Foreign Taxes

Lines 17a through 17h must be completed if the partnership has foreign income, deductions, or losses or has paid or accrued foreign taxes. See Pub. 514, Foreign Tax Credit for Individuals, for more information.

Line 17a - Name of Foreign Country or U.S. Possession

Enter the name of the foreign country or U.S. possession from which the partnership had income or to which the partnership paid or accrued taxes. If the partnership had income from, or paid or accrued taxes to, more than one foreign country or U.S. possession, enter See attached and attach a schedule for each country for lines 17a through 17h.

Line 17b - Gross Income From All Sources

Enter the partnership's gross income from all sources, including all U.S. and foreign source income.

Line 17c - Gross Income Sourced at Partner Level

Enter the total gross income of the partnership that is required to be sourced at the partner level. This includes income from the sale of most personal property other than inventory, depreciable property, and certain intangible property. See Pub. 514 and section 865 for details. Attach a schedule showing the following information:

• The amount of this gross income (without regard to its source) in each category identified in the instructions for line 17d, including each of the listed categories.
• Specifically identify gains on the sale of personal property other than inventory, depreciable property, and certain intangible property on which a foreign tax of 10% or more was paid or accrued. Also list losses on the sale of such property if the foreign country would have imposed a 10% or higher tax had the sale resulted in a gain. See Sales or Exchanges of Certain Personal Property in Pub. 514 and section 865.
• Specify the net foreign source capital gain or loss within each separate limitation category shown on page 19 in the instructions for line 17d(2). Also, in the case of noncorporate partners, separately identify the net foreign source gains or losses within each separate limitation category that are 28% rate gains or losses, unrecaptured section 1250 gains, and qualified 5-year gains.

Line 17d - Foreign Gross Income Sourced at Partnership Level

Separately report gross income from sources outside the United States by category of income as follows. For partnership and corporate partners only, attach a schedule identifying the total amount of foreign gross income in each category of income attributable to foreign branches. See Pub. 514 for information on the categories of income.

Line 17d(1).   Passive foreign source income.

Line 17d(2).   Attach a schedule showing the amount of foreign source income included in each of the following listed categories of income:

• Financial services income;
• High withholding tax interest;
• Shipping income;
• Dividends from each noncontrolled section 902 corporation;
• Dividends from a DISC, a former DISC, an IC-DISC, or a former IC-DISC;
• Distributions from a foreign sales corporation (FSC) or a former FSC;
• Section 901(j) income; and
• Certain income re-sourced by treaty.

Line 17d(3).   General limitation foreign source income (all other foreign source income).

Line 17e - Deductions Allocated and Apportioned at Partner Level

Enter on line 17e(1) the partnership's total interest expense (including interest equivalents under Temporary Regulations section 1.861-9T(b)). Do not include interest directly allocable under Temporary Regulations section 1.861-10T to income from a specific property. This type of interest is allocated and apportioned at the partnership level and is included on lines 17f(1) through (3). On line 17e(2), enter the total of all other deductions or losses that are required to be allocated at the partner level. For example, include on line 17e(2) research and experimental expenditures (see Regulations section 1.861-17(f)).

Line 17f - Deductions Allocated and Apportioned at Partnership Level to Foreign Source Income

Separately report partnership deductions that are apportioned at the partnership level to

1. passive foreign source income,
2. each of the listed foreign categories of income, and
3. general limitation foreign source income (see the instructions for line 17d).

See Pub. 514 for more information.

For partnership and corporate partners only, attach a schedule identifying the total amount of deductions apportioned to each category of income shown in the instructions for line 17d that are attributable to foreign branches.

Line 17g - Total Foreign Taxes

Enter in U.S. dollars the total foreign taxes (described in section 901 or section 903) that were paid or accrued by the partnership (according to its method of accounting for such taxes). Translate these amounts into U.S. dollars by using the applicable exchange rate (see Pub. 514).

