73 72 71 201803190015222016_form_1065 20180319001519partnership_tax_return_assignment_info
The Dapper-Dons Partnership was formed ten years ago as a general partnership to custom tailor men’s clothing. Dapper-Dons is located at 123 Flamingo Drive in City, ST, 54321. Bob Dapper manages the business and has a 40% capital and profits interest. His address is 709 Brumby Way, City, ST, 54321. Jeremy Dons owns the remaining 60% interest but is not active in the business. His address is 807 Ninth Avenue, City, ST, 54321. The partner- ship values its inventory using the cost method and did not change the method used during the current year. The partnership uses the accrual method of accounting. Because of its simplicity, the partnership is not subject to the partnership audit procedures. The partner- ship has no foreign partners, no foreign transactions, no interests in foreign trusts, and no foreign financial accounts. This partnership is neither a tax shelter nor a publicly traded partnership. No changes in ownership of partnership interests occurred during the current year. The partnership made cash distributions of $155,050 and $232,576 to Dapper and Dons, respectively, on December 30 of the current year. It made no other property distribu- tions. Financial statements for the current year are presented in Tables C:9-1 and C:9-2. Assume that Dapper-Dons’ business qualifies as a U.S. production activity and that its qualified production activities income is $600,000. Dapper-Dons, being an eligible small pass-through partnership, uses the small business simplified overall method for report- ing these activities (see discussion for Line 13d of Schedules K and K-1 in the Form 1065 instructions).
Prepare a current year (2016 for this problem) partnership tax return for Dapper-Dons Partnership.
For
m
1
065
Dep
a
rtment o
f
th
e
Treasury
Interna
l
Revenue Servi
c
e
U.S
.
Retur
n
of Partnership Income
For calendar year
20
16
, or tax year
b
eginnin
g
, 2016, ending ,
20
.
▶ Information about Form 106
5
an
d
its separate instructions is at www.irs.gov/form1065.
OMB No.
15
45-0
12
3
2016
Type
or
Name of partnership
Number, street, and room or suite no. If
a
P.O. box, see the instructions.
City or town, state or province, country, and ZIP or foreign postal code
A Principal business activity
B Principal product or service
C Business code number
D Employer identification number
E
Date
business started
F Total assets (see the
instructions)
$
G
Check applicable boxes:
(1)
Initial return
(2)
Final return
(3)
Name change
(4)
Address change
(5)
Amended return
(6)
Technical termination – also check (1) or (2)
H
Check accounting method:
(1)
Cash
(2)
Accrual
(3) Other (specify) ▶
I
Number of Schedules K-1. Attach one for each person who was a partner at any time during the tax year ▶
J
Check if Schedules C and M-
3
are attached . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Caution. Include only trade or business income and expenses on lines
1a
through 2
2
below. See the instructions for more information.
In
c
o
m
e
1a Gross receipts or sales . . . . . . . . . . . . . 1a
b
Returns and allowances . . . . . . . . . . . .
1b
c
Balance. Subtract line 1b from line 1a . . . . . . . . . . . . . . . . . .
1c
2 Cost of goods sold (attach Form 1125-A) . . . . . . . . . . . . . . . . 2
3 Gross profit. Subtract line 2 from line 1c . . . . . . . . . . . . . . . . . 3
4
Ordinary income (loss) from other partnerships, estates, and trusts (attach statement) . . 4
5 Net farm profit (loss) (attach Schedule F (Form 1040)) . . . . . . . . . . . . 5
6
Net gain (loss) from Form 4797, Part II, line 1
7
(attach Form 4797) . . . . . . . . 6
7 Other income (loss) (attach statement) . . . . . . . . . . . . . . . . . 7
8
Total income (loss). Combine lines 3 through 7 . . . . . . . . . . . . . . 8
D
e
d
u
c
ti
o
n
s
(s
e
e
t
h
e
in
st
ru
c
ti
o
n
s
fo
r
lim
it
a
ti
o
n
s)
9
Salaries and wages (other than to partners) (less employment credits) . . . . . . . 9
10
Guaranteed payments to partners . . . . . . . . . . . . . . . . . . . 10
1
1
Repairs and maintenance . . . . . . . . . . . . . . . . . . . . . .
