Instructions for Form 8804 |
2006 Tax Year |
This is archived information that pertains only to the 2006 Tax Year. If you are looking for information for the current tax year, go to the Tax Prep Help Area.
When providing a U.S. address on Form 8804, 8805, or 8813, include the suite, room, or other unit number after the street
address. If the Post
Office does not deliver mail to the street address and the partnership (or withholding agent) has a P.O. box, show the box
number instead of the
street address. If the partnership (or withholding agent) receives its mail in care of a third party (such as an accountant
or an attorney), enter on
the street address line “c/o” followed by the third party's name and street address or P.O. box.
When providing a foreign address on Form 8804, 8805, or 8813, enter the number and street, city, province or state, and the
name of the country.
Follow the foreign country's practice in placing the postal code in the address. Do not abbreviate the country name.
Figure the partnership's ECTI using the definition on page 2. Enter the total ECTI allocable to foreign partners (by income
type) on lines 4a, 4d,
4g, and 4h. With respect to lines 4d, 4g, and 4h, enter the specified types of income allocable to non-corporate partners
if such partners would be
entitled to use a preferential rate on such income or gain. See Regulations section 1.1446-3(a)(2) for additional information.
If the partnership has net ordinary loss, net short-term capital loss, or net 28% capital loss, each net loss should be netted
against the
appropriate categories of income and gain to determine the amounts of income and gain to be entered on lines 4d, 4g, and 4h,
respectively. See section
1(h) and Notice 97-59, 1997-45 I.R.B. 7, for rules for netting gains and losses. In addition, if the partnership has received
any certificates under
Regulations section 1.1446-6T, then the netting rules of section 1(h) and Notice 97-59 must be considered in determining the
category of income such
items offset.
Line 4g.
Enter the unrecaptured section 1250 gains allocable to non-corporate partners. If you have a reduction to this amount
due to the application of the
netting rules referred to in the last sentence of the last paragraph above, net this reduction against the unrecaptured section
1250 gains allocable
to non-corporate partners before entering this amount on line 4g. Also, attach a schedule showing (1) the amount of partnership
level unrecaptured
section 1250 gains allocable to foreign partners before the reduction caused by partner level certificates under Regulations
section 1.1446-6T; (2)
the amount of the reduction for certificates under Regulations section 1.1446-6T; and (3) the net amount reported on line
4g.
Note.
Partnership ECTI on which a foreign partner is exempt from U.S. tax by a treaty or other reciprocal agreement is not allocable
to that partner and
is exempt from withholding under section 1446. However, this exemption from section 1446 withholding must be reported on Form
8805. See instructions
for line 8b of Form 8805 below.
Enter the reduction to the partnership's ECTI allocable to foreign partners (by income type) by reason of valid certificates
received from foreign
partners under Regulations section 1.1446-6T. See Certification of Deductions and Losses on page 3. For these purposes, a “valid
certificate” refers to any certificate the partnership considers and relies on under the rules of Regulations section 1.1446-6T.
Enter on line 6b the amount of section 1446 tax withheld by lower-tier partnerships with respect to ECTI allocable to the
upper-tier partnership
(see Tiered Partnerships on page 4). The amount withheld will be shown on line 10 of the Form 8805 the partnership receives from the
lower-tier partnership. If the partnership receives a Form 1042-S from a lower-tier PTP, the amount withheld will be shown
in box 7 of the Form
1042-S. (Box 1 of the Form 1042-S will show income code 27.)
Line 6c applies only to partnerships treated as foreign persons and subject to withholding under section 1445(a) or 1445(e)(1)
upon the disposition
of a U.S. real property interest.
Enter on line 6c the amount of tax withheld under section 1445(a) and shown on Form 8288-A, Statement of Withholding on Dispositions
by Foreign
Persons of U.S. Real Property Interests, for the tax year in which the partnership disposed of the U.S. real property interest.
Also enter on line 6c the amount of section 1445(e)(1) tax withheld on a distribution by a domestic trust to the partnership
with respect to the
disposition of a U.S. real property interest by the trust. The amount withheld will be shown in box 7 of the Form 1042-S the
partnership receives from
the trust. (Box 1 of the Form 1042-S will show income code 25 or 26.)
For both of the situations described above, do not enter more than the amount allocable to foreign partners (as defined in
section 1446(e)). Enter
amounts allocable to U.S. partners on line 15f of Schedule K (Form 1065) and in box 15 (using code P) of Schedule K-1 (Form
1065). For Form 1065-B,
enter amounts on line 15 of Schedule K and in box 9 of Schedule K-1.