Attach a schedule reporting the following information:

1. The total amount of foreign taxes (including foreign taxes on income sourced at the partner level) relating to each category of income (see instructions for line 17d).
2. The dates on which the taxes were paid or accrued, the exchange rates used, and the amounts in both foreign currency and U.S. dollars, for:
   • Taxes withheld at source on interest.
   • Taxes withheld at source on dividends.
   • Taxes withheld at source on rents and royalties.
   • Other foreign taxes paid or accrued.

Line 17h - Reduction in Taxes Available for Credit

Enter the total reductions in taxes available for credit.

Attach a schedule showing the reductions for:

• Taxes on foreign mineral income (section 901(e)).
• Taxes on foreign oil and gas extraction income (section 907(a)).
• Taxes attributable to boycott operations (section 908).
• Failure to timely file (or furnish all of the information required on) Forms 5471 and 8865.
• Any other items (specify).

Other

Lines 18a and 18b

Do not deduct or include qualified expenditures for intangible drilling and development costs as adjustments or tax preference items on Schedule K-1. Instead, enter on line 18a the type of expenditures claimed on line 18b. Enter on line 18b the qualified expenditures paid or incurred during the tax year to which an election under section 59(e) may apply. Enter this amount on each required Schedule K-1 whether or not any partner makes an election under section 59(e). If the expenditures are for intangible drilling and development costs, enter the month in which the expenditures were paid or incurred (after the type of expenditure on line 18a). If there is more than one type of expenditure included in the total shown on line 18b (or intangible drilling and development costs were paid or incurred for more than 1 month), report this information separately for each type of expenditure (or month) on an attachment to Schedules K and K-1.

The term qualified expenditures includes only the following types of expenditures paid or incurred during the tax year:

• Circulation expenditures.
• Research and experimental expenditures.
• Intangible drilling and development costs.
• Mining exploration and development costs.

Line 19 - Tax-Exempt Interest Income

Enter on line 19 tax-exempt interest income, including any exempt-interest dividends received from a mutual fund or other regulated investment company. Individual partners must report this information on line 8b of Form 1040. The adjusted basis of the partner's interest is increased by the amount shown on this line under section 705(a)(1)(B).

Line 20 - Other Tax-Exempt Income

Enter on line 20 all income of the partnership exempt from tax other than tax-exempt interest (e.g., life insurance proceeds). The adjusted basis of the partner's interest is increased by the amount shown on this line under section 705(a)(1)(B).

Line 21 - Nondeductible Expenses

Enter on line 21 nondeductible expenses paid or incurred by the partnership. Do not include separately stated deductions shown elsewhere on Schedules K and K-1, capital expenditures, or items the deduction for which is deferred to a later tax year. The adjusted basis of the partner's interest is decreased by the amount shown on this line under section 705(a)(2)(B).

Line 22 - Distributions of Money (Cash and Marketable Securities)

Enter on line 22 the total distributions to the partner(s) of cash and marketable securities that are treated as money under section 731(c)(1). Generally, marketable securities are valued at FMV on the date of distribution. However, the value of marketable securities does not include the distributee partner's share of the gain on the securities distributed to that partner. See section 731(c)(3)(B) for details.

If the amount on line 22 includes marketable securities treated as money, state separately on an attachment to Schedules K and K-1

1. the partnership's adjusted basis of those securities immediately before the distribution and
2. the FMV of those securities on the date of distribution (excluding the distributee partner's share of the gain on the securities distributed to that partner).

Line 23 - Distributions of Property Other Than Money

Enter on line 23 the total distributions to the partner(s) of property not included on line 22. In computing the amount of the distribution, use the adjusted basis of the property to the partnership immediately before the distribution. In addition, attach a statement showing the adjusted basis and FMV of each property distributed.

Line 24 (Schedule K Only)

Attach a statement to report the partnership's total income, expenditures, or other information for the items listed under Line 25 (Schedule K-1 Only) - Supplemental Information below.

