ACCT 613 Fall semester 2010 Entity Tax Case The Rite-Way Plumbing Co. began business March 1, 2006 in Sarasota. Its business address is 124 Division Lane, Sarasota, FL 33645. Its employer identification number is 69-3456789. Its principal business activity is plumbing installation and repair and its business code number is 238220. It files its income tax returns on the calendar-year basis. The business was formed as a limited partnership by two brothers, John Henry (SSN 555-55-5555) and James Henry (SSN 666-66-6666), who work full-time in the business, and their father Tom Henry (SSN 888-88-8888), the limited partner. The brothers each have a 25% interest in the income, loss, and capital of the business while their father owns a 50% interest in income, loss, and capital, but takes no active interest in the business other than as that of an investor. At the end of 2009, its operations showed cash gross receipts of $1,240,000 and the following cash expenditure items: Salaries and wages (excluding John and James) $378,000 Repairs and Maintenance 2,000 Rent 28,000 Taxes and Licenses 38,000 Advertising 3,000 Pension Plans (excluding John and James) 15,000 Health/Dental Insurance 16,000 Material Purchases 220,000 Truck Expense 45,000 Insurance (excluding health/dental) 65,000 Legal/Professional Fees 3,000 Office Expenses 6,000 Utilities/Telephone 8,000 Meals/Entertainment 4,000 Draw ? John 75,000 Draw ? James 60,000 Total Cash Expenditures $966,000 John and James each receive a guaranteed payment of $75,000 in addition to the payment of their health and dental insurance premiums, which were $3,000 each. The other insurance payments include the $1,500 premiums for $200,000 term life insurance policies each on John and James that name the partnership as beneficiary. Although the company maintains a certain level of plumbing supplies for its business inventory is not a material income producing factor; thus, material purchases are expenses. The partnership uses the cash method of accounting for revenue and expenses. The company purchased the following items for use solely in the business during 2009: a new truck (weighing over 6,000 pounds) bought on June 21 that cost $21,250; a new computer system bought on August 17 costing $3,200; additional new office furniture bought on December 4 costing $2,500. At the beginning of 2009, the company owned the following items that were all purchased the month the company began business. In that year, the company did not elect bonus depreciation or Section 179 expensing for any of its truck, equipment, or furniture purchases: Asset Cost basis Trucks $78,000 Plumbing equipment (7 year property) 23,000 Office furniture 16,000 Computer system 4,000 On March 12, 2009, it sold one of its old trucks for $6,000 that had originally cost $17,000. It also was able to sell its old computer system on September 12, 2009 for $250. It donated two pieces of its old office furniture to Goodwill Industries. This furniture had cost $1,500 and had a current value of $600. REQUIRED Using the 2009 fill-in forms (ATTACHED) prepare pages 1, 2, and 3 of Form 1065 (you are not required to complete Schedules L, M-1, or M-2) for the Rite-Way Plumbing Co. along with the Schedule K-1s for each of the three partners and any other required forms. The partnership wants to maximize its cost recovery deductions for tax purposes.

Certain 2010 Cash Contributions for Haiti Relief Can Be Deducted As If Made on December 31, 2009 A new law allows the option of treating certain charitable contributions of money made after January 11, 2010, and before March 1, 2010, for the relief of victims in areas affected by the January 12, 2010, earthquake in Haiti as if they were made on December 31, 2009. Contributions of money include contributions made by cash, check, money order, credit card, charge card, debit card, or via cell phone. The new law was enacted after the 2009 forms, instructions, and publications had already been printed, so this alert is being added to the electronic version of certain impacted products. The contribution must be made to a qualified organization and meet all other requirements for charitable contribution deductions. However, if the contribution was made by phone or text message, a telephone bill showing the name of the donee organization, the date of the contribution, and the amount of the contribution will satisfy the recordkeeping requirement. Therefore, for example, for a $10 charitable contribution made by text message that was charged to a telephone or wireless account, a telecommunications company bill containing this information satisfies the recordkeeping requirement. Form 1065 Department of the Treasury Internal Revenue Service U.S. Return of Partnership Income For calendar year 2009, or tax year beginning A Principal business activity Use the IRS B Principal product or service label. Otherwise, C Business code number print or type. OMB No. 1545-0099 , 2009, ending , 20 2009 . See separate instructions. 