11
12
Bad debts . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13
Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
14
Taxes and licenses . . . . . . . . . . . . . . . . . . . . . . . .
14
15
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1
6a
Depreciation (if required, attach Form 4562) . . . . . . 16a
b
Less depreciation reported on Form 1125-A and elsewhere on return
1
6b
16c
17
Depletion (Do not deduct oil and gas depletion.) . . . . . . . . . . . . .
17
18
Retirement plans, etc. . . . . . . . . . . . . . . . . . . . . . . .
18
19
Employee benefit programs . . . . . . . . . . . . . . . . . . . . . 19
20 Other deductions (attach statement) . . . . . . . . . . . . . . . . . . 20
21
Total deductions. Add the amounts shown in the far right column for lines 9 through 20 . 21
22
Ordinary business income (loss). Subtract line 21 from line 8 . . . . . . . . . 22
Sign
Here
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
No
▲
Signature of general partner or limited liability company member manager
▲
Date
Paid
Preparer
Use Only
Print/Type preparer’s name
Preparer’s signature
Date
Check if
self-employed
PTIN
Firm’s name ▶
Firm’s address ▶
Firm’s EIN ▶
Phone no.
For Paperwork Reduction Act Notice, see separate instructions.
Cat. No. 11390Z
Form 1065 (2016)
Form 1065 (2016) Page 2
Schedule B
Other Information
1
What type of entity is filing this return? Check the applicable box:
Yes
No
a
Domestic general partnership
b
Domestic limited partnership
c
Domestic limited liability company
d
Domestic limited liability partnership
e
Foreign partnership
f Other ▶
2 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? . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
At the end of the tax year:
a 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
At the end of the tax year, did the partnership:
a 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 No
5 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)? . . . . . . . . . . . .
8 During the tax year, did the partnership have any debt that was cancelled, was forgiven, or had the terms
modified so as to reduce the principal amount of the debt? . . . . . . . . . . . . . . . . . .
9 Has this partnership filed, or is it required to file, Form 8918, Material Advisor Disclosure Statement, to provide
information on any reportable transaction? . . . . . . . . . . . . . . . . . . . . . . . .
10 At any time during calendar year 2016, 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 FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). If “Yes,”
enter the name of the foreign country. ▶
Form 1065 (2016)
Form 1065 (2016) Page 3
Schedule B Other Information (continued)
Yes No
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 Repor
t
Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. See instructions . . . . . . . . .
1
2a
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 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
13 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) . . . . . . . . . . . . . . . . . . . ▶
14 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? . . . . . . . . . . . . . . . . . . . . . . . .
15 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 ▶
16
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. ▶
17 Enter the number of Forms 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, attached
to this return. ▶
18 a Did you make any payments in 2016 that would require you to file Form(s) 1099? See instructions . . . . .
b If “Yes,” did you or will you file required Form(s) 1099? . . . . . . . . . . . . . . . . . . . .
19 Enter the number of Form(s) 5471, Information Return of U.S. Persons With Respect To Certain Foreign
Corporations, attached to this return. ▶
20 Enter the number of partners that are foreign governments under section 892. ▶
21 During the partnership’s tax year, did the partnership make any payments that would require it to file Form 1042
and 1042-S under chapter 3 (sections 1441 through 1464) or chapter 4 (sections 1471 through 1474)? . . . .