Lines 24a and 24b (Schedule K-1 Only) - Recapture of Low-Income Housing Credit

If recapture of part or all of the low-income housing credit is required because:

1. prior year qualified basis of a building decreased, or
2. the partnership disposed of a building or part of its interest in a building, see Form 8611, Recapture of Low-Income Housing Credit.

The instructions for Form 8611 indicate when the form is completed and what information is provided to partners when recapture is required.

If a partner's ownership interest in a building decreased because of a transaction at the partner level, attach the necessary information for the partner to figure the recapture.

Report on line 24a the total low-income housing credit recapture with respect to a partnership treated under section 42(j)(5) as the taxpayer to which the low-income housing credit was allowed. Report any other low-income housing credit recapture on line 24b.

If the partnership filed Form 8693, Low-Income Housing Credit Disposition Bond, to avoid recapture of the low-income housing credit, no entry should be made on line 24 of Schedule K-1.

See Form 8586, Form 8611, and section 42 for more information.

Line 25 (Schedule K-1 Only) - Supplemental Information

Enter in the line 25 Supplemental Information space of Schedule K-1, or on an attached schedule if more space is needed, the partner's share of any information requested on lines 1 through 24b that must be reported in detail, and items 1 through 25 below. Identify the applicable line number next to the information entered in the Supplemental Information space. Show income or gains as a positive number. Show losses in parentheses.

1. Taxes paid on undistributed capital gains by a regulated investment company (RIC) or a real estate investment trust (REIT). As a shareholder of a RIC or a REIT, the partnership will receive notice on Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, of the amount of tax paid on undistributed capital gains.
2. The number of gallons of each fuel sold or used during the tax year for a nontaxable use qualifying for the credit for taxes paid on fuels, types of use, and the applicable credit per gallon. See Form 4136, Credit for Federal Tax Paid on Fuels, for details.
3. The partner's share of gross income from each property, share of production for the tax year, etc., needed to figure the partner's depletion deduction for oil and gas wells. The partnership should also allocate to the partner(s) a proportionate share of the adjusted basis of each partnership oil or gas property. The allocation of the basis of each property is made as specified in section 613A(c)(7)(D).

   The partnership cannot deduct depletion on oil and gas wells. The partner must determine the allowable amount to report on his or her return. See Pub. 535 for more information.