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 (1) (6) Check accounting method: (1) I J Check if Schedules C and M-3 are attached Check applicable boxes: (2) Initial return (3) Final return Name change (4) Technical termination - also check (1) or (2) (2) (3) Cash Accrual (5) Address change Amended return Other (specify) Number of Schedules K-1. Attach one for each person who was a partner at any time during the tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16a b 17 18 19 20 21 22 Sign Here Paid Preparer's Use Only 1a Gross receipts or sales . . . . . . . . . . . . 1b Less returns and allowances . . . . . . . . . . . Cost of goods sold (Schedule A, line 8) . . . . . . . . . . . . . . . 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16a Depreciation (if required, attach Form 4562) . . . . . . Less depreciation reported on Schedule 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 . . . . . . . . . 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. May the IRS discuss this return with the preparer shown below (see instructions)? Yes Signature of general partner or limited liability company member manager Date Preparer's signature Preparer's SSN or PTIN Check if self- employed Firm's name (or yours if self-employed), address, and ZIP code For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. No Date EIN Phone no. Cat. No. 11390Z Form 1065 (2009) Form 1065 (2009) Schedule A 1 2 3 4 5 6 7 8 9a b c d e Inventory at beginning of year . . . . . . . . . . . . . . . . Purchases less cost of items withdrawn for personal use . . . . . . . Cost of labor . . . . . . . . . . . . . . . . . . . . . Additional section 263A costs (attach statement) . . . . . . . . . . Other costs (attach statement) . . . . . . . . . . . . . . . Total. Add lines 1 through 5 . . . . . . . . . . . . . . . . Inventory at end of year ................. Cost of goods sold. Subtract line 7 from line 6. Enter here and on page 1, line 2 Check all methods used for valuing closing inventory: (i) Cost as described in Regulations section 1.471-3 (ii) Lower of cost or market as described in Regulations section 1.471-4 Other (specify method used and attach explanation) (iii) a c e 2 3 a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1 2 3 4 5 6 7 8 Check this box if there was a writedown of \"subnormal\" goods as described in Regulations section 1.471-2(c) . . Check this box if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) . Do the rules of section 263A (for property produced or acquired for resale) apply to the partnership? . . . . Was there any change in determining quantities, cost, or valuations between opening and closing inventory? . . If \"Yes,\" attach explanation. Schedule B 1 Page Cost of Goods Sold (see the instructions) . . Yes No Yes No Other Information What type of entity is filing this return? Check the applicable box: b Domestic general partnership Domestic limited partnership d Domestic limited liability partnership Domestic limited liability company Other f Foreign partnership 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 taxexempt organization 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 Form 1065 (2009) Form 1065 (2009) Page Yes 5 3 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 2009, 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. 11 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 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. Designation of Tax Matters Partner (see instructions) Enter below the general partner designated as the tax matters partner (TMP) for the tax year of this return: Name of designated TMP If the TMP is an entity, name of TMP representative Address of designated TMP Identifying number of TMP Phone number of TMP Form 1065 (2009) Form 1065 (2009) 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 Ordinary business income (loss) (page 1, line 22) . . . . . . . . . . . . . Net rental real estate income (loss) (attach Form 8825) . . . . . . . . . . . 