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxes and licenses . . . . . . . . . . . . . . . . . . . . . . . . Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation (if required, attach Form 4562) . . . . . . 16a Less depreciation reported on Form 1125-A and elsewhere on return 16b Depletion (Do not deduct oil and gas depletion.) . . . . . . . . . . . . . Retirement plans, etc. . . . . . . . . . . . . . . . . . . . . . . . Employee benefit programs . . . . . . . . . . . . . . . . . . . . . Other deductions (attach statement) . . . . . . . . . . . . . . . . . . Total deductions. Add the amounts shown in the far right column for lines 9 through 20 . Ordinary business income (loss). Subtract line 21 from line 8 . . . . . . . . . May the IRS discuss this return with the preparer shown below (see instructions)? Yes No Date Date PTIN Firm's EIN Firm's address For Paperwork Reduction Act Notice, see separate instructions. Check if self- employed Phone no. Cat. No. 11390Z Form 1065 (2012) Form 1065 (2012) Schedule B 1 a c e 2 3 a Page 2 Other Information What type of entity is filing this return? Check the applicable box: Domestic general partnership b Domestic limited partnership Domestic limited liability company d Domestic limited liability partnership Other Foreign partnership f At any time during the tax year, was any partner in the partnership a disregarded entity, a partnership (including an entity treated as a partnership), a trust, an S corporation, an estate (other than an estate of a deceased partner), or a nominee or similar person? . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes No At the end of the tax year: Did any foreign or domestic corporation, partnership (including any entity treated as a partnership), trust, or tax-exempt organization, or any foreign government own, directly or indirectly, an interest of 50% or more in the profit, loss, or capital of the partnership? For rules of constructive ownership, see instructions. If \"Yes,\" attach Schedule B-1, Information on Partners Owning 50% or More of the Partnership . . . . . . . . . . . b Did any individual or estate own, directly or indirectly, an interest of 50% or more in the profit, loss, or capital of the partnership? For rules of constructive ownership, see instructions. If \"Yes,\" attach Schedule B-1, Information on Partners Owning 50% or More of the Partnership . . . . . . . . . . . . . . . . . . . . 4 a At the end of the tax year, did the partnership: Own directly 20% or more, or own, directly or indirectly, 50% or more of the total voting power of all classes of stock entitled to vote of any foreign or domestic corporation? For rules of constructive ownership, see instructions. If \"Yes,\" complete (i) through (iv) below . . . . . . . . . . . . . . . . . . . . . (i) Name of Corporation (ii) Employer Identification Number (if any) (iii) Country of Incorporation (iv) Percentage Owned in Voting Stock b Own directly an interest of 20% or more, or own, directly or indirectly, an interest of 50% or more in the profit, loss, or capital in any foreign or domestic partnership (including an entity treated as a partnership) or in the beneficial interest of a trust? For rules of constructive ownership, see instructions. If \"Yes,\" complete (i) through (v) below . . (i) Name of Entity (ii) Employer Identification Number (if any) (iii) Type of Entity (iv) Country of Organization (v) Maximum Percentage Owned in Profit, Loss, or Capital Yes 5 No Did the partnership file Form 8893, Election of Partnership Level Tax Treatment, or an election statement under section 6231(a)(1)(B)(ii) for partnership-level tax treatment, that is in effect for this tax year? See Form 8893 for more details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Does the partnership satisfy all four of the following conditions? a The partnership's total receipts for the tax year were less than $250,000. b The partnership's total assets at the end of the tax year were less than $1 million. c Schedules K-1 are filed with the return and furnished to the partners on or before the due date (including extensions) for the partnership return. d The partnership is not filing and is not required to file Schedule M-3 . . . . . . . . . . . . . . . If \"Yes,\" the partnership is not required to complete Schedules L, M-1, and M-2; Item F on page 1 of Form 1065; or Item L on Schedule K-1. 7 Is this partnership a publicly traded partnership as defined in section 469(k)(2)? . . . . . . . . . . . . During the tax year, did the partnership have any debt that was cancelled, was forgiven, or had the terms 8 modified so as to reduce the principal amount of the debt? . . . . . . . . . . . . . . . . . . Has this partnership filed, or is it required to file, Form 8918, Material Advisor Disclosure Statement, to provide 9 information on any reportable transaction? . . . . . . . . . . . . . . . . . . . . . . . . 10 At any time during calendar year 2012, did the partnership have an interest in or a signature or other authority over a financial account in a foreign country (such as a bank account, securities account, or other financial account)? See the instructions for exceptions and filing requirements for Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts. If \"Yes,\" enter the name of the foreign country. Form 1065 (2012) Form 1065 (2012) Schedule B Page Yes 11 3 Other Information (continued) No At any time during the tax year, did the partnership receive a distribution from, or was it the grantor of, or transferor to, a foreign trust? If \"Yes,\" the partnership may have to file Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. See instructions . . . . . . . . . 