Instructions For Schedule C (Form 1065) - Additional Information For Schedule M-3 Filers - 2011
ADVERTISEMENT
1Instructions for Schedule C
Department of the Treasury
Internal Revenue Service
(Form 1065)
(Rev. December 2011)
Additional Information for Schedule M-3 Filers
Section references are to the Internal Revenue Code unless
The disclosure must be made on the transferor
otherwise noted.
partner’s return using Form 8275, Disclosure Statement,
or on an attached statement providing the same
General Instructions
information. When more than one partner transfers
property to a partnership pursuant to a plan, the
What’s New
disclosure may be made by the partnership rather than
The IRS has created a page on IRS.gov for information
by each partner.
about Schedule C (Form 1065) and its instructions, at
Question 2. Answer “Yes” if this partnership is a partner
Information about any future
in another partnership and has received special
developments affecting Schedule C (Form 1065) (such
allocations of income, gain, loss, deduction, or credit from
as legislation enacted after we release it) will be posted
such partnership. For more information on special
on that page.
allocations, see Special Allocations, in the Instructions for
Form 1065.
Purpose of Form
Example. P, a partnership, joins with B, an individual,
Use Schedule C (Form 1065) to provide answers to
in forming the PB partnership. P and B each contribute
additional questions for filers of Schedule M-3 (Form
$50,000 cash to PB partnership. Profits and losses are
1065), Net Income (Loss) Reconciliation for Certain
split 50/50, with the exception of depreciation, which is
Partnerships.
allocated 99% to P and 1% to B. P answers “Yes” to
Who Must File
question 2 because its 99% allocation of depreciation
deductions from PB partnership is disproportionate to its
Schedule C (Form 1065) must be filed by all partnerships
ratio of sharing other items from PB partnership.
that file Form 1065, U.S. Return of Partnership Income,
Question 5. The term “change in accounting principle”
and are also filing Schedule M-3 (Form 1065). Attach
means a change from one generally accepted accounting
Schedule C (Form 1065) to Form 1065.
principle to another generally accepted accounting
Specific Instructions
principle as described in “Statement of Financial
Accounting Standards No. 154–Accounting Changes
Question 1. For certain transfers that are presumed to
and Error Corrections.”
be sales, the partnership or the partners must comply
For purposes of this question, answer “Yes” if such a
with the disclosure requirements in Regulations section
change in accounting principle occurred during the tax
1.707-8. Generally, disclosure is required when:
year and such change resulted in, or is expected to result
1. Certain transfers to a partner are made within two
in, an effect on the amount of income reported for
years of a transfer of property by the partner to the
financial statement purposes.
partnership;
Question 6. File Form 3115, Application for Change in
2. Certain debt is incurred by a partner within two
Accounting Method, to request a change in a method of
years of the earlier of:
•
accounting. See the Instructions for Form 3115 for
A written agreement to transfer or
•
information on requesting a change in accounting
A transfer of the property that secures the debt, if
method.
the debt, nevertheless, is treated as a qualified liability; or
3. Transfers from a partnership to a partner occur
which are the equivalent to those listed in 1 or 2 above.
Nov 04, 2011
Cat. No. 51534B
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Financial