3a Other gross rental income (loss) . . . . . . . . 3b Expenses from other rental activities (attach statement) . Other net rental income (loss). Subtract line 3b from line 3a . . . . . . . . . Guaranteed payments ..................... Interest income . . . . . . . . . . . . . . . . . . . . . . . . Dividends: a Ordinary dividends . . . . . . . . . . . . . . . . . 6b ...... b Qualified dividends Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . Net short-term capital gain (loss) (attach Schedule D (Form 1065)) . . . . . . . Net long-term capital gain (loss) (attach Schedule D (Form 1065)) . . . . . . . 9b Collectibles (28%) gain (loss) . . . . . . . . . 9c Unrecaptured section 1250 gain (attach statement) . . Net section 1231 gain (loss) (attach Form 4797) . . . . . . . . . . . . . Other income (loss) (see instructions) Type Section 179 deduction (attach Form 4562) . . . . . . . . . . . . . . . Contributions . . . . . . . . . . . . . . . . . . . . . . . . Investment interest expense ................... (1) Type (2) Amount Section 59(e)(2) expenditures: Other deductions (see instructions) Type Net earnings (loss) from self-employment . . . . . . . . . . . . . . . Gross farming or fishing income . . . . . . . . . . . . . . . . . . Gross nonfarm income . . . . . . . . . . . . . . . . . . . . . Low-income housing credit (section 42(j)(5)) . . . . . . . . . . . . . . Low-income housing credit (other) ................. Qualified rehabilitation expenditures (rental real estate) (attach Form 3468) . . . . Type Other rental real estate credits (see instructions) Type Other rental credits (see instructions) Other credits (see instructions) Type Name of country or U.S. possession Gross income from all sources . . . . . . . . . . . . . . . . . . . Gross income sourced at partner level . . . . . . . . . . . . . . . . Foreign gross income sourced at partnership level e General category Passive category f Other Deductions allocated and apportioned at partner level Interest expense h Other . . . . . . . . . . Deductions allocated and apportioned at partnership level to foreign source income j General category Passive category k Other ........ Total foreign taxes (check one): Paid Accrued Reduction in taxes available for credit (attach statement) . . . . . . . . . . Other foreign tax information (attach statement) . . . . . . . . . . . . . Post-1986 depreciation adjustment . . . . . . . . . . . . . . . . . Adjusted gain or loss . . . . . . . . . . . . . . . . . . . . . . Depletion (other than oil and gas) . . . . . . . . . . . . . . . . . . Oil, gas, and geothermal propertiesgross income . . . . . . . . . . . . Oil, gas, and geothermal propertiesdeductions . . . . . . . . . . . . . Other AMT items (attach statement) . . . . . . . . . . . . . . . . . Tax-exempt interest income . . . . . . . . . . . . . . . . . . . . Other tax-exempt income . . . . . . . . . . . . . . . . . . . . Nondeductible expenses . . . . . . . . . . . . . . . . . . . . . Distributions of cash and marketable securities . . . . . . . . . . . . . Distributions of other property . . . . . . . . . . . . . . . . . . . Investment income . . . . . . . . . . . . . . . . . . . . . . . Investment expenses . . . . . . . . . . . . . . . . . . . . . . Other items and amounts (attach statement) . . . . . . . . . . . . . . 4 Total amount 1 2 3c 4 5 6a 7 8 9a 10 11 12 13a 13b 13c(2) 13d 14a 14b 14c 15a 15b 15c 15d 15e 15f 16b 16c 16f 16h 16k 16l 16m 17a 17b 17c 17d 17e 17f 18a 18b 18c 19a 19b 20a 20b Form 1065 (2009) Form 1065 (2009) 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 Balance Sheets per Books Assets 1 2a b 3 4 5 6 7 8 9a b 10a b 11 12a b 13 14 Cash . . . . . . . . . . . Trade notes and accounts receivable . Less allowance for bad debts . . . Inventories . . . . . . . . . U.S. government obligations . . . Tax-exempt securities ..... Other current assets (attach statement) 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 . . End of tax year (c) (d) . . . . . . . . . . . . . . . . . . 15 16 17 18 19 20 21 22 Beginning of tax year (a) (b) . . . . . . . Mortgages, notes, bonds payable in less than 1 year Other current liabilities (attach statement) All nonrecourse loans . . . . . . . . . Mortgages, notes, bonds payable in 1 year or more Other liabilities (attach statement) . Partners' capital accounts . . . Total liabilities and capital . . . Schedule M-1 . . . . . . . . . 