4. Recapture of section 179 expense deduction. For property placed in service after 1986, the section 179 expense deduction is recaptured at any time the business use of the property drops to 50% or less. Enter the amount that was originally passed through to the partners and the partnership's tax year in which the amount was passed through. State whether the recapture amount was caused by the disposition of the section 179 property. Do not include this amount in the partnership's income.
5. Recapture of certain mining exploration expenditures (section 617).
6. Any information or statements a partner needs to comply with section 6111 (registration of tax shelters) or section 6662(d)(2)(B)(ii) (regarding adequate disclosure of items that may cause an understatement of income tax).
7. The partner's share of preproductive period farm expenses, if the partnership is not required to use the accrual method of accounting. See Regulations section 1.263A-4.
8. Any information a partner needs to figure the interest due under section 453(l)(3). If the partnership previously had elected to report the disposition of certain timeshares and residential lots on the installment method, the partner's tax liability must be increased by the partner's allocable share of the interest on tax attributable to the installment payments received during the tax year.
9. Any information a partner needs to figure interest due under section 453A(c). If an obligation arising from the disposition of property to which section 453A applies is outstanding at the close of the year, report the partner's allocable share of the outstanding installment obligation to which section 453A(b) applies.
10. For closely held partnerships (as defined in section 460(b)(4)), state the information a partner needs to figure the partner's allocable share of any interest due or to be refunded under the look-back method of section 460(b)(2) on certain long-term contracts that are accounted for under either the percentage of completion-capitalized cost method or the percentage of completion method. Also attach the information specified in the instructions for Form 8697, Part II, lines 1 and 3, for each tax year in which such a long-term contract is completed.
11. Any information a partner needs relating to interest expense that the partner is required to capitalize. A partner may be required to capitalize interest expense incurred by the partner for the partnership's production expenditures. Similarly, a partner may have to capitalize interest that was incurred by the partnership for the partner's own production expenditures. See Regulations sections 1.263A-8 through 1.263A-15 for more information.
12. Any information a partner that is a tax-exempt organization may need to figure its share of unrelated business taxable income under section 512(a)(1) (but excluding any modifications required by paragraphs (8) through (15) of section 512(b)). Partners are required to notify the partnership of their tax-exempt status. See Form 990-T, Exempt Organization Business Income Tax Return, for more information.
13. Expenditures qualifying for the
    1. rehabilitation credit not related to rental real estate activities,
    2. energy credit, or
    3. reforestation credit.
    Complete and attach Form 3468. See Form 3468 and the related instructions for information on eligible property and the lines on Form 3468 to complete. Attach to each Schedule K-1 a separate schedule in a format similar to that shown on Form 3468 detailing the partner's share of qualified expenditures. Also indicate the lines of Form 3468 on which the partners should report these amounts.
14. Recapture of investment credit. Complete and attach Form 4255, Recapture of Investment Credit, when investment credit property is disposed of, or it no longer qualifies for the credit, before the end of the recapture period or the useful life applicable to the property. State the type of property at the top of Form 4255 and complete lines 2, 4, and 5, whether or not any partner is subject to recapture of the credit. Attach to each Schedule K-1 a separate schedule providing the information the partnership is required to show on Form 4255, but list only the partner's distributive share of the cost of the property subject to recapture. Also indicate the lines of Form 4255 on which the partners should report these amounts.
15. Any information a partner may need to figure the recapture of the qualified electric vehicle credit. See Pub. 535 for more information.
16. Recapture of new markets credit (see Form 8844).
17. Any information a partner may need to figure recapture of the Indian employment credit. Generally, if a partnership terminates a qualified employee less than 1 year after the date of initial employment, any Indian employment credit allowed for a prior tax year by reason of wages paid or incurred to that employee must be recaptured. For details, see section 45A(d).
18. Nonqualified withdrawals by the partnership from a capital construction fund.
19. Unrecaptured section 1250 gain. Figure this amount for each section 1250 property in Part III of Form 4797 (except property for which gain is reported using the installment method on Form 6252) for which you had an entry in Part I of Form 4797 by subtracting line 26g of Form 4797 from the smaller of line 22 or line 24 of Form 4797. Figure the total of these amounts for all section 1250 properties. Generally, the result is the partnership's unrecaptured section 1250 gain. However, if the partnership is reporting gain on the installment method for a section 1250 property held more than 1 year, see the next paragraph to figure the unrecaptured section 1250 gain on that property. Report the partner's distributive share of the total amount as Unrecaptured section 1250 gain.

    The total unrecaptured section 1250 gain for an installment sale of section 1250 property held more than 1 year is figured for the year of the sale in a manner similar to that used in the preceding paragraph. However, the total unrecaptured section 1250 gain must be allocated to the installment payments received from the sale. To do so, the partnership generally must treat the gain allocable to each installment payment as unrecaptured section 1250 gain until all such gain has been used in full. Figure the unrecaptured section 1250 gain for installment payments received during the tax year as the smaller of (a) the amount from line 26 or line 37 of Form 6252 (whichever applies) or (b) the total unrecaptured section 1250 gain for the sale reduced by all gain reported in prior years (excluding section 1250 ordinary income recapture). However, if the partnership chose not to treat all of the gain from payments received after May 6, 1997, and before August 24, 1999, as unrecaptured section 1250 gain, use only the amount the partnership chose to treat as unrecaptured section 1250 gain for those payments to reduce the total unrecaptured section 1250 gain remaining to be reported for the sale.

