Page 190 - Individual Forms & Instructions Guide

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deductions on Schedule E. Rental real ties on any reportable transaction under- Line A 13:32 - 25-Jan-2023
estate income is not generally included statements. The following are reportable
in net earnings from self-employment transactions. Describe the business or professional ac-
subject to self-employment tax and is • Any listed transaction that is the tivity that provided your principal
generally subject to the passive loss lim- same as or substantially similar to tax source of income reported on line 1. If
itation rules. Electing qualified joint avoidance transactions identified by the you owned more than one business, you
venture status does not alter the applica- IRS. must complete a separate Schedule C for
tion of the self-employment tax or the • Any transaction offered to you or a each business. Give the general field or
passive loss limitation rules. related party under conditions of confi- activity and the type of product or serv-
More information. For more informa- dentiality for which you paid an advisor ice. If your general field or activity is
tion on qualified joint ventures, go to a fee of at least $50,000. wholesale or retail trade, or services
IRS.gov/QJV. • Certain transactions for which you connected with production services
or a related party have contractual pro- (mining, construction, or manufactur-
Community Income tection against disallowance of the tax ing), also give the type of customer or
benefits. client; for example, “wholesale sale of
If you and your spouse wholly own an • Certain transactions resulting in a hardware to retailers” or “appraisal of
unincorporated business as community loss of at least $2 million in any single real estate for lending institutions.” For
property under the community property tax year or $4 million in any combina- nonstore retailers, select the PBA code
laws of a state, foreign country, or U.S. tion of tax years. (At least $50,000 for a by the primary product that your estab-
possession, you can treat your wholly single tax year if the loss arose from a lishment sells. For example, establish-
owned, unincorporated business as a foreign currency transaction defined in ments primarily selling prescription and
sole proprietorship, instead of a partner- section 988(c)(1), whether or not the non-prescription drugs, select PBA code
ship. Any change in your reporting posi- loss flows through from an S corpora- 456110 Pharmacies & drug retailers.
tion will be treated as a conversion of tion or partnership.)
the entity. • Certain transactions of interest en- Line B
Report your income and deductions tered into that are the same or substan-
as follows. tially similar to one of the types of trans- Enter on line B the six-digit code from
• If only one spouse participates in actions that the IRS has identified by the Principal Business or Professional
the business, all of the income from that published guidance as a transaction of Activity Codes chart at the end of these
business is the self-employment earn- interest. instructions. For nonstore retailers, se-
ings of the spouse who carried on the lect the PBA code by the primary prod-
See the Instructions for Form 8886
business. for more details. uct that your establishment sells. For ex-
• If both spouses participate, the in- ample, establishments primarily selling
come and deductions are allocated to the Capital Construction Fund prescription and non-prescription drugs,
spouses based on their distributive Do not claim on Schedule C the deduc- select PBA code 456110 Pharmacies &
shares. tion for amounts contributed to a capital drug retailers.
• If either or both spouses are part- construction fund set up under chap-
ners in a partnership, see Pub. 541. ter 535 of title 46 of the United States Line D
• If both spouses elected to treat the Code. Instead, reduce the amount you Enter on line D the EIN that was issued
business as a qualifying joint venture, would otherwise enter on Form 1040 or to you on Form SS-4. Do not enter your
see Qualified Joint Venture, earlier. SSN on this line. Do not enter another
1040-SR, line 15, by the amount of the
States with community property laws deduction. Next to line 15, enter “CCF” taxpayer's EIN (for example, from any
include Arizona, California, Idaho, Lou- and the amount of the deduction. For de- Forms 1099-MISC that you received). If
isiana, Nevada, New Mexico, Texas, tails, see Pub. 595. you do not have an EIN, leave line D
Washington, and Wisconsin. See Pub. blank.
555 for more information about com- Additional Information
You need an EIN only if you have a
munity property laws. See Pub. 334 for more information for qualified retirement plan or are required
Reportable Transaction small businesses. to file employment, excise, alcohol, to-
Disclosure Statement bacco, or firearms returns, or are a payer

Use Form 8886 to disclose information Specific of gambling winnings. If you need an
EIN, see the Instructions for Form SS-4.
you participated. Form 8886 must be Instructions Single-member LLCs. If you are the
for each reportable transaction in which
filed for each tax year that your federal Filers of Form 1041. Do not complete sole owner of an LLC that is not treated
income tax liability is affected by your the block labeled “Social security num- as a separate entity for federal income
participation in the transaction. You may ber (SSN).” Instead, enter the EIN is- tax purposes, enter on line D the EIN
have to pay a penalty if you are required sued to the estate or trust on line C. that was issued to the LLC (in the LLC's
to file Form 8886 but do not do so. You legal name) for a qualified retirement
may also have to pay interest and penal- plan, to file employment, excise, alco-
hol, tobacco, or firearms returns, or as a

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