12a Is the partnership making, or had it previously made (and not revoked), a section 754 election? . . . . . . See instructions for details regarding a section 754 election. b Did the partnership make for this tax year an optional basis adjustment under section 743(b) or 734(b)? If \"Yes,\" attach a statement showing the computation and allocation of the basis adjustment. See instructions . . . . c 13 14 15 16 17 Is the partnership required to adjust the basis of partnership assets under section 743(b) or 734(b) because of a substantial built-in loss (as defined under section 743(d)) or substantial basis reduction (as defined under section 734(d))? If \"Yes,\" attach a statement showing the computation and allocation of the basis adjustment. See instructions. Check this box if, during the current or prior tax year, the partnership distributed any property received in a like-kind exchange or contributed such property to another entity (other than disregarded entities wholly-owned by the partnership throughout the tax year) . . . . . . . . . . . . . . . . . At any time during the tax year, did the partnership distribute to any partner a tenancy-in-common or other undivided interest in partnership property? . . . . . . . . . . . . . . . . . . . . . . . . If the partnership is required to file Form 8858, Information Return of U.S. Persons With Respect To Foreign Disregarded Entities, enter the number of Forms 8858 attached. See instructions Does the partnership have any foreign partners? If \"Yes,\" enter the number of Forms 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, filed for this partnership. Enter the number of Forms 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, attached to this return. 18a Did you make any payments in 2012 that would require you to file Form(s) 1099? See instructions . . . . . b If \"Yes,\" did you or will you file required Form(s) 1099? . . . . . . . . . . . . . . . . . . . . Enter the number of Form(s) 5471, Information Return of U.S. Persons With Respect To Certain Foreign 19 Corporations, attached to this return. 20 Enter the number of partners that are foreign governments under section 892. Designation of Tax Matters Partner (see instructions) Enter below the general partner or member-manager designated as the tax matters partner (TMP) for the tax year of this return: Identifying number of TMP Phone number of TMP Name of designated TMP If the TMP is an entity, name of TMP representative Address of designated TMP Form 1065 (2012) Form 1065 (2012) Schedule K 1 2 3a Income (Loss) b c 4 5 6 7 8 9a Alternative Other Information Minimum Tax (AMT) Items Foreign Transactions Credits SelfEmploy- Deductions ment b c 10 11 12 13a b c d 14a b c 15a b c d e f 16a b c d g i l m n 17a b c d e f 18a b c 19a b 20a b c Page Partners' Distributive Share Items 4 Total amount Ordinary business income (loss) (page 1, line 22) . . . . . . . . . . . . . 1 Net rental real estate income (loss) (attach Form 8825) . . . . . . . . . . . 2 Other gross rental income (loss) . . . . . . . . 3a Expenses from other rental activities (attach statement) 3b Other net rental income (loss). Subtract line 3b from line 3a . . . . . . . . . 3c Guaranteed payments . . . . . . . . . . . . . . . . . . . . . 4 Interest income . . . . . . . . . . . . . . . . . . . . . . . . 5 Dividends: 6a a Ordinary dividends . . . . . . . . . . . . . . . . . . . . . . . 6b b Qualified dividends Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Net short-term capital gain (loss) (attach Schedule D (Form 1065)) . . . . . . . 8 Net long-term capital gain (loss) (attach Schedule D (Form 1065)) . . . . . . . 9a Collectibles (28%) gain (loss) . . . . . . . . . 9b Unrecaptured section 1250 gain (attach statement) . . 9c Net section 1231 gain (loss) (attach Form 4797) . . . . . . . . . . . . . 10 Other income (loss) (see instructions) Type 11 Section 179 deduction (attach Form 4562) . . . . . . . . . . . . . . . 12 Contributions . . . . . . . . . . . . . . . . . . . . . . . . 13a Investment interest expense . . . . . . . . . . . . . . . . . . . 13b (1) Type Section 59(e)(2) expenditures: (2) Amount 13c(2) Other deductions (see instructions) Type 13d Net earnings (loss) from self-employment . . . . . . . . . . . . . . . 14a Gross farming or fishing income . . . . . . . . . . . . . . . . . . 14b Gross nonfarm income . . . . . . . . . . . . . . . . . . . . . 14c Low-income housing credit (section 42(j)(5)) . . . . . . . . . . . . . . 15a Low-income housing credit (other) . . . . . . . . . . . . . . . . . 15b Qualified rehabilitation expenditures (rental real estate) (attach Form 3468) . . . . 15c Type 15d Other rental real estate credits (see instructions) Type Other rental credits (see instructions) 15e Other credits (see instructions) Type 15f Name of country or U.S. possession Gross income from all sources . . . . . . . . . . . . . . . . . . . 16b Gross income sourced at partner level . . . . . . . . . . . . . . . . 16c Foreign gross income sourced at partnership level Passive category e General category f Other 16f Deductions allocated and apportioned at partner level Interest expense h Other . . . . . . . . . . 16h Deductions allocated and apportioned at partnership level to foreign source income Passive category j General category k Other 16k . . . . . . . . Total foreign taxes (check one): Paid Accrued 16l Reduction in taxes available for credit (attach statement) . . . . . . . . . . 16m Other foreign tax information (attach statement) . . . . . . . . . . . . . Post-1986 depreciation adjustment . . . . . . . . . . . . . . . . . 17a Adjusted gain or loss . . . . . . . . . . . . . . . . . . . . . . 17b Depletion (other than oil and gas) . . . . . . . . . . . . . . . . . . 17c Oil, gas, and geothermal propertiesgross income . . . . . . . . . . . . 17d Oil, gas, and geothermal propertiesdeductions . . . . . . . . . . . . . 17e Other AMT items (attach statement) . . . . . . . . . . . . . . . . . 17f Tax-exempt interest income . . . . . . . . . . . . . . . . . . . . 18a Other tax-exempt income . . . . . . . . . . . . . . . . . . . . 18b Nondeductible expenses . . . . . . . . . . . . . . . . . . . . . 