See IRM 3.11.15.16.1. If present, edit "1 -" followed by the appropriate audit code in the left margin next to Line 12 of Form 1065-B.

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If present, edit code "2 - 1" in the left margin next to Line 12 of Form 1065-B.

See IRM 3.11.15.16.4. If present, edit "3 -" followed by the appropriate installment sales indicator in the left margin next to Line 12 of Form 1065-B.

Edit "4 - 1" as the Nonrecourse Loan Code in the left margin next to Line 12 of Form 1065-B in the following instances:

In all other instances, leave blank.

See IRM 3.11.15.16.6. If present, edit "5 -" followed by the appropriate missing schedule code in the left margin next to Line 12 on Form 1065-B.

See IRM 3.11.15.16.7. If present, edit "6 - 3" in the left margin next to Line 12 of Form 1065-B.

Total gross receipts are reported on Line 1a of Form 1065-B.

Returns and allowances is reported on Line 1b of Form 1065-B.

Cost of goods sold is reported on Line 2 of Form 1065-B.

The entry is from Form 1065-B, Page 2, Schedule A, Line 8.

Gross profit is derived by subtracting Line 2 from Line 1c on Form 1065-B.

If Line 3 is blank, subtract Line 2 from Line 1c and edit the result to Line 3 of Form 1065-B.

The partnership reports net rental real estate income or loss on Line 4 of Form 1065-B.

Form 8825 is used to report rental real estate income on Line 4 of Form 1065-B.

If there is an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Form 1065-B, Line 4 then Form 8825, Rental Real Estate Income and Expenses of a Partnership or an S Corporation must be attached.

Edit Form 1065-B, Line 4 and Form 8825 as follows:

The net income or loss from rental activities other than rental real estate is reported on Line 5 of Form 1065-B.

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The ordinary income or loss from other partnerships, estates and trusts is reported on Line 6 of Form 1065-B.

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The net profit or loss from farming is reported on Line 7 of Form 1065-B.

This entry is supported by Schedule F, Profit or Loss From Farming, or an attached schedule.

See IRM 3.11.15.56 for Schedule F editing procedures.

The excess of the net short-term capital gain over the net long-term capital loss is reported on Line 8 of Form 1065-B.

This entry is supported by Schedule D, Capital Gains and Losses, on Page 3 of Form 1065-B.

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The ordinary gains or losses from the sale, exchange or involuntary conversion of assets used by the partnership is reported on Line 9 of Form 1065-B.

This entry is supported by Form 4797, Sales of Business Property.

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Other income or loss not shown on Lines 1a through 9 is reported on Line 10 of Form 1065-B.

An entry on Line 10 should be supported by an attached schedule.

The total income or loss (sum of Lines 1c through 10) is reported on Line 11 of Form 1065-B.

The salaries and wages paid during the year is reported on Line 12 of Form 1065-B.

Entry must be positive.

Edit a "1" to the right of Line 12 on Form 1065-B if an entry greater than zero is present on:

Do not edit for the following:

Payments made to partners for services or for the use of capital is reported on Line 13 of Form 1065-B.

Entry must be positive.

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The costs of incidental repairs and maintenance that do not add to the value of the property or prolong its life is reported on Line 14 of Form 1065-B.

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Total debts that became worthless during the year is reported as bad debts on Line 15 of Form 1065-B.

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The rent paid on business property used by the partnership is reported on Line 16 of Form 1065-B.

Entry must be positive.

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Taxes and licenses paid by the partnership is reported on Line 17 of Form 1065-B.

Entry must be positive.

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Interest paid by the partnership is reported on Line 18 of Form 1065-B.

Entry must be positive.

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The depreciation (including the section 179 expense deduction) claimed on partnership assets is reported on Line 19a through 19c of Form 1065-B.

The partnership reports a deduction for depletion on Line 20 of Form 1065-B.

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Partnership contributions to a qualified pension, profit-sharing, annuity or IRA plan is reported on Line 21 of Form 1065-B.