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 1 2 3 Guaranteed payments (other than health insurance) . . . . . . . 4 on Schedule K, lines 1 through 11 (itemize): Income included on Schedule K, lines 1, 2, 3c, 5, 6a, 7, 8, 9a, 10, and 11, not recorded on books this year (itemize): Expenses recorded on books this year not included on Schedule K, lines 1 through 13d, and 16l (itemize): a Depreciation $ b Travel and entertainment $ a a Add lines 1 through 4 . . . . 1 2 3 4 Balance at beginning of year . Capital contributed: a Cash . b Property Net income (loss) per books . . Other increases (itemize): . . . . . . . . 5 Add lines 1 through 4 . . . . . Deductions included on Schedule K, lines 1 through 13d, and 16l, not charged against book income this year (itemize): Depreciation $ 7 8 9 5 Schedule M-2 Tax-exempt interest $ Add lines 6 and 7 . . . . . . . . Income (loss) (Analysis of Net Income (Loss), line 1). Subtract line 8 from line 5 . Analysis of Partners' Capital Accounts . . . 6 7 8 9 Distributions: a Cash .. b Property . Other decreases (itemize): . . . . . . . . Add lines 6 and 7 . . . . . . . . Balance at end of year. Subtract line 8 from line 5 Form 1065 (2009) 651109 Final K-1 2009 Schedule K-1 (Form 1065) Part III Amended K-1 OMB No. 1545-0099 Partner's Share of Current Year Income, Deductions, Credits, and Other Items 1 Ordinary business income (loss) 2 Net rental real estate income (loss) 3 Other net rental income (loss) 4 Guaranteed payments 5 Interest income 6a Ordinary dividends 6b For calendar year 2009, or tax year beginning ending Part I , 20 Qualified dividends 16 Foreign transactions Information About the Partnership 17 Alternative minimum tax (AMT) items 18 Tax-exempt income and nondeductible expenses Distributions 20 Other information Partnership's employer identification number B Credits , 2009 Partner's Share of Income, Deductions, See back of form and separate instructions. Credits, etc. A 15 19 Department of the Treasury Internal Revenue Service Partnership's name, address, city, state, and ZIP code 7 Net short-term capital gain (loss) 9a D Royalties 8 C Net long-term capital gain (loss) IRS Center where partnership filed return Check if this is a publicly traded partnership (PTP) Part II Information About the Partner E Partner's identifying number 9b Collectibles (28%) gain (loss) F Partner's name, address, city, state, and ZIP code 9c Unrecaptured section 1250 gain 10 Net section 1231 gain (loss) 11 Other income (loss) 12 Section 179 deduction 13 Other deductions G General partner or LLC member-manager Limited partner or other LLC member H Domestic partner Foreign partner I What type of entity is this partner? J Partner's share of profit, loss, and capital (see instructions): Beginning Ending Profit % Loss % % Capital % % Partner's share of liabilities at year end: Nonrecourse . . $ . $ . $ . . $( . . $ . . . . . . . . *See attached statement for additional information. Partner's capital account analysis: Beginning capital account . . Capital contributed during the year Current year increase (decrease) Withdrawals & distributions Ending capital account . Tax basis . GAAP $ ) Section 704(b) book Other (explain) M Self-employment earnings (loss) $ . . 14 $ . Recourse L . Qualified nonrecourse financing For IRS Use Only K % 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. Cat. No. 11394R Schedule K-1 (Form 1065) 2009 Schedule K-1 (Form 1065) 2009 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, column (f) Schedule D, line 12, column (f) 9a. Net long-term capital gain (loss) 28% Rate Gain Worksheet, line 4 9b. Collectibles (28%) gain (loss) (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 See the Partner's Instructions F Other income (loss) 12. Section 179 deduction See the Partner's Instructions 13. Other deductions A Cash contributions (50%) B Cash contributions (30%) C Noncash contributions (50%) See the Partner's D Noncash contributions (30%) E Capital gain property to a 50% Instructions organization (30%) F Capital gain property (20%) G Contributions (100%) Form 4952, line 1 H Investment interest expense I Deductionsroyalty income Schedule E, line 18 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 14 P Preproductive period expenses See the Partner's Instructions Q Commercial revitalization deduction See Form 8582 instructions from rental real estate activities See the Partner's Instructions R Pensions and IRAs 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 7 V Employer's