22 Was the partnership a specified domestic entity required to file Form 8938 for the tax year (See the Instructions for
Form 8938)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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:
Name of
designated
TMP
▲
Identifying
number of TMP
▲
If the TMP is an
entity, name
of TMP representative
▲
Phone number
of TMP
▲
Address of
designated
TMP
▲
Form 1065 (2016)
Form 1065 (2016) Page 4
Schedule K
Partners’ Distributive Share Items
Total amount
In
c
o
m
e
(
L
o
s
s
)
1 Ordinary business income (loss) (page 1, line 22) . . . . . . . . . . . . . 1
2 Net rental real estate income (loss) (attach Form 8825) . . . . . . . . . . . 2
3a
Other gross rental income (loss) . . . . . . . . 3a
b Expenses from other rental activities (attach statement)
3b
c Other net rental income (loss). Subtract line 3b from line 3a . . . . . . . . .
3c
4 Guaranteed payments . . . . . . . . . . . . . . . . . . . . . 4
5 Interest income . . . . . . . . . . . . . . . . . . . . . . . . 5
6
Dividends:
a Ordinary dividends . . . . . . . . . . . . . . . . . 6a
b Qualified dividends . . . . . . 6b
7 Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8 Net short-term capital gain (loss) (attach Schedule D (Form 1065)) . . . . . . . 8
9 a Net long-term capital gain (loss) (attach Schedule D (Form 1065)) . . . . . . .
9a
b Collectibles (28%) gain (loss) . . . . . . . . .
9b
c Unrecaptured section 1250 gain (attach statement) . .
9c
10 Net section 1231 gain (loss) (attach Form 4797) . . . . . . . . . . . . . 10
11
Other income (loss) (see instructions)
Type ▶ 11
D
e
d
u
c
ti
o
n
s
12 Section 179 deduction (attach Form 4562) . . . . . . . . . . . . . . . 12
13a
Contributions . . . . . . . . . . . . . . . . . . . . . . . . 13a
b Investment interest expense . . . . . . . . . . . . . . . . . . .
13b
c
Section 59(e)(2) expenditures:
(1) Type ▶ (2) Amount ▶
13c(2)
d Other deductions (see instructions) Type ▶
13d
S
el
f-
E
m
p
lo
y-
m
en
t
14a
Net earnings (loss) from self-employment . . . . . . . . . . . . . . . 14a
b Gross farming or fishing income . . . . . . . . . . . . . . . . . .
14b
c Gross nonfarm income . . . . . . . . . . . . . . . . . . . . .
14c
C
re
d
it
s
15a
Low-income housing credit (section 42(j)(5)) . . . . . . . . . . . . . . 15a
b Low-income housing credit (other) . . . . . . . . . . . . . . . . .
15b
c Qualified rehabilitation expenditures (rental real estate) (attach Form 3468, if applicable)
15c
d
Other rental real estate credits (see instructions)
Type ▶
15d
e
Other rental credits (see instructions)
Type ▶
15e
f
Other credits (see instructions)
Type ▶
15f
F
o
re
ig
n
T
ra
n
s
a
c
ti
o
n
s
16a Name of country or U.S. possession ▶
b Gross income from all sources . . . . . . . . . . . . . . . . . . .
16b
c Gross income sourced at partner level . . . . . . . . . . . . . . . .
16c
Foreign gross income sourced at partnership level
d Passive category ▶ e General category ▶ f Other ▶
16f
Deductions
allocated and apportioned at partner level
g Interest expense ▶ h Other . . . . . . . . . . ▶
16h
Deductions allocated and apportioned at partnership level to foreign source income
i
Passive category ▶ j General category ▶ k Other ▶
16k
l
Total foreign taxes (check one):
▶ Paid
Accrued
. . . . . . . .
16l
m Reduction in taxes available for credit (attach statement) . . . . . . . . . .
16m
n Other foreign tax information (attach statement) . . . . . . . . . . . . .
A
lt
e
rn
a
ti
ve
M
in
im
u
m
T
a
x
(A
M
T
)
It
e
m
s
1
7a
Post-1986 depreciation adjustment . . . . . . . . . . . . . . . . . 17a
b Adjusted gain or loss . . . . . . . . . . . . . . . . . . . . . .
17b
c Depletion (other than oil and gas) . . . . . . . . . . . . . . . . . .
