2017 Schedule K-1 Instructions and Graphic Guide …

1 K-1 Entries and Where They Go )7 You will need Forms 8586, 8582CR and 3800 to claim the credit. You will also need to complete form 6251 if you have not already done so as part of completing these form 8586 part I, line 4. Please enter the EIN and thePlease enter the amount from line 15A and 15B of the K-1 Wor ksheet for For m 8582-CR Par t III, Line 27 and Par t IV, Line 35 Passive Activity Credit Limitation For m Par t III, Line 27 First complete lines 21 through 26 of form 8582-CR. If your adjusted gr oss income (A GI) is less than $200,000 and you ar e not deducting losses from rental real estate with active participation (see Par t II of form 8582), enter $25,000 on line The amount on line 27 is computed as follows: A. Taxable income .. B. Tax on line A* .. C. Enter amount from form 8582-CR, line 26 .. D. Subtract line C from line A .. E. Tax on line D*.

2 F. Subtract line E from line B and enter the result on form 8582-CR, line 27 .. *F or form 1040, use the Tax Table, Tax Computation Wor ksheet, the Qualified Dividends and Capital Gain Tax Wor ksheet, or the Schedule D Tax Wor ksheet, whichever applies. For form 1041, use the Tax Rate Schedules, Qualified Dividends Tax Wor ksheet, or Schedule D, whichever applies. Par t IV, Line 35 The amount on line 35 is computed as follows: A. Taxable income .. B. Tax on line A above .. C. Taxable income on Line A less amount from form 8582, line 10, 14, and $25,000 .. D. Tax on line E. Line B minus line D .. latot eht retne dna RC-4858 mroF fo 03 dna 61 senil ddA .F G. Line E minus line F enter this on line 35 of form 8582-CR .. 1 For pr operties placed in service prior to 1990 the $25,000 allowance is reduced by 50% of AGI over $200,000 and is eliminated when AGI ex ceeds $250,000.

3 The $25,000 allowance is also reduced for any losses deducted under the special allowance for rental real estate with active participation (which would appear on line 10 of form 8582). Dear WNC Investor, We are pleased to provide you with your 2017 tax credit package. This package includes your Schedule K-1, this instructional Guide and a copy of the privacy policy. Tax credits are complex. We are providing this Guide as a basic tool for you to use in the preparation of your tax return. However, because each investor has unique circumstances, we recommend that you consult with your tax advisor regarding this information before submitting your tax return. Since its inception in 1987 and continuing to this day, the Low Income Housing Tax Credit program has been a major source of housing. WNC has been at the forefront of this program, acquiring properties and raisin g funds.

4 We now have more than 1200tax credit properties across the issue in our nation. Your investment not housing for working class families and you for being a part of this ,WNC & Associates, Inc. 2017 Schedule K-1 Instructions and Graphic Guide (714) 662-5565 x 600 17782 Skypark CircleIrvine, California 92614-6404 12) If some of the cr edits ar e suspended on form 3800, it may be possible to carry the unused cr edits to the prior tax return through the use of form 1045. You will pr obably need to consult with a competent tax pr ofessional for assistance in pr eparing this form . 13) If you ar e not deducting any passive losses fr om this activity, enter zer o on Line 19 of form 6251 - Alternative Minimum Tax - Individuals. If you ar e deducting the passive losses, see the Instructions for form 6251, Line 19 to determine the amount to be entered on that line.

5 (P lease consult with your tax advisor if this applies to you.) 14) Item L - Reconciliation of Par tner s Capital Account and Adjusted Basis on your Schedule K-1 is for informational purposes only and is a reconciliation of your capital account. The capital account represents tax capital and is not indicative of fair market val ue , nor do es it neces sarily represent your tax basis. This section is not used in preparing your tax return. 15) Item K - Partner s share of liabilities at year end- on yourSchedule K-1 represents your proportionate share of theliabilities which is used in determining the adjusted tax basisCalifornia K-1 Entries and Where They Go 17) Line 2 - Net Income (Loss) From Rental Real Estate Activities may be used to offset passive income only and should be reported on form 3801 to determine ho w much of the loss is allowable.