18c Distributions of cash and marketable securities . . . . . . . . . . . . . 19a Distributions of other property . . . . . . . . . . . . . . . . . . . 19b Investment income . . . . . . . . . . . . . . . . . . . . . . . 20a Investment expenses . . . . . . . . . . . . . . . . . . . . . . 20b Other items and amounts (attach statement) . . . . . . . . . . . . . . Form 1065 (2012) Form 1065 (2012) Page 5 Analysis of Net Income (Loss) Net income (loss). Combine Schedule K, lines 1 through 11. From the result, subtract the sum of Schedule K, lines 12 through 13d, and 16l . . . . . . . . . . . . . . . . . . 1 Analysis by (ii) Individual (iii) Individual (v) Exempt (i) Corporate (iv) Partnership (active) (passive) organization partner type: 1 2 (vi) Nominee/Other a General partners b Limited partners Schedule L 1 2a b 3 4 5 6 7a b 8 9a b 10a b 11 12a b 13 14 15 16 17 18 19a b 20 21 22 Assets Cash . . . . . . . . . . . . . Trade notes and accounts receivable . . . Less allowance for bad debts . . . . . Inventories . . . . . . . . . . . U.S. government obligations . . . . . Tax-exempt securities . . . . . . . Other current assets (attach statement) . . Loans to partners (or persons related to partners) Mortgage and real estate loans . . . . Other investments (attach statement) . . . Buildings and other depreciable assets . . Less accumulated depreciation . . . . Depletable assets . . . . . . . . . Less accumulated depletion . . . . . Land (net of any amortization) . . . . . Intangible assets (amortizable only) . . . Less accumulated amortization . . . . Other assets (attach statement) . . . . Total assets . . . . . . . . . . . Liabilities and Capital Accounts payable . . . . . . . . . Other current liabilities (attach statement) All nonrecourse loans . . . . . . . Other liabilities (attach statement) . Partners' capital accounts . . . Total liabilities and capital . . . . . . (d) . . . . . . . . Reconciliation of Income (Loss) per Books With Income (Loss) per Return Note. Schedule M-3 may be required instead of Schedule M-1 (see instructions). Net income (loss) per books . . . . Income recorded on books this year not included 6 Income included on Schedule K, lines 1, 2, 3c, 5, 6a, 7, 8, 9a, 10, and 11, not recorded on books this year (itemize): 3 Guaranteed payments (other than health insurance) . . . . . . . 4 Expenses recorded on books this year not included on Schedule K, lines 1 through 13d, and 16l (itemize): a Depreciation $ b Travel and entertainment $ 5 Add lines 1 through 4 . . . Schedule M-2 3 4 5 End of tax year (c) Loans from partners (or persons related to partners) Mortgages, notes, bonds payable in 1 year or more 2 1 2 Beginning of tax year (a) (b) Mortgages, notes, bonds payable in less than 1 year Schedule M-1 1 Balance Sheets per Books . . on Schedule K, lines 1 through 11 (itemize): a Tax-exempt interest $ a Deductions included on Schedule K, lines 1 through 13d, and 16l, not charged against book income this year (itemize): Depreciation $ 7 8 9 Add lines 6 and 7 . . . . . . . . Income (loss) (Analysis of Net Income (Loss), line 1). Subtract line 8 from line 5 . 6 Distributions: a Cash . . b Property . Other decreases (itemize): . . . . . . . . Add lines 6 and 7 . . . . . . Analysis of Partners' Capital Accounts Balance at beginning of year . Capital contributed: a Cash . b Property Net income (loss) per books . . Other increases (itemize): Add lines 1 through 4 . . . . . . . . . . . . . . 7 8 9 . . . Balance at end of year. Subtract line 8 from line 5 Form 1065 (2012) Form 1125-A (Rev. December 2012) Department of the Treasury Internal Revenue Service Name Cost of Goods Sold Employer identification number 1 2 Inventory at beginning of year Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 3 4 5 Cost of labor . . . . . . . . . . . Additional section 263A costs (attach schedule) . Other costs (attach schedule) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4 5 6 7 Total. Add lines 1 through 5 . Inventory at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 7 8 Cost of goods sold. Subtract line 7 from line 6. Enter here and on Form 1120, page 1, line 2 or the appropriate line of your tax return (see instructions) . . . . . . . . . . . . . . . Check all methods used for valuing closing inventory: (i) Cost 9a OMB No. 1545-2225 Attach to Form 1120, 1120-C, 1120-F, 1120S, 1065, or 1065-B. Information about Form 1125-A and its instructions is at www.irs.gov/form1125a. . . . . . . . . . . . . . . . . . . . . . . 8 b Lower of cost or market (ii) Other (Specify method used and attach explanation.) (iii) Check if there was a writedown of subnormal goods . . . . . . . . . . c Check if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) . . . . . . d If the LIFO inventory method was used for this tax year, enter amount of closing inventory computed under LIFO . . . . . . . . . . . . . . . . . . . . . . . . . . . 9d If property is produced or acquired for resale, do the rules of section 263A apply to the entity (see instructions)? . . e f . . . . . . . . . . . . Was there any change in determining quantities, cost, or valuations between opening and closing inventory? If \"Yes,\" attach explanation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section references are to the Internal Revenue Code unless otherwise noted. General Instructions Purpose of Form Use Form 1125-A to calculate and deduct cost of goods sold for certain entities. Who Must File Filers of Form 1120, 1120-C, 1120-F, 1120S, 1065, or 1065-B, must complete and attach Form 1125-A if the applicable entity reports a deduction for cost of goods sold. Inventories Generally, inventories are required at the beginning and end of each tax year if the production, purchase, or sale of merchandise is an income-producing factor. See Regulations section 1.471-1. If inventories are required, you generally must use an accrual method of accounting for sales and purchases of inventory items. Exception for certain