17c
d Oil, gas, and geothermal properties—gross income . . . . . . . . . . . .
17d
e Oil, gas, and geothermal properties—deductions . . . . . . . . . . . . .
17e
f Other AMT items (attach statement) . . . . . . . . . . . . . . . . .
17f
O
th
e
r
In
fo
rm
a
ti
o
n
18a
Tax-exempt interest income . . . . . . . . . . . . . . . . . . . . 18a
b Other tax-exempt income . . . . . . . . . . . . . . . . . . . .
18b
c Nondeductible expenses . . . . . . . . . . . . . . . . . . . . .
18c
19a
Distributions of cash and marketable securities . . . . . . . . . . . . . 19a
b Distributions of other property . . . . . . . . . . . . . . . . . . .
19b
20a
Investment income . . . . . . . . . . . . . . . . . . . . . . . 20a
b Investment expenses . . . . . . . . . . . . . . . . . . . . . .
20b
c Other items and amounts (attach statement) . . . . . . . . . . . . . .
Form 1065 (2016)
Form 1065 (2016) Page 5
Analysis of Net
Income
(Loss)
1 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
2
Analysis by
partner type:
(i) Corporate
(ii) Individual
(active)
(iii) Individual
(passive)
(iv) Partnership
(v) Exempt
Organization
(vi)
Nominee/Other
a
General partners
b
Limited partners
Schedule L
Balance Sheets per Books
Beginning of tax year
End of tax year
Assets
(a)
(b)
(c)
(d)
1 Cash . . . . . . . . . . . . .
2a Trade notes and accounts receivable . . .
b Less allowance for bad debts . . . . .
3 Inventories . . . . . . . . . . .
4 U.S. government obligations . . . . .
5 Tax-exempt securities . . . . . . .
6 Other current assets (attach statement) . .
7a Loans to partners (or persons related to partners)
b Mortgage and real estate loans . . . .
8 Other investments (attach statement) . . .
9a Buildings and other depreciable assets . .
b Less accumulated depreciation . . . .
10a
Depletable assets . . . . . . . . .
b Less accumulated depletion . . . . .
11 Land (net of any amortization) . . . . .
12a
Intangible assets (amortizable only) . . .
b Less accumulated amortization . . . .
13 Other assets (attach statement) . . . .
14 Total assets . . . . . . . . . . .
Liabilities and Capital
15 Accounts payable . . . . . . . . .
16
Mortgages, notes, bonds payable in less than 1 year
17 Other current liabilities (attach statement) .
18 All nonrecourse loans . . . . . . . .
19a
Loans from partners (or persons related to partners)
b
Mortgages, notes, bonds payable in 1 year or more
20 Other liabilities (attach statement) . . . .
21 Partners’ capital accounts . . . . . .
22 Total liabilities and capital . . . . . .
Schedule M-1
Reconciliation of
Income (Loss)
per Books With Income (Loss) per Return
Note. The partnership may be required to file Schedule M-3 (see instructions).
1 Net income (loss) per books . . . .
2
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 . . . . . .
6
Income recorded on books this year not included
on Schedule K, lines 1 through 11 (itemize):
a Tax-exempt interest $
7
Deductions included on Schedule K, lines
1 through 13d, and 16l, not charged
against book income this year (itemize):
a Depreciation $
8 Add lines 6 and 7 . . . . . . . .
9 Income (loss) (Analysis of Net Income
(Loss), line 1). Subtract line 8 from line 5 .
Schedule M-2
Analysis of Partners’ Capital Accounts
1 Balance at beginning of year . . .
2 Capital contributed: a Cash . . .
b Property . .
3 Net income (loss) per books . . . .
4 Other increases (itemize):
5 Add lines 1 through 4 . . . . . .
6 Distributions: a Cash . . . . . .
b Property . . . . .
