Specific Instructions

Note:   Organizers of tax shelters under section 6111(c) must complete Parts I, II, and III and organizers of a confidential corporate tax shelter must complete Parts I and IV. If a confidential corporate tax shelter also meets the definition of a tax shelter under section 6111(c), the organizer must complete all parts of the form.

Part I

The tax shelter name will be that of the tax shelter entity if the entity has an employer identification number separate from that of a principal organizer registering the transaction. If the tax shelter consists of Schedule C (Form 1040) or Schedule F (Form 1040) activities and there is no tax shelter entity, provide the name, address, identifying number, and the daytime telephone number of the principal organizer in the left block of Part I. In that case, if you are the principal organizer, the information will be the same in both blocks of Part I.

If you are not a principal organizer, enter the information as it relates to you in the right block. In addition, check the box in the right block and separately provide the name, address, identifying number, and the daytime telephone number of a principal organizer.

Item 1a.   Check the box that describes the tax shelter organization or structure. If you check the Other box, specify the type of organization or structure in the space provided.

Item 1b.   For tax shelters under section 6111(c), indicate by checking the appropriate box whether the tax shelter is subject to registration because similar investments have been aggregated to form a substantial investment. The Yes box should be checked whether or not separate Forms 8264 are filed for the separate investments aggregated to create a substantial investment. For confidential corporate tax shelters, check Yes if transactions have been aggregated on the same Form 8264.

Tax shelters under section 6111(c).    A separate Form 8264 must be completed for each separate investment, aggregated to create a substantial investment, that differs from the other investments so aggregated with respect to any of the following:

1. Principal asset.
2. Accounting methods.
3. Federal or state agencies with which the investment is registered or with which an exemption notice is filed.
4. Methods of financing the purchase of a minimum investment unit.
5. Tax shelter ratio.

Do not file separate Forms 8264 for aggregated investments if the investments do not differ for any of the above. You should attach a separate statement to each Form 8264 that shows the name, address, identifying number, and telephone number of all such aggregated investments, whether or not separate Forms 8264 are required to be filed.

Note:   If possible, all separate forms relating to aggregated investments should be filed together.

Confidential corporate tax shelters.    Similar to tax shelters under section 6111(c), transactions involving similar assets, plans, and arrangements that are offered to corporate investors by the same person or related persons are aggregated and considered part of the same tax shelter. However, all transactions that are part of the same confidential corporate tax shelter and that are to be carried out by the same corporate participant must be registered on the same Form 8264. See Temporary Regulations section 301.6111-2T(e)(2) for details.

Items 2a and 2b.   Enter in item 2a the six-digit code from the chart beginning on page 9 for the principal business activity of the tax shelter. Where two or more activities are relevant to the operation of the tax shelter, enter in item 2a the code that most specifically describes the operation of the tax shelter; in item 2b, enter the code for the secondary activity. Enter N/A only if no other types of activities or transactions are occurring.

Item 3a.   Describe the principal asset of the tax shelter (e.g., a building, a computer, a patent, or livestock) acquired or to be acquired. If the tax shelter has more than one asset, the principal asset is the one with the largest adjusted basis. For purposes of completing this item, treat a building and the underlying land as one asset. Blind pools should also specify the asset to be acquired.

Item 3b.   Check the appropriate box to indicate whether the principal asset was acquired by the tax shelter from a party that is related (within the meaning of section 465(b)(3)(C)) to either the tax shelter or a principal organizer. Check Yes if any part of the principal asset is acquired from a related party (e.g., one piece of equipment out of ten, when the ten pieces of equipment constitute the tax shelter's principal asset).

Item 3c(1).   Enter the total cost (actual or projected) of the principal asset of the tax shelter. Use only the costs of acquiring the asset itself. Do not include any costs associated with the use of the asset. If the tax shelter did not purchase the principal asset, enter the tax shelter's basis in the asset.

Item 3c(2).   If the principal asset, or any part of it, was acquired by the tax shelter from a related party (i.e., the Yes box is checked in item 3b), enter the cost of the principal asset, or the appropriate part of it, when it was first acquired from an unrelated party. If the entire principal asset was acquired by the tax shelter from an unrelated party (i.e., the No box is checked in item 3b), leave this item blank.

Item 3d.   Check the Yes box if the principal asset of the tax shelter is or will be located outside the United States and enter its location in the space provided. Check the No box if the principal asset is located in the United States and make no entry in the country space.

Item 3e.   If the principal asset is acquired by more than one means (e.g., if part is purchased and part is constructed), check all the boxes that apply. If it is acquired in whole or in part by a means other than purchase, construction, or lease, check the Other box and specify the means of acquisition in the space provided.