Form W-2 wages Form 8903, line 15 See the Partner's Instructions W Other deductions 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 See the Partner's Instructions B Gross farming or fishing income C Gross non-farm income See the Partner's Instructions 15. Credits A Low-income housing credit (section See the Partner's Instructions 42(j)(5)) from pre-2008 buildings B Low-income housing credit (other) See the Partner's Instructions from pre-2008 buildings C Low-income housing credit (section 42(j)(5)) from post-2007 buildings Form 8586, line 11 D Low-income housing credit (other) from post-2007 buildings Form 8586, line 11 E Qualified rehabilitation expenditures (rental real estate) See the Partner's Instructions F Other rental real estate credits G Other rental credits H Undistributed capital gains credit Form 1040, line 70; check box a I Alcohol and cellulosic biofuel fuels Form 6478, line 7 credit J Work opportunity credit Form 5884, line 3 Code K L 16. 17. 18. 19. 20. Report on Disabled access credit See the Partner's Instructions Empowerment zone and renewal Form 8844, line 3 community employment credit M Credit for increasing research activities See the Partner's Instructions N Credit for employer social security Form 8846, line 5 and Medicare taxes O Backup withholding Form 1040, line 61 P Other credits See the Partner's Instructions Foreign transactions A Name of country or U.S. possession Form 1116, Part I B Gross income from all sources C Gross income sourced at partner level Foreign gross income sourced at partnership level D Passive category Form 1116, Part I E General category F Other Deductions allocated and apportioned at partner level Form 1116, Part I G Interest expense Form 1116, Part I H Other Deductions allocated and apportioned at partnership level to foreign source income I Passive category Form 1116, Part I J General category K Other Other information L Total foreign taxes paid Form 1116, Part II Form 1116, Part II M Total foreign taxes accrued N Reduction in taxes available for credit Form 1116, line 12 O Foreign trading gross receipts Form 8873 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 Instructions and C Depletion (other than oil & gas) the Instructions for D Oil, gas, & geothermalgross income Form 6251 E Oil, gas, & geothermaldeductions 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 See the Partner's Instructions B Distribution subject to section 737 C Other property Other information A Investment income Form 4952, line 4a B Investment expenses Form 4952, line 5 C Fuel tax credit information Form 4136 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 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 See the Partner's R Interest allocable to production Instructions 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 2 651109 Final K-1 2009 Schedule K-1 (Form 1065) Part III Amended K-1 OMB No. 1545-0099 Partner's Share of Current Year Income, Deductions, Credits, and Other Items 1 Ordinary business income (loss) 2 Net rental real estate income (loss) 3 Other net rental income (loss) 4 Guaranteed payments 5 Interest income 6a Ordinary dividends 6b For calendar year 2009, or tax year beginning ending Part I , 20 Qualified dividends 16 Foreign transactions Information About the Partnership 17 Alternative minimum tax (AMT) items 18 Tax-exempt income and nondeductible expenses Distributions 20 Other information Partnership's employer identification number B Credits , 2009 Partner's Share of Income, Deductions, See back of form and separate instructions. Credits, etc. A 15 19 Department of the Treasury Internal Revenue Service Partnership's name, address, city, state, and ZIP code 7 Net short-term capital gain (loss) 9a D Royalties 8 C Net long-term capital gain (loss) IRS Center where partnership filed return Check if this is a publicly traded partnership (PTP) Part II Information About the Partner E Partner's identifying number 9b Collectibles (28%) gain (loss) F Partner's name, address, city, state, and ZIP code 9c Unrecaptured section 1250 gain 10 Net section 1231 gain (loss) 11 Other income (loss) 12 Section 179 deduction 13 Other deductions G General partner or LLC member-manager Limited partner or other LLC member H Domestic partner Foreign partner I What type of entity is this partner? J Partner's share of profit, loss, and capital (see instructions): Beginning Ending Profit % Loss % % Capital % % Partner's share of liabilities at year end: Nonrecourse . . $ . $ . $ . . $( . . $ . . . . . . . . *See attached statement for additional information. Partner's capital account analysis: Beginning capital account . . Capital contributed during the year Current year increase (decrease) Withdrawals & distributions Ending capital account . Tax basis . GAAP $ ) Section 704(b) book Other (explain) M Self-employment earnings (loss) $ . . 