7 Other decreases (itemize):
8 Add lines 6 and 7 . . . . . . . .
9
Balance at end of year. Subtract line 8 from line 5
Form 1065 (2016)
Version A, Cycle 4
INTERNAL USE ONLY
DRAFT AS OF
June 7, 2016
2016 Form 1065
SE:W:CAR:MP
U.S. Return of Partnership Income
Form
1065
Department of the Treasury Internal Revenue Service
U.S. Return of Partnership Income
.
▶ Information about Form 1065 and its separate instructions is at www.irs.gov/form1065.
OMB No. 1545-0123
O M B Number 1545-0123. For Paperwork Reduction Act Notice, see separate instructions.
2016
2016. Catalog Number 11390Z.
Type
or
Print
F Total assets (see the instructions)
G
Check applicable boxes:
(1)
Initial return
(2)
Final return
(3)
Name change
(4)
Address change
(5)
Amended return
(6)
Technical termination – also check (1) or (2)
H
Check accounting method:
(1)
Cash
(2)
Accrual
(3)
I
J
Check if Schedules C and M-3 are attached
Caution. Include only trade or business income and expenses on lines 1a through 22 below. See the instructions for more information.
Income
1
a
Gross receipts or sales
1a
b
Returns and allowances
1b
c
Balance. Subtract line 1b from line 1a
1c
2
Cost of goods sold (attach Form 1125-A)
2
3
Gross profit. Subtract line 2 from line 1c
3
4
Ordinary income (loss) from other partnerships, estates, and trusts (attach statement)
4
5
Net farm profit (loss) (attach Schedule F (Form 1040))
5
6
Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797)
6
7
Other income (loss) (attach statement)
7
8
Total income (loss). Combine lines 3 through 7
8
Deductions
(see the instructions for limitations)
9
Salaries and wages (other than to partners) (less employment credits)
9
10
Guaranteed payments to partners
10
11
Repairs and maintenance
11
12
Bad debts
12
13
Rent
13
14
Taxes and licenses
14
15
Interest
15
16
a
Depreciation (if required, attach Form 4562)
16a
b
Less depreciation reported on Form 1125-A and elsewhere on return
16b
16c
17
Depletion (Do not deduct oil and gas depletion.)
17
18
Retirement plans, etc.
18
19
Employee benefit programs
19
20
Other deductions (attach statement)
20
21
Total deductions. Add the amounts shown in the far right column for lines 9 through 20
21
22
Ordinary business income (loss). Subtract line 21 from line 8
22
Sign Here
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)?
▲
Signature of general partner or limited liability company member manager
▲
Date
Paid Preparer Use Only
Preparer’s signature
Date
Check if
self-employed
For Paperwork Reduction Act Notice, see separate instructions.
Cat. No. 11390Z
Form 1065 (2016)
Form 1065 (2016)
Page
2
Schedule B
Other Information
1
What type of entity is filing this return? Check the applicable box:
Yes
No
a
Domestic general partnership
b
Domestic limited partnership
c
Domestic limited liability company
d
Domestic limited liability partnership
e
Foreign partnership
f
2
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?
3
At the end of the tax year:
a
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
At the end of the tax year, did the partnership:
a
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
No
5
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)?
8
During the tax year, did the partnership have any debt that was cancelled, was forgiven, or had the terms modified so as to reduce the principal amount of the debt?
9
Has this partnership filed, or is it required to file, Form 8918, Material Advisor Disclosure Statement, to provide information on any reportable transaction?
10
At any time during calendar year 2016, 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 FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). If “Yes,” enter the name of the foreign country. ▶
Form 1065 (2016)
Form 1065 (2016)
Page 3
Schedule B
Other Information (continued)
Yes
No
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
12
a
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
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
13
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) ▶
14
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?
15
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 ▶
16
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. ▶
17
Enter the number of Forms 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, attached to this return. ▶
18
a
Did you make any payments in 2016 that would require you to file Form(s) 1099? See instructions
b
If “Yes,” did you or will you file required Form(s) 1099?