Item 3f(1).   Enter the date the principal asset was acquired by the tax shelter, or the expected acquisition date if the asset has not been acquired by the date the tax shelter is registered. If the principal asset was acquired from a party who is related to the tax shelter or a principal organizer (i.e., the Yes box in item 3b is checked), enter the date the asset was first acquired from an unrelated party.

Item 3f(2).   Enter the date the principal asset was placed in service by the tax shelter, or the expected date if the asset has not been placed in service by the date the tax shelter is registered.

Item 4.   Enter the accounting method used by the tax shelter. Check only one box. Check Hybrid only if the accounting method is a combination of the cash and accrual methods. If you check Other, enter a description in the space provided.

Note:   In general, tax shelters cannot use the cash method.

Item 5a.   Check the appropriate box to show whether the tax shelter is required to register with Federal or state agencies regulating securities.

Item 5b.   Check the appropriate box to show, in the case of a tax shelter exempt from registration with Federal or state agencies regulating securities, whether the filing of a notice of such exemption is required.

Note:   If a tax shelter is not exempt from registration, check the No box.

Item 5c.   If you checked the Yes box in either item 5a or 5b, complete items 5c(1) and 5c(2) as applicable. In item 5c(1) check the appropriate boxes for Federal agencies regulating securities. In item 5c(2) enter the states in which the tax shelter is registered with agencies regulating securities, or with which a notice of exemption from securities registration is filed. If the tax shelter is required to register or file an exemption notice in more than five states, enter the five such states in which the highest aggregate amounts are expected to be realized.

Item 6.   If you (or any person related to you as defined in section 465(b)(3)(C)) were a principal organizer or participated in the organization of other tax shelters that were registered, but you were not the filer of Form 8264 for such other shelters, enter in the space provided the tax shelter registration numbers of up to the five most recently registered of those tax shelters. For example, assume that individuals P and M (a person related to P) participate in the organization of Tax Shelter I, and individuals P and D participate in the organization of Tax Shelter II. Also assume that M files a Form 8264 for Tax Shelter I, and D files a Form 8264 for Tax Shelter II. If P were subsequently a participant in the organization of Tax Shelter III and P filed the Form 8264 for Tax Shelter III, P would be required to enter the registration numbers for Tax Shelter I and Tax Shelter II in item 6 of the Form 8264 filed for Tax Shelter III.

Item 8.   Attach additional pages if more space is needed. Confidential corporate tax shelters must also attach any written materials that are presented to potential participants in connection with the offering of sales of interests in the tax shelter, including any analyses or opinions relating to the intended tax benefits of the shelter.

Part II

Item 9a.   The entries in this item summarize the methods of financing that the tax shelter makes available to investors to purchase a minimum investment unit. For purposes of Item 9a, a minimum investment unit is the minimum investment that may be purchased by an investor in the tax shelter and may consist of single, multiple, or fractional units as represented in any offering material. For example, if a prospectus states that subscriptions in a limited partnership will be offered in units of $5,000 each with a minimum subscription of five units per subscriber, the minimum investment unit is $25,000. If there is no minimum investment unit represented, the minimum investment unit is the cost of a typical investment purchased by an individual investor.

Note:   If the tax shelter is a limited partnership, complete items 9a through 11e by providing information concerning the minimum investment unit of a limited partner.

1. Cash.    If applicable, check this box and enter in the space provided the minimum amount of cash that is unconditionally required to be contributed or paid by the purchaser of a minimum investment unit during the first 5 years of the tax shelter.

2. Property contributions.    If applicable, check this box and enter in the space provided the adjusted basis of any property expected to be contributed by the purchaser of a minimum investment unit during the first 5 years of the tax shelter.

3. Recourse debt.    If recourse debt that is available to the purchaser of a minimum investment unit will reduce the investment base, check this box and enter in the space provided the maximum amount of such debt.

4. Nonrecourse debt.    If nonrecourse debt that is available to the purchaser of a minimum investment unit will reduce the investment base, check this box and enter in the space provided the maximum amount of such debt.

5. Other.    If applicable, check this box and enter in the space provided the maximum amount of any financing that the purchaser of a minimum investment unit can obtain under any other financing method. Also, describe such other financing method in the space provided.

Item 9a(6).   Add items 9a(1) through 9a(5). This should be the total acquisition cost for a minimum investment unit. If it is not, provide an explanation. For example, if the cost of a minimum investment unit is $50,000, with the purchaser putting $5,000 cash down and financing the remaining $45,000 with a nonrecourse loan repayable over 5 years, $5,000 is entered in item 9a(1), $45,000 is entered in item 9a(4), and $50,000 is the total shown in item 9a(6).

Item 9b.   Enter in the boxes corresponding to the types of financing specified in items 9a(3) through 9a(5) the maximum period of time (in whole years) over which such borrowed amounts may be repaid.