    If the partnership received a Schedule K-1 or Form 1099-DIV from an estate, a trust, a REIT, or a mutual fund (or other regulated investment company) reporting unrecaptured section 1250 gain, do not add it to the partnership's own unrecaptured section 1250 gain. Instead, report it as a separate amount. For example, if the partnership received a Form 1099-DIV from a REIT with unrecaptured section 1250 gain, report it as Unrecaptured section 1250 gain from a REIT.

    Also report as a separate amount any gain from the sale or exchange of an interest in another partnership attributable to unrecaptured section 1250 gain. See Regulations section 1.1(h)-1 and attach the statement required under Regulations section 1.1(h)-1(e).

20. If the partnership is a closely held partnership (as defined in section 460(b)(4)) and it depreciated certain property placed in service after September 13, 1995, under the income forecast method, it must attach to Form 1065 the information specified in the instructions for Form 8866, line 2, for the 3rd and 10th tax years beginning after the tax year the property was placed in service. It must also report the line 2 amounts to its partners. See the instructions for Form 8866 for more details.
21. Any information a partner that is a publicly traded partnership may need to determine if it meets the 90% qualifying income test of section 7704(c)(2). Partners are required to notify the partnership of their status as a publicly traded partnership.
22. Amortization of reforestation expenditures. Report the amortizable basis and year in which the amortization began for the current year and the 7 preceding years. For limits that may apply, see section 194 and Pub. 535.
23. Any information needed by a partner to figure the interest due under section 1260(b). If any portion of a constructive ownership transaction was open in any prior year, the partner's tax liability must be increased by the partner's pro rata share of interest due on any deferral of gain recognition. See section 1260(b) for details, including how to figure the interest.
24. Commercial revitalization deduction from rental real estate activities. If the deduction is for a nonrental building, its deducted by the partnership on line 20. See the instructions for line 20 for details.
25. Any other information a partner may need to file his or her return that is not shown anywhere else on Schedule K-1. For example, if one of the partners is a pension plan, that partner may need special information to properly file its tax return.

Schedule L - Balance Sheets per Books

Important:   If the foreign partnership filed Form 1065 or 1065-B, do not complete Schedule L on Form 8865. Instead, attach to Form 8865 a copy of the Schedule L from Form 1065 or 1065-B.

Only Category 1 filers are required to complete Schedule L. If you answered "Yes" to question G9 on page 1 of Form 8865, you do not have to complete Schedule L. Schedule L requires balance sheets prepared and translated into U.S. dollars in accordance with U.S. generally accepted accounting principles (GAAP).

Exception.   If the partnership or any qualified business unit of the partnership uses the dollar approximate separate transactions method (DASTM), Schedule L should reflect the tax balance sheets prepared and translated into U.S. dollars according to Regulations section 1.985-3(d).

Schedule M - Balance Sheets for Interest Allocation

All Category 1 filers must complete Schedule M. Schedule M should reflect the book values of the partnership's assets as described in Temporary Regulations sections 1.861-9T(g)(2) and 1.861-12T. Assets should be characterized as U.S. assets or foreign assets in one or more separate limitation categories as provided in Temporary Regulations sections 1.861-9T(g)(3) and 1.861-12T. The balance sheets should be prepared in U.S. dollars under Temporary Regulations section 1.861-9T(g)(2)(ii).

Exception.   If the partnership or any qualified business unit of the partnership uses DASTM, Schedule M should reflect the tax balance sheet prepared in U.S. dollars under Regulations section 1.985-3(d). See Temporary Regulations section 1.861-9T(g)(2)(ii)(A)(2) for more information on DASTM.

Line 2.   Enter the partnership's foreign assets according to the following income limitation categories:

• Passive income category.
• Listed categories (attach a statement classifying foreign assets by the categories listed in the instructions for line 17c).
• General limitation income category.

See the instructions for line 17 of Schedule K and section 904(d) for more information.

Schedule M-1 - Reconciliation of Income (Loss) per Books With Income (Loss) per Return

Important:   If the foreign partnership filed Form 1065 or 1065-B, do not complete Schedule M-1 on Form 8865. Instead, attach to Form 8865 a copy of the Schedule M-1 from Form 1065 or 1065-B.