6 18) Line (5) - Interest income is the same as the Federal amount and no California adjustment is required. 19) Lines 17(a) (b) or (c) Tax Preference Items should be reported on Sch edule P - Alternative Minimum Tax. Ple as e consult your tax advisor if you ar e subject to the California Minimum Tax. )1 Line 2-Net Income (Loss) From Rental Real Estate Activities (see A) is entered on worksheet 3, column aof form 8582 if line 2 shows net income and column b of form 8582 if line 2 shows a loss and carried to lines 3a and 3b respecti vely. Be sure to bring any prior year suspended losses forward to worksheet 3, column )2 orm 8582 accumulates all your passi ve income and lo ss and determines ho w much of the loss you can deduct in the curren t year. Any unused passive loss may be carried fo rward indefinitely and allo wed as a deduction against passive income in future years.

7 3 Line 5 - Interest Income (see B) and the name of thePartnership is entered on Line 1, Part I of Schedule B. )4 Line 11E or Line 11F - Cancellation of Debt (see D) The cancellation of debt income should be reported as passive activity income and added to form 8582, Par t I line 3a, and also carried to form 1040, line 21. )5 Line 13D Charitable Contributions Report this amount, subject to the 30% AGI limitation, on line 17 of Schedule A (F orm 1040).)6 Line 15A or 15B Low-Income Housing Credit (see C) information about claiming the Low-Income Housing ) 9) Complete Lines 31 through 34 of form 8582CR and then complete the Line 35 worksheet. Enter the Line 37 amount on Par t II, line 33 of form 3800. 10) Before pr oceeding, you will need to complete form 6251. Please refer to the IRS Instructions if you have any questions about completing this form .

8 You must complete Par t II of form 3800. Carry the amount from Line 38 of Form3800 to Line 54 of form 1040 and check box 54 (a). )11 Line 17A - Depreciation Adjustment on Property Placed in Ser vice After 1986 represents your proportionate share of the Par tnership s depreciation calculation for income tax purposes in ex cess of depreciation calculated for alternative amount fr om Line 15A or 15B of the K-1 on Par t III, line 1d, column (b) and (c) of the form 3800. The amountshould also be included in Par t II, line 32. Please also enterthe amount from line 15A or 15B onto worksheet 3 of Form8582CR and complete li nes 3c and 5 through 7 of form ) Line 20Z - Total AMT/ACE Depreciation for CorporatePartnersAny Information needed by certain corporatepartners to compute the adjusted current earnings (ACE) the Instructions for form 8582CR for additionalPlease of your interests in the Partnership at December 31, K-1 Instructions and Graphic Guide form 8582-CR (Rev.

9 January 2017)Department of the Treasury Internal Revenue ServicePassive Activity Credit Limitations See separate Instructions . Attach to form 1040 or No. 1545-1034 Attachment Sequence No. 89 Name(s) shown on returnIdentifying numberPart IPassive Activity CreditsCaution: If you have credits from a publicly traded partnership, see Publicly Traded Partnerships (PTPs) in the From Rental Real Estate Activities With Active Participation (Other Than Rehabilitation Credits and Low-Income Housing Credits) (See Lines 1a through 1c in the Instructions .)a 1 Credits from Worksheet 1, column (a)..1a b Prior year unallowed credits from Worksheet 1, column (b)..1bc Add lines 1a and Rehabilitation Credits From Rental Real Estate Activities and Low-Income Housing Credits for Property Placed in Service Before 1990 (or From Pass-Through Interests Acquired Before 1990) (See Lines 2a through 2c in the Instructions .

10 A 2 Credits from Worksheet 2, column (a)..2a b Prior year unallowed credits from Worksheet 2, column (b)..2bc Add lines 2a and Low-Income Housing Credits for Property Placed in Service After 1989 (See Lines 3a through 3c in the Instructions .)3aCredits from Worksheet 3, column (a)..3a b Prior year unallowed credits from Worksheet 3, column (b)..3bc Add lines 3a and All Other Passive Activity Credits (See Lines 4a through 4c in the Instructions .)a 4 Credits from Worksheet 4, column (a)..4a b Prior year unallowed credits from Worksheet 4, column (b)..4bc Add lines 4a and 5 Add lines 1c, 2c, 3c, and 6 Enter the tax attributable to net passive income (see Instructions )..6 7 Subtract line 6 from line 5. If line 6 is more than or equal to line 5, enter -0- and see Instructions 7 Note: If your filing status is married filing separately and you lived with your spouse at any time during ( Note.)