Item 9c.   If applicable, check the appropriate box to indicate whether any of the investor's financing is expected to be collateralized by one or more letters of credit or whether any of the tax shelter's financing is expected to be collateralized by letters of credit executed by the investors.

Item 9d.   If applicable, check the box marked Unrelated party and enter the maximum percentage of the financing included in item 9a that may be borrowed by an investor from a party who is not the tax shelter, a participating person, or a related person (as defined in section 465(b)(3)(C)), but which reduces the investment base because it will be arranged by the tax shelter, a participating person, or a related person.

If applicable, check the box marked Related party and enter the maximum percentage of the financing included in item 9a that is expected to be borrowed by an investor from the tax shelter, a participating person, or a related person, and which reduces the investment base.

Item 9e.   If no foreign-connected financing is available, check the box. See the instructions for line 24(3) of the Tax Shelter Ratio Computation for the definition of foreign-connected financing. If any of the financing included in item 9a is foreign-connected financing, enter the maximum dollar amount of such financing and the foreign country, foreign possession, or U.S. possession in which the lender is located. If foreign-connected financing is available from more than one foreign country, foreign possession, or U.S. possession, enter in the right-hand space the country, foreign possession, or U.S. possession from which the greatest dollar amount of such financing is available and the portion (in dollars) of the amount entered in the left-hand space that is available from such country or possession.

Items 10a and 10b.   Enter the dollar amount of gross deductions under subtitle A of the Code represented as potentially allowable over the first 5 years to the purchaser of a minimum investment unit in the tax shelter. In addition, from the list below, enter in 10b the codes for the two largest deductions, in dollar terms, represented as being potentially allowable to an investor in the tax shelter.

01	Amortization
02	Charitable contributions
03	Demolition expenses
04	Depletion - oil and gas
05	Depletion - other
06	Depreciation
07	Feed expenses
08	Consulting fees
09	Loan placement fees
10	Management fees
11	Marketing fees
12	Fees - other
13	Financing charges
14	Guaranteed payments
15	Intangible drilling costs
16	Interest expense
17	Legal expenses
18	Mining development costs
19	Ordinary loss from sale of an asset
20	Rehabilitation expenses
21	Rental expenses
22	Research and experimental expenditures
23	Royalties - oil, gas, and mineral
24	Royalties - other
25	Soil and water conservation expenditures
99	Other

Items 10c and 10d.   Enter in 10c the dollar amount of total credits under subtitle A of the Code represented as potentially allowable over the first 5 years to the purchaser of a minimum investment unit in the tax shelter. Also, from the list below, enter in 10d the codes for the two largest credits, in dollar terms, represented as being potentially allowable to an investor in the tax shelter.

01	Energy credit (section 48(a))
02	Credit for increasing research activities (section 41)
07	Orphan drug credit (section 45C)
08	Rehabilitation credit (section 47)
09	Low-income housing credit (section 42)
99	Other

Items 11a-11e.   Enter the highest tax shelter ratio for any investor as of the close of each of the first 5 years of the tax shelter. For this purpose, general partners in a limited partnership will not be treated as investors in the partnership if the aggregate interest of all general partners in each item of partnership income, gain, loss, deduction, and credit for such year is not expected to exceed 2%. If the general partner is treated as an investor and the tax shelter ratio for the general partner as of the close of any of the first 5 years of the tax shelter exceeds the highest tax shelter ratio for any limited partner for such year, the tax shelter organizer also must attach a statement to Form 8264 providing the information requested in items 9a through 11e for the minimum investment unit of a general partner.

Use the Tax Shelter Ratio Computation on page 2 of Form 8264 to figure the tax shelter ratio for any investor for each of the first 5 years of the tax shelter. See the instructions for Part III on this page. Figure the tax shelter ratio to two decimal places, rounded off. For example, if line 28, column (a) of the worksheet is 6.654, enter 6.65 in item 11a on page 1 of the form; if line 28, column (b) is 14.735, enter 14.74 in item 11b.

Item 12.   Enter the maximum aggregate amount to be received from the sale of investment units in the tax shelter, as represented in any offering material. If there is no maximum aggregate amount, enter the aggregate amount reasonably expected to be received from the sale of investment units.

Item 13a.   Enter the maximum number of investors that potentially can participate in the tax shelter, as represented in any offering material. If there is no maximum number of investors, enter the number of investors reasonably expected to participate in the tax shelter. If investors are required to purchase multiple units, or are permitted to purchase fractional units, attach an explanation, including the numbers of investors expected in all three categories (i.e., single, multiple, and fractional units).

Item 13b.   Enter the maximum number of investment units in the tax shelter that potentially can be sold, as represented in any offering material. If there is no maximum number represented, enter the number reasonably expected to be sold.