If Schedule A (Form 8804) is attached, check the box on line 8 and enter the amount of any penalty on this line.
A partnership must pay the withholding tax for a foreign partner even if it does not have a U.S. TIN for that partner. See
Taxpayer
Identifying Number on page 1 for details.
Enter the type of partner (for example, individual, corporation, partnership, trust, estate).
See Country Codes on pages 7 and 8.
Check the box on this line if any of the partnership's ECTI is treated as not allocable to the foreign partner identified
on line 1a and therefore
exempt from section 1446 withholding because the income is exempt from U.S. tax for that foreign partner by a treaty, reciprocal
exemption, or a
provision of the Internal Revenue Code.
Enter the partnership ECTI allocable to the foreign partner (before considering any partner certifications under Regulations
section 1.1446-6T).
The partnership must provide a statement (generally Schedule K-1 (Form 1065)) to the foreign partner that lists each income
type of ECTI included
on line 9. The income types of ECTI that may be included on line 9 are:
-
Net ordinary income.
-
28% rate gains (non-corporate partners only).
-
Unrecaptured section 1250 gains (non-corporate partners only).
-
Qualified dividend income and net long-term capital gains (including net section 1231 gains) (non-corporate partners only).
To calculate the total tax credit allowed to a foreign partner under section 1446, subtract from each type of ECTI allocable
to the foreign partner
the amount of losses or deductions certified by the partner under Regulations section 1.1446-6T that the partnership considered
in determining that
partner's portion of the section 1446 withholding tax due. Then multiply each net amount by the applicable percentage (see
page 3 for definition).
Finally, total the resulting amounts.
The partnership is required to attach the computation referred to above to the Form 8805 (see Regulations section 1.1446-6T(d)(2)(ii)).
The
partnership is also required to attach any certificates received under Regulations section 1.1446-6T that the partnership
considered in whole or in
part in making this calculation.
Schedule T-Beneficiary Information
If the foreign partner is a foreign trust or estate, the foreign trust or estate must provide to each of its beneficiaries,
a copy of the Form 8805
furnished by the partnership. In addition, the foreign trust or estate must complete Schedule T for each of its beneficiaries
and must provide that
Schedule T information to each beneficiary.
The foreign trust or estate may provide all of the information listed in the previous paragraph on a single Form 8805 for
each of its
beneficiaries. In this case, the information provided in boxes 1a through 10 will be the same for all of the beneficiaries,
but the information
provided on Schedule T may vary from beneficiary to beneficiary, depending on the ownership interests of the respective beneficiaries.
Enter the amount of ECTI on line 9 to be included in the beneficiary's gross income. The foreign trust or estate must provide
a statement
(generally Schedule K-1 (Form 1041)) to each of its beneficiaries that lists each income type of ECTI included on line 12.
The income types of ECTI
that may be included on line 12 are:
-
Net ordinary income.
-
28% rate gains (non-corporate beneficiaries only).
-
Unrecaptured section 1250 gains (non-corporate beneficiaries only).
-
Qualified dividend income and net long-term capital gains (including net section 1231 gains) (non-corporate beneficiaries
only).
To determine the total tax credit allowed to a beneficiary under section 1446, multiply each type of ECTI on line 12 by the
applicable percentage
(see page 3 for definition).
A partnership without a U.S. EIN must obtain one and must pay any section 1446 withholding tax due. If the partnership has
not received an EIN by
the time it files Form 8813, indicate on line 1 of Form 8813 the date the partnership applied for its EIN. On receipt of its
EIN, the partnership must
immediately send that number to the IRS using the address as shown in Where To File on page 1. Failure to provide an EIN may delay
processing of payments on behalf of the partners.
See Amount of each installment payment of withholding tax on page 3 for information on calculating the amount of the payment.
If the total section 1446 tax paid for an installment period has been reduced as a result of relying in whole or in part on
a partner's certificate
under Regulations section 1.1446-6T, then that certificate must be attached to all Forms 8813 starting with the first installment
period in which the
certificate was considered. Under these circumstances, a partnership must file Form 8813 for an installment period even if
no section 1446 withholding
tax is due. Also, under these circumstances, the partnership must attach to the Form 8813 a computation of the tax due relating
to each partner whose
certificate it relied on. See Regulations section 1.1446-6T(d)(2)(ii).
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