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Instructions for Form 65

O R E G O N

D E PA R T M E N T

Oregon Partnership Return of Income

O F R E V E N U E

Which partnerships must file an

Individual income tax returns

Oregon partnership return?

The Oregon individual income tax booklet lists filing re-

quirements for partners’ individual income tax returns. See

• Every partnership having income derived from or con-

page 2 to order full-year resident and part-year/nonresident

nected with sources in Oregon.

booklets. A partnership generally is not subject to tax, but

• Every partnership having one or more Oregon resident

each partner’s distributive share of net income (or loss) and

partners.

separately stated items must be reported on that partner’s

individual return.

What must be attached to the

Partners report their share of Oregon modifications on

Oregon partnership return?

Forms 40, 40N, or 40P. Generally, increases to income go on

Attach the information in the following order:

the “Other additions” line of the Oregon individual return.

Generally, decreases to income go on the “Other subtrac-

• A list of partners, if more than 10 partners at any time dur-

tions” line of the Oregon individual return. Label the line

ing the year.

“OPM” (Oregon Partnership Modifications). Separately

• An apportionment schedule, if you answered yes to ques-

stated items go on the appropriate line of the Oregon indi-

tions 5A and 5B on Form 65.

vidual return.

• An Oregon Depreciation Schedule (form 150-101-025), if

Nonresident partners can choose to file an individual non-

Oregon depreciation differs from federal depreciation.

resident return or join together to file a multiple nonresident

• If this is the final partnership return, a schedule showing

tax return. Call 503-945-8462 to order instructions for filing

to whom all assets and liabilities were distributed, and

multiple nonresident returns.

each asset’s adjusted basis and fair market value.

• A copy of federal Form 1065, U.S. Partnership Return of

Guaranteed payments

Income, or Form 1065-B, U.S. Return of Income for Elect-

Guaranteed payments paid to a nonresident partner are

ing Large Partnerships. Include all pages and supporting

treated as distributive shares of partnership income. Income

schedules.

attributable to Oregon sources is determined by applying the

• Federal Schedule K-1s, if the partnership has less than 11

allocation and apportionment provisions to each non-

partners during the year.

resident’s entire distributive share including guaranteed

payments.

Filing deadlines and date of

connection to federal law

Oregon modifications to federal

partnership income

Returns for the 2001 calendar year are due by April 15, 2002.

Fiscal year returns are due by the 15th day of the fourth

Complete Schedule I to figure Oregon modifications to fed-

month after the end of the partnership’s tax year.

eral partnership income. Attach schedules if necessary to ex-

plain and compute the modifications.

Oregon is permanently tied to federal law. Most items are

treated the same way on your Oregon and federal returns.

Generally, each partner’s share of modifications is figured

Any future federal law changes affecting taxable income will

by using the profit sharing percentage shown on that

automatically be adopted by Oregon. The partnership’s tax

partner’s federal Schedule K-1. Each partner’s share of the

year for Oregon must be the same as for federal. Oregon

Oregon modifications must be reported on the partner’s

doesn’t have a required payment for partnerships choosing

Schedule K-1 or equivalent. Show separately any Oregon

an alternative tax year.

modification that could have a special tax effect on a

partner’s individual return. The modifications may be add-

Oregon recognizes the federal “check the box” regulations

ed to the federal Schedule K-1s and labeled “Oregon modi-

for unincorporated organizations. Also, Oregon treats the

fications.”

electing large partnership the same as federal.

Gain on voluntary and involuntary conversions. Oregon

Partnership failure-to-file penalty

now allows partnerships to elect for their resident and non-

resident partners to defer the gain on voluntary and invol-

A penalty may be assessed if a partnership doesn’t file a re-

untary conversions the same as for federal purposes.

turn or fails to provide information to the Department of

Revenue as required by law. The penalty is $50 per month

Partnerships must make the election for all consenting part-

per partner for each month the return is late or incomplete,

ners. Attach a statement to Oregon Form 65 stating that the

up to a maximum of five months. Each partner is personally

listed partners are electing to defer the gain, and agree to re-

liable for a portion of the penalty.

port the gain if they later lose their federal deferral.

150-101-065 (Rev. 9-01)

Instructions For Form 65 - Oregon Partnership Return Of Income - Oregon Department Of Revenue

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