Only Category 1 filers are required to complete Schedule M-1. If you answered "Yes" to question G9 on page 1 of Form 8865, you do not have to complete Schedule M-1.

Line 3 - Guaranteed payments.   Include on this line guaranteed payments shown on Schedule K, line 5 (other than amounts paid for insurance that constitutes medical care for a partner, a partner's spouse, and a partner's dependents).

Line 4b - Travel and Entertainment

Include on this line:

• The part of the cost of meals and entertainment not allowed under section 274(n).
• Expenses for the use of an entertainment facility.
• The part of business gifts over $25.
• Expenses of an individual allocable to conventions on cruise ships over $2,000.
• Employee achievement awards over $400.
• The part of the cost of entertainment tickets that exceeds face value (also subject to 50% disallowance).
• The part of the cost of skyboxes that exceeds the face value of nonluxury box seat tickets.
• The part of the cost of luxury water travel not allowed under section 274(m).
• Expenses for travel as a form of education.
• Nondeductible club dues.
• Other travel and entertainment expenses not allowed as a deduction.

Schedule M-2 - Analysis of Partners' Capital Accounts

Important:   If the foreign partnership filed Form 1065 or 1065-B, do not complete Schedule M-2 on Form 8865. Instead, attach to Form 8865 a copy of the Schedule M-2 from Form 1065 or 1065-B.

Only Category 1 filers are required to complete Schedule M-2. If you answered "Yes" to question G9 on page 1 of Form 8865, you do not have to complete Schedule M-2. Show what caused the changes in the direct partners' capital accounts during the partnership's tax year as reflected on the partnership's books and records. All items must be reported in U.S. dollars.

Though not required to, you may use the rules in Regulations section 1.704-1(b)(2)(iv) to determine the partners' capital accounts in Schedule M-2. If the beginning and ending capital accounts reported under these rules differ from the amounts reported on Schedule L, attach a statement reconciling any differences.

Line 2 - Capital contributed during year.   Include on line 2a the amount of money and on line 2b the amount of property contributed by each partner to the partnership as reflected on the partnership's books and records.

Line 3 - Net income (loss) per books.   Enter on line 3 the partnership's net income (loss) shown on the partnership's books, from Schedule M-1, line 1.

Line 6 - Distributions.  

Line 6a - Cash.   Enter the total amount of money distributed to each partner by the partnership.

Line 6b - Property.   Enter the total amount of property distributed to each partner by the partnership as reflected on the partnership's books and records.

Schedule N - Transactions Between Controlled Foreign Partnership and Partners or Other Related Entities

All Category 1 filers must complete all of Schedule N and report all transactions of the foreign partnership during the tax year of the partnership listed on the top of page 1 of Form 8865. A Category 1 filer filing a Form 8865 for other Category 1 filers under the multiple Category 1 filers exception must complete a Schedule N for itself and a separate Schedule N for each Category 1 filer not filing Form 8865.

All Category 2 filers are required to complete columns (a), (b), and (c) of Schedule N. Category 2 filers do not have to complete column (d).

Column (a).   Use column (a) to report transactions between the foreign partnership and the person filing the Form 8865.

Column (d).   Use column (d) to report transactions between the foreign partnership and any U.S. person with a 10% or more direct interest in the foreign partnership. If such person also qualifies under column (b), do not report transactions between the foreign partnership and that person under column (d). Report the transactions only under column (b).

Lines 6 and 16.   Enter distributions received from other partnerships and distributions from the foreign partnership for which this form is being completed.

Lines 20 and 21.   Enter the largest outstanding balances during the year of gross amounts borrowed from, and gross amounts lent to, the related parties described in columns (a) through (d). Do not enter aggregate cash flows, year-end loan balances, average balances, or net balances. Do not include open account balances resulting from sales and purchases reported under other items listed on Schedule N that arise and are collected in full in the ordinary course of business.