taxpayers. If you are a qualifying taxpayer or a qualifying small business taxpayer (defined below), you can adopt or change your accounting method to account for inventoriable items in the same manner as materials and supplies that are not incidental. Under this accounting method, inventory costs for raw materials purchased for use in producing finished goods and merchandise purchased for resale are deductible in the year the finished goods or merchandise are sold (but not before the year you paid for the raw materials or merchandise, if you are also using the cash method). If you account for inventoriable items in the same manner as materials and supplies that are not incidental, you can currently deduct expenditures for direct labor and all indirect costs that would otherwise be included in inventory costs. See the instructions for lines 2 and 7. For additional guidance on this method of accounting, see Pub. 538, Accounting Periods and Methods. For guidance on adopting or changing to this method of accounting, see Form 3115, Application for Change in Accounting Method, and its instructions. Qualifying taxpayer. A qualifying taxpayer is a taxpayer that, (a) for each prior tax year ending after December 16, 1998, has average annual gross receipts of $1 million or less for the 3 prior tax years and (b) its business is not a tax shelter (as defined in section 448(d)(3)). See Rev. Proc. 2001-10, 2001-2 I.R.B. 272. Qualifying small business taxpayer. A qualifying small business taxpayer is a taxpayer that, (a) for each prior tax year For Paperwork Reduction Act Notice, see instructions. Cat. No. 55988R Yes No Yes No ending on or after December 31, 2000, has average annual gross receipts of $10 million or less for the 3 prior tax years, (b) whose principal business activity is not an ineligible activity, and (c) whose business is not a tax shelter (as defined in section 448 (d)(3)). See Rev. Proc. 2002-28, 2002-18 I.R.B. 815. Uniform capitalization rules. The uniform capitalization rules of section 263A generally require you to capitalize, or include in inventory, certain costs incurred in connection with the following. The production of real property and tangible personal property held in inventory or held for sale in the ordinary course of business. Real property or personal property (tangible and intangible) acquired for resale. The production of real property and tangible personal property by a corporation for use in its trade or business or in an activity engaged in for profit. See the discussion on section 263A uniform capitalization rules in the instructions for your tax return before completing Form 1125-A. Also see Regulations sections 1.263A-1 through 1.263A-3. See Regulations section 1.263A-4 for rules for property produced in a farming business. Form 1125-A (Rev. 12-2012) Form 1125-A (Rev. 12-2012) Specific Instructions Line 1. Inventory at Beginning of Year If you are changing your method of accounting for the current tax year, you must refigure last year's closing inventory using the new method of accounting. Enter the result on line 1. If there is a difference between last year's closing inventory and the refigured amount, attach an explanation and take it into account when figuring any section 481(a) adjustment. Line 2. Purchases If you account for inventoriable items in the same manner as materials and supplies that are not incidental, enter amounts paid for all raw materials and merchandise during the tax year on line 2. The amount you can deduct for the tax year is figured on line 8. Reduce purchases by items withdrawn for personal use. For a partnership, the cost of these items should be shown on Schedule K and Schedule K-1 as distributions to partners. Line 4. Additional Section 263A Costs If you elected a simplified method of accounting, enter on line 4 the balance of section 263A costs paid or incurred during the tax year not includible on lines 2, 3, and 5. If you elected the simplified production method, additional section 263A costs are generally those costs, other than interest, that were not capitalized under your method of accounting immediately prior to the effective date of section 263A, but are now required to be capitalized under section 263A. For details, see Regulations section 1.263A-2(b). If you elected the simplified resale method, additional section 263A costs are generally those costs incurred with respect to the following categories. Off-site storage or warehousing. Purchasing. Handling, such as processing, assembling, repackaging, and transporting. General and administrative costs (mixed service costs). Line 5. Other Costs Enter on line 5 any costs paid or incurred during the tax year not entered on lines 2 through 4. Attach a statement listing details of the costs. Special Rules for Cooperatives Cooperatives are allowed to deduct certain per-unit retain allocations. Include these costs on line 5. Attach a statement listing details of per-unit retain allocations paid in: Qualified per-unit retain certificates, Money or other property (except nonqualified per-unit certificates), and Nonqualified per-unit retain certificates redeemed this year. Page Per-unit retain allocations. A cooperative is allowed to deduct from its taxable income amounts paid during the payment period for the tax year as per-unit retain allocations to the extent paid in money, qualified per-unit retain certificates or other property with respect to marketing occurring during such tax year. A per-unit retain allocation is any allocation from a cooperative to a patron with respect to products marketed for him without reference to the cooperative net earnings. A qualified per-unit retain certificate is any per-unit retain certificate that the distributee has agreed to take into account at its stated dollar amount. Nonqualified per-unit retain certificates redeemed this year. Include the amount paid in money or other property (except amounts