Instructions For Form 8918 - 2011 (Page 3 of 6) in pdf

Eliminated Categories

any losses flow through to one or more

day of the month that follows the end of

partners.

the calendar quarter in which the advisor

Transactions With a Brief Asset

•

For all other partnerships and S

became a material advisor with respect to

Holding Period. The disclosure

corporations, at least $2 million in any

the reportable transaction or in which

requirement for this category has been

single tax year or $4 million in any

circumstances occur to require an

eliminated for transactions entered into on

combination of tax years, whether or not

amended disclosure statement. See Date

or after August 3, 2007. However, this

any losses flow through to one or more

you became a material advisor, earlier.

does not relieve taxpayers of any

partners or shareholders.

Where To File

disclosure obligations for brief asset

•

For trusts, at least $2 million in any

holding transactions that were entered

In order to file, mail your completed Form

single tax year or $4 million in any

into before August 3, 2007. The rules for

8918 to:

combination of tax years, whether or not

brief asset holding period reportable

any losses flow through to one or more

Internal Revenue Service

transactions entered into before August 3,

beneficiaries. (At least $50,000 for a

OTSA Mail Stop 4916

2007, are contained in Regulations

single tax year if the loss arose from a

1973 North Rulon White Blvd.

section 1.6011-4 in effect prior to August

section 988 transaction defined in section

Ogden, Utah 84404

3, 2007.

988(c)(1) (relating to foreign currency

Furnishing a Reportable

Transactions With a Significant

transactions), whether or not the loss

Book-Tax Difference. The disclosure

Transaction Number

flows through from an S corporation or

requirement for this category has been

partnership).

Receipt of a reportable transaction

eliminated. Transactions with a significant

number does not indicate that the IRS

Section 165 loss. For this purpose, a

book-tax difference that would have been

has reviewed, examined, or approved the

section 165 loss is adjusted for any

required to be disclosed with returns due

transaction.

salvage value and for any other insurance

on dates (including extensions) after

compensation received. However, a

Material advisors must provide the

January 5, 2006, are no longer reportable

section 165 loss does not include

reportable transaction number to all

transactions.

offsetting gains, other income or

taxpayers and material advisors for whom

However, this does not relieve

limitations. The full amount of a section

the material advisor acts as a material

taxpayers of any disclosure obligations for

165 loss is included in the year it

advisor. The reportable transaction

significant book-tax difference

occurred, regardless of whether all or part

number must be provided when the

transactions that should have been

of it is included in computing a net

transaction is entered into, or, if the

disclosed on a return with a due date prior

operating loss (under section 172) or a

transaction is entered into before the

to January 6, 2006. For more details, see

net capital loss (under section 1212) that

material advisor received the reportable

Notice 2006-6, 2006-5 I.R.B. 385, and

is a carryback or carryover to another

transaction number, within 60 calendar

Rev. Proc. 2004-67, 2004-50 I.R.B. 966.

year. A section 165 loss does not include

days from the date the reportable

any portion of a loss attributable to a

Exceptions to Reportable

transaction number is mailed to the

capital loss carryback or carryover from

Transaction Categories, Published

material advisor.

another year that is treated as a deemed

Guidance

Requirement To Keep Lists

capital loss under section 1212.

A transaction is not considered a

Generally, a material advisor must

To determine if a transaction results in

reportable transaction if the IRS makes a

maintain a list identifying each entity or

a taxpayer claiming a loss that meets the

determination in published guidance that

individual with respect to who the advisor

threshold amounts over a combination of

it is not subject to the reporting

acted as a material advisor with respect

tax years, only losses claimed in the tax

requirements. For more information, see

to a reportable transaction. A material

year the transaction is entered into and

the following.

advisor is not required to identify an entity

•

the 5 succeeding tax years are combined.

Rev. Proc. 2007-20, 2007-7 I.R.B. 517;

or individual on the list if the entity or

•

Rev. Proc. 2004-66, 2004-50 I.R.B.

The types of losses included in this

individual entered into a listed transaction

966;

category are section 165 losses (including

or a transaction of interest more than 6

•

Rev. Proc. 2004-67, 2004-50 I.R.B.

amounts deductible under a provision that

years before the transaction was

967; and

treats a transaction as a sale or other

identified in published guidance as a

•

Rev. Proc. 2004-68, 2004-50 I.R.B.

disposition or otherwise results in a

listed transaction or a transaction of

969.

deduction under section 165). However,

interest.

this category does not include losses

The IRS may also determine by

A separate list must be prepared and

described in Rev. Proc. 2004-66, 2004-50

individual letter ruling that an individual

maintained for each transaction or group

I.R.B. 966 (or future published guidance).

letter ruling request satisfies the reporting

of substantially similar transactions. The

requirements. See Request for Ruling,

Transactions of Interest

list must be maintained for 7 years

below, for more details on submitting a

following the earlier of the date on which

A transaction of interest is a transaction

letter ruling request.

the material advisor last made a tax

that is the same as or substantially similar

Request for Ruling

statement relating to the transaction, or

to one of the types of transactions that the

the date the transaction was last entered

IRS has identified by notice, regulation, or

You may request a ruling from the IRS to

into, if known. Upon IRS’ written request,

other form of published guidance as a

determine whether a specific transaction

each material advisor who is responsible

transaction of interest. It is a transaction

is a reportable transaction. The potential

for maintaining a list must furnish the list

that the IRS and Treasury Department

obligation of a material advisor and the

to the IRS. The list must be maintained in

believe has a potential for tax avoidance

taxpayer to disclose the transaction will

a form that enables the IRS to determine

or evasion, but for which there is not

not be suspended during the period that

without undue delay or difficulty the

enough information to determine if the

the ruling request is pending. Therefore,

information required to be maintained for

transaction should be identified as a tax

even if you have a ruling request with the

each list. See Regulations section

avoidance transaction. The requirement

IRS, you must still complete and file this

301.6112-1 for more information.

to disclose transactions of interest applies

form in order to avoid potential penalties.

to transactions of interest entered into

Note. The IRS does not require you to

See Rev. Proc. 2011-1, 2011-1 I.R.B. 1

after November 1, 2006. For existing

submit detailed information with this form

for information on ruling requests.

guidance, see Notice 2009-55, 2009-31

with respect to the requirement to keep

When To File

I.R.B. 170. The IRS may issue new or

lists. However, to assist you in

update the existing notice, regulation, or

The material advisor’s disclosure

maintaining these lists, we anticipate that

other form of guidance that identifies a

statement must be filed with the Office of

an electronic worksheet will be provided

transaction as a transaction of interest.

Tax Shelter Analysis (OTSA) by the last

in the near future on

-3-

Instructions for Form 8918 Rev. 12-2011

Instructions For Form 8918 - 2011 Page 3

Related Articles

Related forms

Related Categories