Schedule O - Transfer of Property to a Foreign Partnership

Note:   Every Category 3 filer must complete Schedule O.

Part I - Transfers Reportable Under Section 6038B

Part I is used to report the transfer of property to a foreign partnership. Provide the information required in columns (a) through (g) with respect to each contribution of property to the foreign partnership that must be reported. If you contributed property with a FMV greater than its tax basis (appreciated property), or intangible property, provide the information required in columns (a) through (g) separately with respect to each item of property transferred (except to the extent you are allowed to aggregate the property under Regulations section 1.704-3(e)(2), (3), and (4)). Provide a general description of each such item of property in the Supplemental information required to be reported section. For all other property contributed, aggregate by the categories listed in Part I.

Column (a).   Enter the date of the transfer. If the transfer was composed of a series of transactions over multiple dates, enter the date the transfer was completed.

Column (b).   Enter the number of items of property transferred.

Column (c).   Enter the FMV of the property contributed (measured as of the date of the transfer).

Column (d).   Enter your adjusted basis in the property contributed on the date of the transfer. See sections 1011 through 1016 for more information on the determination of adjusted basis.

Column (e).   If you contributed appreciated property, enter the method (traditional, traditional with curative allocations, or remedial) used by the partnership to make section 704(c) allocations with respect to each item of such property. See Regulations section 1.704-3(b), (c), and (d) for more information on these allocation methods.

Column (f).   Enter the amount of gain, if any, recognized on the transfer. See sections 721(b) and 904(f)(3).

Column (g).   Enter your percentage interest in the partnership immediately after the transfer. To the extent your percentage interest in the partnership differs among capital, profits, losses, or deductions, enter See Below and state the different percentages.

Supplemental information required to be reported.   Enter any information required to be reported in Part I in greater detail. Identify the applicable column number next to the information entered in this section. In addition, if you contributed property to a foreign partnership as part of a wider transaction, briefly describe the entire transaction.

Part II - Dispositions Reportable Under Section 6038B

Use Part II to report certain dispositions by a foreign partnership of property. If you were required to report a transfer of appreciated property to the partnership, and the partnership disposes of the property while you are still a direct or constructive partner, you must report that disposition in Part II. If the partnership disposes of the property in a nonrecognition transaction and receives in exchange substituted basis property, report the subsequent disposition of the substituted basis property in the same manner as provided for the contributed property. See section 7701(a)(42) for the definition of substituted basis property and Regulations section 1.704-3(a)(8) for more information.

Column (a).   Provide a brief description of the property disposed of by the partnership. If you are reporting the disposition of substituted basis property received by the partnership in a nonrecognition transaction in exchange for appreciated property contributed by you, enter See Attached. Attach a schedule providing brief descriptions of both the property contributed by you to the partnership and the substituted basis property received by the partnership in exchange for that property.

Column (b).   Enter the date that you transferred this property to the partnership. If you are reporting the disposition of substituted basis property received by the partnership in a nonrecognition transaction in exchange for property previously contributed by you, enter See Attached. Attach a schedule showing both the date you transferred the appreciated property to the partnership and the date the partnership exchanged the property for substituted basis property in a nonrecognition transaction. See Regulations section 1.6038B-2.

Column (c).   Enter the date that the partnership disposed of the property.

Column (d).   Briefly describe how the partnership disposed of the property (e.g., by sale or exchange).

Column (e).   Enter the amount of gain, if any, recognized by the partnership on the disposition of property.

Column (f).   Enter the amount of depreciation recapture, if any, recognized by the partnership on the disposition of property. See Regulations section 1.1245-1(e) and 1.1250-1(f).

Column (g).   Enter the amount of gain from column (e) allocated to you.

Column (h).   Enter the amount of depreciation recapture from column (f) allocated to you. See Regulations sections 1.1245-1(e) and 1.1250-1(f). If you recognize any section 1254 recapture on the partnership's disposition of natural resource recapture property, enter See Attached and attach a schedule calculating the amount of recapture. See Regulations section 1.1254-5.