19
Enter the number of Form(s) 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations, attached to this return. ▶
20
Enter the number of partners that are foreign governments under section 892. ▶
21
During the partnership’s tax year, did the partnership make any payments that would require it to file Form 1042 and 1042-S under chapter 3 (sections 1441 through 1464) or chapter 4 (sections 1471 through 1474)?
22
Was the partnership a specified domestic entity required to file Form 8938 for the tax year (See the Instructions for Form 8938)?
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:
Name of designated TMP
▲
Identifying number of TMP
▲
If the TMP is an
entity, name
of TMP representative
▲
Phone number
of TMP
▲
Address of designated TMP
▲
Form 1065 (2016)
Form 1065 (2016)
Page 4
Schedule K
Partners’ Distributive Share Items
Total amount
Income (Loss)
1
Ordinary business income (loss) (page 1, line 22)
1
2
Net rental real estate income (loss) (attach Form 8825)
2
3
a
Other gross rental income (loss)
3a
b
Expenses from other rental activities (attach statement)
3b
c
Other net rental income (loss). Subtract line 3b from line 3a
3c
4
Guaranteed payments
4
5
Interest income
5
6
Dividends:
a
Ordinary dividends
6a
b
Qualified dividends
6b
7
Royalties
7
8
Net short-term capital gain (loss) (attach Schedule D (Form 1065))
8
9
a
Net long-term capital gain (loss) (attach Schedule D (Form 1065))
9a
b
Collectibles (28%) gain (loss)
9b
c
Unrecaptured section 1250 gain (attach statement)
9c
10
Net section 1231 gain (loss) (attach Form 4797)
10
11
Other income (loss) (see instructions)
11
Deductions
12
Section 179 deduction (attach Form 4562)
12
13
a
Contributions
13a
b
Investment interest expense
13b
c
Section 59(e)(2) expenditures:
(2) Amount ▶
13c(2)
d
Other deductions (see instructions)
13d
Self- Employ- ment
14
a
Net earnings (loss) from self-employment
14a
b
Gross farming or fishing income
14b
c
Gross nonfarm income
14c
Credits
15
a
Low-income housing credit (section 42(j)(5))
15a
b
Low-income housing credit (other)
15b
c
Qualified rehabilitation expenditures (rental real estate) (attach Form 3468, if applicable)
15c
d
Other rental real estate credits (see instructions)
15d
e
Other rental credits (see instructions)
15e
f
Other credits (see instructions)
15f
Foreign Transactions
16
a
b
Gross income from all sources
16b
c
Gross income sourced at partner level
16c
Foreign gross income sourced at partnership level
d
f Other ▶
16f
Deductions allocated and apportioned at partner level
g
h Other ▶
16h
Deductions allocated and apportioned at partnership level to foreign source income
i
k Other ▶
16k
l
Total foreign taxes (check one): ▶
Total foreign taxes (check one):
Paid
Accrued
16l
m
Reduction in taxes available for credit (attach statement)
16m
n
Other foreign tax information (attach statement)
Alternative Minimum Tax (AMT) Items
17
a
Post-1986 depreciation adjustment
17a
b
Adjusted gain or loss
17b
c
Depletion (other than oil and gas)
17c
d
Oil, gas, and geothermal properties—gross income
17d
e
Oil, gas, and geothermal properties—deductions
17e
f
Other AMT items (attach statement)
17f
Other Information
18
a
Tax-exempt interest income
18a
b
Other tax-exempt income
18b
c
Nondeductible expenses
18c
19
a
Distributions of cash and marketable securities
19a
b
Distributions of other property
19b
20
a
Investment income
20a
b
Investment expenses
20b
c
Other items and amounts (attach statement)
Form 1065 (2016)
Form 1065 (2016)
Page 5
Analysis of Net Income (Loss)
1
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
2
Analysis by partner type:
(i) Corporate
(ii) Individual (active)
(iii) Individual (passive)
(iv) Partnership
(v) Exempt Organization
(vi)
Nominee/Other
a
General partners
b
Limited partners
Schedule L
Balance Sheets per Books
Beginning of tax year
End of tax year
Assets
(a)
Beginning of tax year. (a).