already included as per-unit retain certificates) to patrons to redeem nonqualified per-unit retain certificates. No deduction is allowed at the time of issuance for a nonqualified per-unit retain certificate. However, the cooperative may take a deduction in the year the certificate is redeemed, subject to the stated dollar amount of the certificate. See section 1383. Also see the instructions for line 29h of Form 1120-C, U.S. Income Tax Return for Cooperative Associations, for a special rule for figuring the cooperative's tax in the year of redemption of a nonqualified per-unit retain certificate. Line 7. Inventory at End of Year See Regulations sections 1.263A-1 through 1.263A-3 for details on figuring the amount of additional section 263A costs to be included in ending inventory. If you account for inventoriable items in the same manner as materials and supplies that are not incidental, enter on line 7 the portion of your raw materials and merchandise purchased for resale that was included in the total on line 6 but was not sold during the year. Line 8. Cost of Goods Sold Enter the amount from line 8 on your tax return as follows. Filers of Form 1120, 1120-C, 1120S, 1065, and 1065-B, enter cost of goods sold on page 1, line 2. Filers of Form 1120-F, enter cost of goods sold on page 3, Section II, line 2. Lines 9a Through 9f. Inventory Valuation Methods Inventories can be valued at: Cost, Cost or market value (whichever is lower), or Any other method approved by the IRS that conforms to the requirements of the applicable regulations cited below. However, if you are using the cash method of accounting, you are required to use cost. Rolling average method. Generally, a rolling average method that is used to value inventories for financial accounting purposes does not clearly reflect income for federal income tax purposes. 2 However, if a filer uses the average cost method for financial accounting purposes, there are safe harbors under which this method will be deemed to clearly reflect income for federal income tax purposes. For details, see Rev. Proc. 2008-43, 2008-30 I.R.B. 186 as modified by Rev. Proc. 2008-52, 2008-36 I.R.B. 587, as modified by Rev. Proc. 2011-14, 2011-4 I.R.B. 330, or a successor. Filers that use erroneous valuation methods must change to a method permitted for federal income tax purposes. Use Form 3115 to make this change. For more information on inventory valuation methods, see Pub. 538. For more information on changes in the method of accounting for inventory, see Form 3115 and the Instructions for Form 3115. Line 9a. Method of valuing closing inventory. On line 9a, check the method(s) used for valuing inventories. Under lower of cost or market, the term \"market\" (for normal goods) means the current bid price prevailing on the inventory valuation date for the particular merchandise in the volume usually purchased by the filer. For a manufacturer, market applies to the basic elements of costraw materials, labor, and burden. If section 263A applies, the basic elements of cost must reflect the current bid price of all direct costs and all indirect costs properly allocable to goods on hand at the inventory date. Inventory may be valued below cost when the merchandise is unsalable at normal prices or unusable in the normal way because the goods are subnormal due to damage, imperfections, shopwear, change of style, odd or broken lots, or other similar causes, including secondhand goods taken in exchange. The goods may be valued at the bona fide selling price, minus the direct cost of disposition (but not less than scrap value). Bona fide selling price means actual offering of goods during a period ending not later than 30 days after inventory date. Lines 9c and 9d. LIFO method. If this is the first year the Last-in, First-out, (LIFO) inventory method was either adopted or extended to inventory goods not previously valued under the LIFO method provided in section 472, attach Form 970, Application To Use LIFO Inventory Method, or a statement with the information required by Form 970. Check the LIFO box on line 9c. On line 9d, enter the amount of total closing inventories computed under section 472. Estimates are acceptable. If you changed or extended your inventory method to LIFO and had to write up the opening inventory to cost in the year of election, report the effect of the write-up as other income, on your applicable return, proportionately over a 3-year period that begins with the year of the LIFO election. Form 1125-A (Rev. 12-2012) Note. Entities using the LIFO method that make an S corporation election or transfer LIFO inventory to an S corporation in a nonrecognition transaction may be subject to an additional tax attributable to the LIFO recapture amount. See the instructions for Form 1120, Schedule J, line 11. Line 9e. If property is produced or acquired for resale and the rules of section 263A apply to the corporation, cooperative, partnership, or other applicable entity, check the "Yes" box on line 9e. Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. Page You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax. You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103. 3 The time needed to complete and file this form will vary depending on individual circumstances. The estimated average time is: Recordkeeping . . . . 4 hr., 18 min. Learning about the law or the form . . . . 1 hr., 33 min. Preparing and sending the form to the IRS . . . . . . 