Sch K-1, Page 1

Note: Other liabilities are not allocated to limited partners or limited liability company members unless option to do so is selected on the General Options worksheet, Schedule K-1 Calculation Options section. To specially allocate use allocation code 7513.

Calculated (print Sch K-1, Item L reconciliation statement on General Options worksheet, Schedule K-1 Print Options section or view the reconciliation by using the expand option). This is the difference between the total of the income amounts on line 1 through 11 and the tax exempt interest income and other tax exempt income on lines 18a and 8b and the total of the deductions amounts on lines 12, 13 and the total taxes on line 16p and 16q and nondeductible expenses on line 18c.

To exclude the section 743(b) adjustments or section 754 adjustments or both, an entry will need to be made in Partners > General options > Schedule K-1 Options > Other Calculation Options > Line 29 or in the Return Configuration Set > Miscellaneous options > Reserved for future use 2.

Below are the list of codes available to be used:

Code 1 : Include section 743(b) adjustments in current year net income (loss) amounts - This is the default option and will include the section 743(b) adjustments in the calculation of the current year net income(loss).

Code 2 : Exclude section 743(b) adjustment from item L - The section 743(b) adjustments will not be included in the calculation of the current year net income(loss) and the current year net income and ending capital amounts will increase or decrease depending on whether the section 743(b) adjustment is a positive or negative income adjustment. This would also be reflected on the current year net income and increase(decrease) statement where the other income or other deduction amount would change.

Code 3 : Include Section 743(b) adjustment in other increase (decrease) - The section 743(b) adjustments will be included in the calculation of the other increase (decrease) amount and excluded from the calculation of the current year net income(loss), so the current year net income (loss) amount will increase or decrease depending on whether the section 743(b) adjustment is a positive or negative income adjustment and the other increase (decrease) amount will increase or decrease in the opposite way. These changes will also be reflected on the current year net income and increase(decrease) statement where the other income or other deductions amount will also change and the section 743(b) adjustments will be reported as separate items under the other increase(decrease) items on the statement.

Code 4 : Exclude both section 743(b) adjustment and section 754 adjustments from item L - The section 743(b) adjustments will be excluded from the calculation of the other increase (decrease) amount and current year net income(loss), so the current year net income(loss) and ending capital amounts will increase or decrease depending on whether the section 743(b) adjustment is a positive or negative adjustment and a section 754 adjustment is present.

Code 5 : Include both Section 743(b) and 754 adjustments in other increase (decrease) - The section 743(b) and 754 adjustments will be included in the calculation of the other increase (decrease) amount and excluded from the current year net income(loss). The current year net income (loss) will increase or decrease depending on whether the section 743(b) adjustment is a positive or negative adjustment and section 754 adjustments are present on Line 13W and the other increase (decrease) amount will increase or decrease the opposite way. These changes will also be reflected on the current year net income and increase (decrease) statement.

Code 6 : Include Section 754 adjustments in other increase (decrease) - The section 754 adjustments from line 13w will be included in the calculation of the other increase (decrease) amount and excluded from the calculation of the current year net income(loss). These changes will also be reflected on the current year net income and increase(decrease) statement.

To exclude the guaranteed payments and health insurance payments, an entry will need to be made in Partners > General options > Schedule K-1 Options > Other Calculation Options > Line 30 or in Office Manager/RCS > Miscellaneous options > Reserved for future use 1.

Below are the list of codes available to be used

Code 1: Include all guaranteed payments in current year net income amounts - This is the default option and will include all guaranteed payments in the calculation of the current year net income(loss).

Code 2: Exclude all guaranteed payments from Schedule K-1, Item L and Schedule M-2 - No guaranteed payments will be included in the calculation of the current year net income(loss).

Code 3: Exclude guaranteed payments for services from Schedule K, Item L and Schedule M-2 – The guaranteed payments for services will be excluded from the calculation of the current year net income (loss).

Option 4: Exclude guaranteed payments for capital from Schedule K, Item L and Schedule M-2 - The guaranteed payments for capital will be excluded from current year net income (loss) .

Calculated (print Sch K-1, Item L reconciliation statement on General Options worksheet, Schedule K-1 Print Options section or view the reconciliation by using the expand option).

To include the section 743(b) adjustments or section 754 adjustments or both, an entry will need to be made in Partners > General options > Schedule K-1 Options > Other Calculation Options > Line 29

Calculated (sum of the excess allowable tentative depletion for each non oil and gas property over the adjusted basis of that property reported on each partner's depletion schedules and sum of the allowable tentative depletion for each oil and gas property not exceeding the adjusted basis of that property reported on each partner's depletion schedules)