Part III - Gain Recognition Under Section 904(f)(3) or (f)(5)(F)

If gain recognition was required with respect to any transfer reported in Part I under section 904(f)(3) and (f)(5)(F), attach a schedule identifying the transfer and the amount of gain recognized.

Schedule P - Acquisitions, Dispositions, and Changes of Interests in a Foreign Partnership

Use Schedule P to report the acquisition, disposition, and change of interest in a foreign partnership. Every Category 4 filer must complete Schedule P.

Part I - Acquisitions

Part I is completed by Category 4 filers required to report an acquisition of an interest in a foreign partnership. See the Categories of Filers beginning on page 1 for more details about which types of acquisitions must be reported.

Column (a).   If you acquired the interest in the foreign partnership by purchase, gift, inheritance, or in a distribution from a trust, estate, partnership, or corporation, enter the name, address, and identifying number (if any), of the person from whom you acquired the interest.

Column (b).   Enter the date of the acquisition. If the acquisition was composed of a series of transactions over multiple dates, enter the date the acquisition was completed.

Column (c).   Enter the FMV of the interest you acquired in the partnership (measured as of the date of acquisition).

Column (d).   Enter your basis in the partnership interest that you acquired (measured as of the date of acquisition). See sections 722 and 742.

Columns (e) and (f).   Enter your total direct percentage interest in the partnership both before and immediately after the acquisition. To the extent your direct percentage interest in the partnership differs among capital, profits, losses, or deductions, enter See Below and state the different percentages in Part IV.

Part II - Dispositions

This section is completed by U.S. persons who are Category 4 filers because they disposed of an interest in a foreign partnership. See Categories of Filers beginning on page 1 for more details about what types of dispositions must be reported. For each disposition reported in Part II, indicate in Part IV whether a statement is required by Regulations section 1.751-1(a)(3) to be filed with respect to the disposition.

Column (a).   Unless you disposed of the interest by withdrawing, in whole or in part, from the partnership, enter the name, address, and identifying number (if any) of the person to whom you transferred the interest in the foreign partnership.

Column (b).   Enter the date of the disposition. If the disposition was composed of a series of transactions over multiple dates, enter the date the disposition was completed.

Column (c).   Enter the FMV of the interest you disposed of in the partnership (measured as of the date of disposition). If you recognized gain or loss on the disposition, state the amount of gain or loss in Part IV. See section 741.

Column (d).   Enter your adjusted basis in the partnership interest disposed of immediately before the disposition. See section 705.

Columns (e) and (f).   Enter your total direct percentage interest in the partnership both before and immediately after the disposition. To the extent your percentage interest in the partnership differs among capital, profits, losses, or deductions, enter See Below and state the different percentages in Part IV.

Part III - Change in Proportional Interest

This section is completed by U.S. persons who are Category 4 filers because their direct proportional interest in the foreign partnership changed. See Category of Filers beginning on page 1 for more details about which changes in proportional interest must be reported.

Column (a).   Briefly describe the event that caused your interest in the partnership to change (e.g., the admission of a new partner).

Column (b).   Enter the date of the change. If the change resulted from a series of transactions over multiple dates, enter the date the change was completed.

Column (c).   Enter the FMV of your interest in the partnership immediately before the change.

Column (d).   Enter your basis in your partnership interest immediately before the change.

Columns (e) and (f).   Enter your direct percentage interest in the partnership both before and immediately after the change. To the extent your percentage interest in the partnership differs among capital, profits, losses, or deductions, enter See Below and state the different percentages in Part IV.

Part IV - Supplemental Information Required To Be Reported

Enter any information asked for in Part I, Part II, or Part III that must be reported in detail. Identify the applicable part number and column next to the information entered in Part IV.

Paperwork Reduction Act Notice

Codes for Principal Business Activity and Principal Product or Service

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