14 $ . Recourse L . Qualified nonrecourse financing For IRS Use Only K % 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. Cat. No. 11394R Schedule K-1 (Form 1065) 2009 Schedule K-1 (Form 1065) 2009 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, column (f) Schedule D, line 12, column (f) 9a. Net long-term capital gain (loss) 28% Rate Gain Worksheet, line 4 9b. Collectibles (28%) gain (loss) (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 See the Partner's Instructions F Other income (loss) 12. Section 179 deduction See the Partner's Instructions 13. Other deductions A Cash contributions (50%) B Cash contributions (30%) C Noncash contributions (50%) See the Partner's D Noncash contributions (30%) E Capital gain property to a 50% Instructions organization (30%) F Capital gain property (20%) G Contributions (100%) Form 4952, line 1 H Investment interest expense I Deductionsroyalty income Schedule E, line 18 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 14 P Preproductive period expenses See the Partner's Instructions Q Commercial revitalization deduction See Form 8582 instructions from rental real estate activities See the Partner's Instructions R Pensions and IRAs 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 7 V Employer's Form W-2 wages Form 8903, line 15 See the Partner's Instructions W Other deductions 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 See the Partner's Instructions B Gross farming or fishing income C Gross non-farm income See the Partner's Instructions 15. Credits A Low-income housing credit (section See the Partner's Instructions 42(j)(5)) from pre-2008 buildings B Low-income housing credit (other) See the Partner's Instructions from pre-2008 buildings C Low-income housing credit (section 42(j)(5)) from post-2007 buildings Form 8586, line 11 D Low-income housing credit (other) from post-2007 buildings Form 8586, line 11 E Qualified rehabilitation expenditures (rental real estate) See the Partner's Instructions F Other rental real estate credits G Other rental credits H Undistributed capital gains credit Form 1040, line 70; check box a I Alcohol and cellulosic biofuel fuels Form 6478, line 7 credit J Work opportunity credit Form 5884, line 3 Code K L 16. 17. 18. 19. 20. Report on Disabled access credit See the Partner's Instructions Empowerment zone and renewal Form 8844, line 3 community employment credit M Credit for increasing research activities See the Partner's Instructions N Credit for employer social security Form 8846, line 5 and Medicare taxes O Backup withholding Form 1040, line 61 P Other credits See the Partner's Instructions Foreign transactions A Name of country or U.S. possession Form 1116, Part I B Gross income from all sources C Gross income sourced at partner level Foreign gross income sourced at partnership level D Passive category Form 1116, Part I E General category F Other Deductions allocated and apportioned at partner level Form 1116, Part I G Interest expense Form 1116, Part I H Other Deductions allocated and apportioned at partnership level to foreign source income I Passive category Form 1116, Part I J General category K Other Other information L Total foreign taxes paid Form 1116, Part II Form 1116, Part II M Total foreign taxes accrued N Reduction in taxes available for credit Form 1116, line 12 O Foreign trading gross receipts Form 8873 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 Instructions and C Depletion (other than oil & gas) the Instructions for D Oil, gas, & geothermalgross income Form 6251 E Oil, gas, & geothermaldeductions 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 See the Partner's Instructions B Distribution subject to section 737 C Other property Other information A Investment income Form 4952, line 4a B Investment expenses Form 4952, line 5 C Fuel tax credit information Form 4136 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 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 See the Partner's R Interest allocable to production Instructions 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 2