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The Employee Plan Master File (EPMF) is a master file maintained at Martinsburg Computing Center (MCC). This file consists of various types of tax sheltered Pension/Profit Sharing Plans.

Edit a "1" to the right of Line 21 on Form 1065-B if an entry greater than zero (±) is present on any of the following:

Partnership contributions to employee benefit programs (e.g., insurance, health and welfare programs) is reported on Line 22 of Form 1065-B.

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The total allowable deductions not deducted elsewhere on page 1 is reported on Line 23 of Form 1065-B.

An entry on Line 23 may be supported by an attached schedule.

The total deductions (sum of Lines 12 through 23) is reported on Line 24 of Form 1065-B.

Taxable income or loss is derived by subtracting Line 24 from Line 11 on Form 1065-B.

The tax computed from the recapture of the investment credit and low-income housing credit is reported on Line 26 of Form 1065-B.

Entry may be supported by Form 4255 (Recapture of Investment Credit), Form 8611 (Recapture of Low-Income Housing Credit) or other attachment.

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Partnership enters an amount for federal excise tax paid and computed interest from Form 8913, Credit for Federal Telephone Excise Tax Paid.

Form 8913 is used to report the excise tax paid and the applicable computed interest on long distance telephone service during April 2003 through July 2006.

This credit may only be claimed on the 2006 Federal income tax return. For this purpose, the 2006 income tax return is the income tax return for calendar year 2006 or for a fiscal year that includes December 31, 2006.

Edit the TETR amount (on prior year return) to the dotted line next to Line 27.

Sequence Form 8913 after Form 8825.

Other payments made by the partnership are reported on Line 27 of Form 1065-B.

Entry may be supported by Form 2439 (Notice to Shareholders of Undistributed Long-Term Capital Gains), Form 4136 (Credit for Federal Tax Paid on Fuels) or other attachment.

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The balance of tax due (Line 27 subtracted from Line 26) is reported on Line 28 of Form 1065-B.

Entry must be present if Line 27 is smaller than Line 26.

If pre-computed interest or delinquency penalty or additional charge is evident, ensure that it has not been included in Line 26 or 27, nor reduced Line 28.

Excess payment (Line 27) exceeding the tax shown on Line 26 is a refund and reported on Line 29 of Form 1065-B.

Entry must be present if Line 27 is larger than Line 26.

Taxable interest from activities other than passive loss limitation activities is reported on Line 1 in Part II.

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Taxable ordinary dividends are reported on Line 2a in Part II of Form 1065-B.

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Gross royalties are reported on Line 3 in Part II of Form 1065-B.

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The excess of the net short-term capital gain over the net long-term capital loss is reported on Line 4 in Part II of Form 1065-B.

Entry may be supported by Schedule D.

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Other income or loss not reported elsewhere on the return is reported on Line 5 in Part II of Form 1065-B.

Entry may be supported by an attached schedule.

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Total income or loss (sum of Lines 1, 2c, 3, 4 and 5) is reported on Line 6 in Part II of Form 1065-B.

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Interest paid on a debt allowable to property held for investment is reported on Line 7 in Part II of Form 1065-B.

Entry is supported by Form 4952, Investment Interest Expense Deduction.

Entry must be positive.

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State and local income taxes paid by the partnership that would be allowed as itemized deductions on any partners' income tax return if they were paid directly by the partner are reported on Line 8 in Part II of Form 1065-B.

Entry must be positive.

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Contributions or gifts to a charitable organization are reported on Line 9 in Part II of Form 1065-B.

Entry may be supported by Form 8283, Noncash Charitable Contributions or an attached statement.

Entry must be positive.

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Miscellaneous itemized deductions such as, investment advisory fees, subscriptions to investment advisory publications and the cost of safe deposit boxes are reported on Line 10a in Part II of Form 1065-B.

Entry must be positive.

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The deductible amount of the miscellaneous itemized deductions (30% of Line 10a) is reported on Line 10b in Part II of Form 1065-B.

Entry must be positive.

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