2 hr., 53 min. If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. See the instructions for the tax return with which this form is filed. Form 8949 Department of the Treasury Internal Revenue Service Sales and Other Dispositions of Capital Assets Information about Form 8949 and its separate instructions is at www.irs.gov/form8949. File with your Schedule D to list your transactions for lines 1, 2, 3, 8, 9, and 10 of Schedule D. OMB No. 1545-0074 2012 Attachment Sequence No. 12A Social security number or taxpayer identification number Name(s) shown on return Most brokers issue their own substitute statement instead of using Form 1099-B. They also may provide basis information (usually your cost) to you on the statement even if it is not reported to the IRS. Before you check Box A, B, or C below, determine whether you received any statement(s) and, if so, the transactions for which basis was reported to the IRS. Brokers are required to report basis to the IRS for most stock you bought in 2011 or later. Part I Short-Term. Transactions involving capital assets you held one year or less are short term. For long-term transactions, see page 2. You must check Box A, B, or C below. Check only one box. If more than one box applies for your short-term transactions, complete a separate Form 8949, page 1, for each applicable box. If you have more short-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need. (A) Short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (B) Short-term transactions reported on Form(s) 1099-B showing basis was not reported to the IRS (C) Short-term transactions not reported to you on Form 1099-B 1 (a) Description of property (Example: 100 sh. XYZ Co.) (b) Date acquired (Mo., day, yr.) (c) Date sold or disposed (Mo., day, yr.) (d) Proceeds (sales price) (see instructions) Adjustment, if any, to gain or loss. If you enter an amount in column (g), (e) (h) enter a code in column (f). Cost or other basis. Gain or (loss). See the separate instructions. See the Note below Subtract column (e) and see Column (e) from column (d) and (f) (g) in the separate combine the result Code(s) from instructions with column (g) Amount of instructions adjustment 2 Totals. Add the amounts in columns (d), (e), (g), and (h) (subtract negative amounts). Enter each total here and include on your Schedule D, line 1 (if Box A above is checked), line 2 (if Box B above is checked), or line 3 (if Box C above is checked) . Note. If you checked Box A above but the basis reported to the IRS was incorrect, enter in column (e) the basis as reported to the IRS, and enter an adjustment in column (g) to correct the basis. See Column (g) in the separate instructions for how to figure the amount of the adjustment. For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 37768Z Form 8949 (2012) Attachment Sequence No. 12A Form 8949 (2012) Name(s) shown on return. (Name and SSN or taxpayer identification no. not required if shown on other side.) Page 2 Social security number or taxpayer identification number Most brokers issue their own substitute statement instead of using Form 1099-B. They also may provide basis information (usually your cost) to you on the statement even if it is not reported to the IRS. Before you check Box A, B, or C below, determine whether you received any statement(s) and, if so, the transactions for which basis was reported to the IRS. Brokers are required to report basis to the IRS for most stock you bought in 2011 or later. Part II Long-Term. Transactions involving capital assets you held more than one year are long term. For short-term transactions, see page 1. You must check Box A, B, or C below. Check only one box. If more than one box applies for your long-term transactions, complete a separate Form 8949, page 2, for each applicable box. If you have more long-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need. (A) Long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (B) Long-term transactions reported on Form(s) 1099-B showing basis was not reported to the IRS (C) Long-term transactions not reported to you on Form 1099-B 3 (a) Description of property (Example: 100 sh. XYZ Co.) (b) Date acquired (Mo., day, yr.) (c) Date sold or disposed (Mo., day, yr.) (d) Proceeds (sales price) (see instructions) Adjustment, if any, to gain or loss. If you enter an amount in column (g), (e) (h) enter a code in column (f). Cost or other basis. Gain or (loss). See the separate instructions. See the Note below Subtract column (e) and see Column (e) from column (d) and (f) (g) in the separate combine the result Code(s) from instructions with column (g) Amount of instructions adjustment 4 Totals. Add the amounts in columns (d), (e), (g), and (h) (subtract negative amounts). Enter each total here and include on your Schedule D, line 8 (if Box A above is checked), line 9 (if Box B above is checked), or line 10 (if Box C above is checked) Note. If you checked Box A above but the basis reported to the IRS was incorrect, enter in column (e) the basis as reported to the IRS, and enter an adjustment in column (g) to correct the basis. See Column (g) in the separate instructions for how to figure the amount of the adjustment. Form 8949 (2012) SCHEDULE D (Form 1065) Capital Gains and Losses OMB No. 1545-0099 Attach to Form 1065 or Form 8865. Use Form 8949 to list your transactions for lines 1, 2, 3, 8, 9, and 10. Department of the Treasury Information about Schedule D (Form 1065) and its separate instructions is at www.irs.gov/form1065. Internal Revenue Service Employer identification number Name of partnership Part I 2012 Short-Term Capital Gains and LossesAssets Held One Year or Less Complete Form 8949 before completing line 1, 2, or 3. This form may be easier to complete if you round off cents to whole dollars. (d) Proceeds (sales price) from Form(s) 8949, Part I, line 2, column (d) (e) Cost or other basis from Form(s) 8949, Part I, line 2, column (e) (g) Adjustments to gain or loss from Form(s) 8949, Part I, line 2, column (g) (h) Gain or (loss). Subtract column (e) from column (d) and combine the result with column (g) 1 Short-term totals from all Forms 8949 with box A checked in Part I 2 Short-term totals from all Forms 8949 with box B checked in Part I 3 Short-term totals from all Forms 8949 with box C checked in Part I 4 Short-term capital gain from installment sales from Form 6252, line 26 or 37 . . . . . . . 