Part III

Gross deductions and total credits.   For purposes of the tax shelter ratio, the deductions and credits to be taken into account are gross deductions and total credits potentially allowable for the investment. They are not offset or reduced by any income derived or to be derived from the investment, any potential tax liability resulting from the investment, any potential recapture of deductions or credits, or any deductions or credits that may not be currently allowable because of the passive activity limitations.

Interest.   Interest on a debt obligation incurred to acquire a tax shelter interest is taken into account if the deduction for such interest is explicitly represented as being allowable. Also, interest on any debt obligation, the proceeds of which reduce the investment base, is taken into account regardless of whether a deduction for such interest is specifically represented as being allowable. See the instructions for line 24 of this worksheet for information on debts that reduce the investment base.

Aggregated investments.   In the case of aggregated investments for which multiple Forms 8264 must be completed (see the instructions for item 1b), compute for each separate Form 8264 the highest tax shelter ratio for an investor in the investments to which such Form 8264 relates. Enter this ratio in the appropriate space for item 11 of each of the separate Forms 8264.

Line 14.   Enter the amount of gross deductions represented as being potentially allowable to the investor for the particular year.

Line 21.   Enter the amount of cash to be contributed by the investor.

Line 22.   Enter the adjusted basis of property (reduced by any liability to which the property is subject) to be contributed by the investor.

Line 24.   Enter the sum of the following five items:

1. Any amount (whether recourse or nonrecourse) borrowed by the investor from a participating person, or from any person related (as defined in section 465(b)(3)(C)) to a participating person, unless the amount is unconditionally required to be repaid by the investor before the close of the year for which the determination is being made. A participating person is one who participated in the organization, sale, or management of the investment or who has an interest (other than an interest as a creditor) in the investment. An amount is unconditionally required to be repaid only if any offering material in which the amount is described and any agreement relating to the amount so provides.

   Amounts that are not considered as unconditionally required to be repaid, and therefore reduce the investment base, include:

   • An amount that is to be repaid only from the earnings of the investment.
   • An amount that will be, or is expected to be, reloaned to the investor during the 5-year period ending after the date the investment is offered for sale.
2. Any amount (whether recourse or nonrecourse) borrowed from any person if the loan is arranged by a participating or related person, unless the amount is unconditionally required to be repaid by the investor before the close of the year for which the determination is being made. Any borrowing that is represented, either orally or in writing, as being available from a specific source will be treated as arranged by the participating or related person, whether or not a commitment to provide the financing is made, if such person provides information to the lender relating to the investment or otherwise informs the lender about the investment. However, in the case of an amount borrowed on a recourse basis, the fact that a lender who is actively and regularly engaged in the business of lending money obtained information relating to the investment, from a participating or related person, solely in response to a lender's request made in connection with such borrowing, will not, by itself, result in a determination that the loan is arranged by a participating or related person.
3. Any amount borrowed, directly or indirectly, from a lender located outside the United States (foreign-connected financing) of which the participating or related person knows or has reason to know.
4. Amounts that are to be held for the benefit of investors in cash, cash equivalents, or marketable securities.
5. Any distributions of cash or property that will be made without regard to the income of the tax shelter, but only to the extent such distributions exceed the amount to be held as of the close of the year in cash, cash equivalents, or marketable securities.

Part IV

Line 29.   Enter the aggregate amount of fees that may be received by organizers of the tax shelter and any person related to such person under sections 267 and 707. For this purpose, the fees from all substantially similar transactions are considered part of the same tax shelter and must be aggregated. The fees include all consideration such persons may receive, including contingent fees, equity interests, and fees for other transactions received as consideration for promoting the tax shelter.

Line 30a.   A transaction is a listed transaction if the transaction is the same as or substantially similar to one of the types of transactions that the IRS has determined to be a tax avoidance transaction and identified by notice, regulation, or other form of published guidance as a listed transaction for purposes of section 6111. See Temporary Regulations section 301.6111-2T(b)(2). Also see Notice 2001-51, 2001-34 I.R.B. 190.

Who Must Sign

Tax shelter organizer.   Form 8264 must be signed by the tax shelter organizer.

Paid preparer's information.   If someone prepares Form 8264 and does not charge for it, that person should not sign the form.

Generally, anyone who is paid to prepare Form 8264 must sign it and fill in the other blanks in the Paid Preparer's Use Only area of the form.

The preparer required to sign Form 8264 must complete the required preparer information and:

• Sign it, by hand, in the space provided for the preparer's signature. Signature stamps or labels are not acceptable.
• Give the organizer a copy of Form 8264 in addition to the copy to be filed with the IRS.

The preparer should enter the daytime telephone number where he or she may be reached.

Business Activity Codes

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