(b)
Beginning of tax year. (b).
(c)
End of tax year. (c).
(d)
End of tax year. (d).
1
Cash
2a
Trade notes and accounts receivable
b
Less allowance for bad debts
3
Inventories
4
U.S. government obligations
5
Tax-exempt securities
6
Other current assets (attach statement)
7a
Loans to partners (or persons related to partners)
b
Mortgage and real estate loans
8
Other investments (attach statement)
9a
Buildings and other depreciable assets
b
Less accumulated depreciation
10a
Depletable assets
b
Less accumulated depletion
11
Land (net of any amortization)
12a
Intangible assets (amortizable only)
b
Less accumulated amortization
13
Other assets (attach statement)
14
Total assets
Liabilities and Capital
15
Accounts payable
16
Mortgages, notes, bonds payable in less than 1 year
17
Other current liabilities (attach statement)
18
All nonrecourse loans
19a
Loans from partners (or persons related to partners)
b
Mortgages, notes, bonds payable in 1 year or more
20
Other liabilities (attach statement)
21
Partners’ capital accounts
22
Total liabilities and capital
Schedule M-1
Reconciliation of Income (Loss) per Books With Income (Loss) per Return
Note. The partnership may be required to file Schedule M-3 (see instructions).
1
Net income (loss) per books
2
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
b
5
Add lines 1 through 4
6
Income recorded on books this year not included on Schedule K, lines 1 through 11 (itemize):
a
7
Deductions included on Schedule K, lines 1 through 13d, and 16l, not charged against book income this year (itemize):
a
8
Add lines 6 and 7
9
Income (loss) (Analysis of Net Income (Loss), line 1). Subtract line 8 from line 5
Schedule M-2
Analysis of Partners’ Capital Accounts
1
Balance at beginning of year
2
Capital contributed: a Cash
b Property
3
Net income (loss) per books
4
5
Add lines 1 through 4
6
Distributions: a Cash
b Property
7
8
Add lines 6 and 7
9
Balance at end of year. Subtract line 8 from line 5
Form 1065 (2016)
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UCSBExtension
ECON X427B – Winter 2018
Partnership Tax Return Assignment
You will be assigned to prepare a corporate tax return, using the 2015 Form 1065.
This assignment is worth 10% of your grade.
The interactive form is posted on GauchoSpace. You will physically submit this
return on paper, but you may write in the answers, or you may electronically
complete the interactive features of the form if you want.
As I state in the syllabus, my goal is for you to simply become familiar with the
process and not focus and occupy all your time on the return being 100% correct. I
want to see that you get the process and the concepts.
I will open a forum to allow discussion on this tax return assignment. Therefore, if
you have any questions related to it, there will be someplace you can turn for
information.
Please pace yourself when preparing this tax return. Keep in mind that you will
have your regular reading, discussion, homework, and quizzes to keep you busy.
So, you will need to fit this assignment in.
The tax return will be due by 6:40pm (10 minutes into class) on Monay, March 19.
The facts of the assignment are contained within C:9:57. However, I am
modifying the facts to reduce the level of complexity as follows:
Complete only the 5 pages of 2016 Form 1065 and Schedule K-1 for each
partner (2 total)
Do not do any calculations or prepare any of the forms otherwise required
for this problem:
• Inventory and Cost of Goods Sold (Form 1125-A)
• Sales of Business Property (Form 4797)
• Capital Gains and Losses (Schedule D)
• Fixed Assets and Depreciation
Other information given to reduce complexity of the problem:
• Net Section 1231 gain is $5,050 (sale of business property)
• Ignore AMT and rehabilitation expenditures issues
• Ignore issues related to domestic production activities deduction
(DPAD)
• Short-term capital loss for 2016 is $26,075 and long-term capital
gain for 2016 is $18,000
Other differences:
Tax Book
Depreciation $74,311 $49,782
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