4 5 Short-term capital gain or (loss) from like-kind exchanges from Form 8824 . . . . . . 5 . 6 Partnership's share of net short-term capital gain (loss), including specially allocated short-term capital gains (losses), from other partnerships, estates, and trusts . . . . . . . . . . 6 7 Net short-term capital gain or (loss). Combine lines 1 through 6 in column (h). Enter here and on Form 1065, Schedule K, line 8 or 11; or Form 8865, Schedule K, line 8 or 11 . . . . . . 7 Part II Long-Term Capital Gains and LossesAssets Held More Than One Year Complete Form 8949 before completing line 8, 9, or 10. This form may be easier to complete if you round off cents to whole dollars. (d) Proceeds (sales price) from Form(s) 8949, Part II, line 4, column (d) (h) Gain or (loss). Subtract (g) Adjustments to gain or column (e) from loss from Form(s) 8949, Part and combine thecolumn (d) result with II, line 4, column (g) column (g) (e) Cost or other basis from Form(s) 8949, Part II, line 4, column (e) 8 Long-term totals from all Forms 8949 with box A checked in Part II 9 Long-term totals from all Forms 8949 with box B checked in Part II 10 Long-term totals from all Forms 8949 with box C checked in Part II 11 Long-term capital gain from installment sales from Form 6252, line 26 or 37 . . . . . . . 11 12 Long-term capital gain or (loss) from like-kind exchanges from Form 8824 . . . . . . 12 . 13 Partnership's share of net long-term capital gain (loss), including specially allocated long-term capital gains (losses), from other partnerships, estates, and trusts . . . . . . . . . . 13 14 Capital gain distributions (see instructions) . 14 . . . . . . . . . . . . . . . . . 15 Net long-term capital gain or (loss). Combine lines 8 through 14 in column (h). Enter here and on Form 1065, Schedule K, line 9a or 11; or Form 8865, Schedule K, line 9a or 11 . . . . . For Paperwork Reduction Act Notice, see the Instructions for Form 1065. Cat. No. 11393G 15 Schedule D (Form 1065) 2012 651112 Final K-1 2012 Schedule K-1 (Form 1065) Department of the Treasury Internal Revenue Service Part III Partner's Share of Current Year Income, Deductions, Credits, and Other Items For calendar year 2012, or tax year beginning ending B C D F Information About the Partnership IRS Center where partnership filed return Check if this is a publicly traded partnership (PTP) Information About the Partner H Domestic partner Foreign partner I1 What type of entity is this partner? (see instructions) I2 If this partner is a retirement plan (IRA/SEP/Keogh/etc.), check here (see instructions) . . . . . . . . . . . . . . Partner's share of profit, loss, and capital (see instructions): Beginning Ending Profit % % Loss % % Capital % % 4 Guaranteed payments 5 Interest income 6a Ordinary dividends 6b Qualified dividends 16 Foreign transactions 7 Royalties 8 Net short-term capital gain (loss) 9a Net long-term capital gain (loss) 17 Alternative minimum tax (AMT) items 9b Collectibles (28%) gain (loss) 9c Unrecaptured section 1250 gain 10 Net section 1231 gain (loss) 18 Tax-exempt income and nondeductible expenses 11 Other income (loss) 12 19 Distributions Section 179 deduction 13 Other deductions 20 Other information Partner's share of liabilities at year end: Nonrecourse . . . . . . . $ Recourse . $ . $ . . . . . . 14 $ Qualified nonrecourse financing . Capital contributed during the year $ Current year increase (decrease) . $ Withdrawals & distributions . . $ ( . . $ Ending capital account . Tax basis . GAAP Self-employment earnings (loss) *See attached statement for additional information. Partner's capital account analysis: Beginning capital account . ) Section 704(b) book Other (explain) M Other net rental income (loss) Partner's name, address, city, state, and ZIP code Limited partner or other LLC member L 3 Partner's identifying number General partner or LLC member-manager K Net rental real estate income (loss) Credits Partnership's name, address, city, state, and ZIP code G J 2 15 Partnership's employer identification number Part II E Ordinary business income (loss) For IRS Use Only A 1 , 2012 , 20 Partner's Share of Income, Deductions, See back of form and separate instructions. Credits, etc. Part I OMB No. 1545-0099 Amended K-1 Did the partner contribute property with a built-in gain or loss? Yes No If \"Yes,\" attach statement (see instructions) For Paperwork Reduction Act Notice, see Instructions for Form 1065. IRS.gov/form1065 Cat. No. 11394R Schedule K-1 (Form 1065) 2012 Schedule K-1 (Form 1065) 2012 Page This list identifies the codes used on Schedule K-1 for all partners and provides summarized reporting information for partners who file Form 1040. For detailed reporting and filing information, see the separate Partner's Instructions for Schedule K-1 and the instructions for your income tax return. 1. Ordinary business income (loss). Determine whether the income (loss) is passive or nonpassive and enter on your return as follows. Report on See the Partner's Instructions Passive loss Passive income Schedule E, line 28, column (g) Nonpassive loss Schedule E, line 28, column (h) Nonpassive income Schedule E, line 28, column (j) 2. Net rental real estate income (loss) See the Partner's Instructions 3. Other net rental income (loss) Net income Schedule E, line 28, column (g) Net loss See the Partner's Instructions 4. Guaranteed payments Schedule E, line 28, column (j) 5. Interest income Form 1040, line 8a 6a. Ordinary dividends Form 1040, line 9a 6b. Qualified dividends Form 1040, line 9b Schedule E, line 4 7. Royalties 8. Net short-term capital gain (loss) Schedule D, line 5 Schedule D, line 12 9a. Net long-term capital gain (loss) 9b. Collectibles (28%) gain (loss) 28% Rate Gain Worksheet, line 4 (Schedule D instructions) 9c. Unrecaptured section 1250 gain See the Partner's Instructions 10. Net section 1231 gain (loss) See the Partner's Instructions 11. Other income (loss) Code A Other portfolio income (loss) See the Partner's Instructions B Involuntary conversions See the Partner's Instructions C Sec. 1256 contracts & straddles Form 6781, line 1 D Mining exploration costs recapture See Pub. 535 E Cancellation of debt Form 1040, line 21 or Form 982 F Other income (loss) See the Partner's Instructions 12. Section 179 deduction See the Partner's Instructions 13. Other deductions A Cash contributions (50%) B Cash contributions (30%) C Noncash contributions (50%) D Noncash contributions (30%) See the Partner's E Capital gain property to a 50% Instructions organization (30%) F Capital gain property (20%) G Contributions (100%) H Investment interest expense Form 4952, line 1 I Deductionsroyalty income Schedule E, line 19 J Section 59(e)(2) expenditures See the Partner's Instructions K Deductionsportfolio (2% floor) Schedule A, line 23 L Deductionsportfolio (other) Schedule A, line 28 M Amounts paid for medical insurance Schedule A, line 1 or Form 1040, line 29 N Educational assistance benefits See the Partner's Instructions O Dependent care benefits Form 2441, line 12 P Preproductive period expenses See the Partner's Instructions Q Commercial revitalization deduction See Form 8582 instructions from rental real estate activities R Pensions and IRAs See the Partner's Instructions S Reforestation expense deduction See the Partner's Instructions T Domestic production activities See Form 8903 instructions information U Qualified production activities income Form 8903, line 7b V Employer's Form W-2 wages Form 8903, line 17 W Other deductions See the Partner's Instructions 14. Self-employment earnings (loss) Note. If you have a section 179 deduction or any partner-level deductions, see the Partner's Instructions before completing Schedule SE. A Net earnings (loss) from Schedule SE, Section A or B self-employment B Gross farming or fishing income See the Partner's Instructions C Gross non-farm income See the Partner's Instructions 15. Credits A Low-income housing credit (section 42(j)(5)) from pre-2008 buildings B Low-income housing credit (other) from pre-2008 buildings C Low-income housing credit (section 42(j)(5)) from See the Partner's Instructions post-2007 buildings D Low-income housing credit (other) from post-2007 buildings E Qualified rehabilitation expenditures (rental real estate) F Other rental real estate credits G Other rental credits H Undistributed capital gains credit Form 1040, line 71; check box a I Alcohol and cellulosic biofuel fuels See the Partner's Instructions credit } } 16. } Report on Code J Work opportunity credit K Disabled access credit L Empowerment zone and renewal community employment credit M Credit for increasing research See the Partner's Instructions activities N Credit for employer social security and Medicare taxes O Backup withholding P Other credits Foreign transactions A Name of country or U.S. possession B Gross income from all sources Form 1116, Part I C Gross income sourced at partner level Foreign gross income sourced at partnership level D Passive category E General category Form 1116, Part I F Other Deductions allocated and apportioned at partner level Form 1116, Part I G Interest expense H Other Form 1116, Part I Deductions allocated and apportioned at partnership level to foreign source income I Passive category J General category Form 1116, Part I K Other Other information L Total foreign taxes paid Form 1116, Part II M Total foreign taxes accrued Form 1116, Part II N Reduction in taxes available for credit Form 1116, line 12 Form 8873 O Foreign trading gross receipts P Extraterritorial income exclusion Form 8873 Q Other foreign transactions See the Partner's Instructions Alternative minimum tax (AMT) items A Post-1986 depreciation adjustment See the Partner's B Adjusted gain or loss C Depletion (other than oil & gas) Instructions and D Oil, gas, & geothermalgross income the Instructions for E Oil, gas, & geothermaldeductions Form 6251 F Other AMT items Tax-exempt income and nondeductible expenses A Tax-exempt interest income Form 1040, line 8b B Other tax-exempt income See the Partner's Instructions C Nondeductible expenses See the Partner's Instructions Distributions A Cash and marketable securities B Distribution subject to section 737 See the Partner's Instructions C Other property Other information A Investment income Form 4952, line 4a B Investment expenses Form 4952, line 5 Form 4136 C Fuel tax credit information D Qualified rehabilitation expenditures See the Partner's Instructions (other than rental real estate) E Basis of energy property See the Partner's Instructions F Recapture of low-income housing Form 8611, line 8 credit (section 42(j)(5)) G Recapture of low-income housing Form 8611, line 8 credit (other) H Recapture of investment credit See Form 4255 I Recapture of other credits See the Partner's Instructions J Look-back interestcompleted See Form 8697 long-term contracts K Look-back interestincome forecast See Form 8866 } } } 17. 18. 19. 20. } } method L Dispositions of property with section 179 deductions M Recapture of section 179 deduction N Interest expense for corporate partners O Section 453(l)(3) information P Section 453A(c) information Q Section 1260(b) information R Interest allocable to production expenditures S CCF nonqualified withdrawals T Depletion informationoil and gas U Amortization of reforestation costs V Unrelated business taxable income W Precontribution gain (loss) X Section 108(i) information Y Other information } See the Partner's Instructions 2 ACCT 346 Tax Return Information- Part 1 (C Corporation) Fall 2013 Overview The case study consists of four parts, each with its own set of requirements. Each part builds on the information developed in the preceding parts: Part 1 presents financial information for a C corporation that must be used to prepare a basic Form 1120. Part 2 presents financial information for a partnership that is substantially identical to the info