1999
Department of the Treasury
Internal Revenue Service
Instructions for Form 1065
U.S. Partnership Return of Income
Section references are to the Internal Revenue Code unless otherwise noted.
Paperwork Reduction Act Notice. We ask for the information on this form to carry
out the Internal Revenue laws of the United States. 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.
The time needed to complete and file this form and related schedules will vary
depending on individual circumstances. The estimated average times are:
If you have comments concerning the accuracy of these time estimates or
suggestions for making these forms simpler, we would be happy to hear from you. You
can write to the Tax Forms Committee, Western Area Distribution Center, Rancho
Cordova, CA 95743-0001. DO NOT send the tax form to this address. Instead, see
Where To File on page 4.
Pending Legislation
At the time of printing, Congress was
considering legislation affecting these
instructions. Included in the pending
legislation are provisions that would
change the definition of a capital asset,
modify the treatment of gains from
constructive ownership transactions,
repeal the use of the installment method
for certain taxpayers, and limit the use of
the nonaccrual experience method of
accounting. See Pub. 553, Highlights of
1999 Tax Changes, to find out if this
legislation was enacted, and details on
the changes.
Changes To Note
l For tax years ending on or after
December 31, 1999, partnerships are no
longer able to submit their returns on
Contents
Page
Schedules K and K-1—Partners'
Shares of Income, Credits,
Deductions, etc.
. . . . . . . . .
18
Purpose of Schedules
. . . . . .
18
Substitute Forms
. . . . . . . . .
19
How Income is Shared Among
Partners . . . . . . . . . . . . . 19
Specific Instructions (Schedule K-1
Only)
. . . . . . . . . . . . . . .
19
General Information . . . . . . . . 19
Specific Items and Questions . . . 19
Form
Recordkeeping
Learning about the
law or the form
Preparing the form
Copying,
assembling,
and sending the
form
to the IRS
Specific Instructions (Schedules K
and K-1, Except as Noted)
. . .
20
Special Allocations
. . . . . . . .
20
1065
39 hr., 50 min.
21 hr., 28 min.
37 hr., 11 min.
4 hr., 1 min.
Income (Loss) . . . . . . . . . . . 20
Schedule D
(Form 1065)
6 hr., 56 min.
1 hr., 35 min.
1 hr., 47 min.
Deductions
. . . . . . . . . . . .
21
Credits
. . . . . . . . . . . . . .
22
Schedule K-1
(Form 1065)
25 hr., 7 min.
9 hr., 20 min.
10 hr., 10 min.
Investment Interest
. . . . . . . .
23
Schedule L
(Form 1065)
15 hr., 32 min.
6 min.
22 min.
Self-Employment
. . . . . . . . .
23
Adjustments and Tax Preference
Items
. . . . . . . . . . . . . .
24
Schedule M-1
(Form 1065)
3 hr., 21 min.
12 min.
16 min.
Foreign Taxes
. . . . . . . . . .
26
Schedule M-2
(Form 1065)
2 hr., 52 min.
6 min.
9 min.
Other
. . . . . . . . . . . . . . .
26
Analysis of Net Income (Loss)
. . .
28
Schedule L—Balance Sheets . . . . 29
Schedule M-1—Reconciliation of
Income (Loss) per Books With
Income (Loss) per Return
. . . .
29
Schedule M-2—Analysis of Partners'
Capital Accounts
. . . . . . . . .
29
Contents
Page
Contents
Page
Other Forms That May Be Required
5
Pending Legislation
. . . . . . . . .
1
Codes for Principal Business Activity
and Principal Product or Service
.
30
Attachments . . . . . . . . . . . .
7
Changes To Note
. . . . . . . . . .
1
Separately Stated Items
. . . . .
7
Photographs of Missing Children
. .
2
Elections Made by the Partnership
7
Unresolved Tax Problems
. . . . .
2
Elections Made by Each Partner
.
7
How To Get Forms and Publications
2
Partner's Dealings With Partnership
7
General Instructions
. . . . . . . .
2
Contributions to the Partnership
.
7
Purpose of Form
. . . . . . . . .
2
Dispositions of Contributed Property
8
Definitions . . . . . . . . . . . . .
2
Recognition of Precontribution Gain
on Certain Partnership Distributions 8
Who Must File
. . . . . . . . . .
3
Termination of the Partnership
. .
3
Unrealized Receivables and Inventory
Items
. . . . . . . . . . . . . .
8
Electronic Filing . . . . . . . . . .
3
When To File
. . . . . . . . . . .
3
Passive Activity Limitations
. . . .
8
Where To File . . . . . . . . . . .
4
Specific Instructions
. . . . . . .
12
Who Must Sign
. . . . . . . . . .
4
General Information . . . . . . . . 12
Penalties
. . . . . . . . . . . . .
4
Income
. . . . . . . . . . . . . .
13
Accounting Methods
. . . . . . .
4
Deductions
. . . . . . . . . . . .
14
Accounting Periods
. . . . . . . .
5
Schedule A—Cost of Goods Sold
.
17
Rounding Off to Whole Dollars
. .
5
Schedule B—Other Information . . . 17
Recordkeeping
. . . . . . . . . .
5
Designation of Tax Matters Partner . 18
Amended Return
. . . . . . . . .
5
Cat. No. 11392V
