Form 8804-W - Instruction For Form 1446 - 2008 (Page 2 of 3) in pdf

Form 8804-W (WORK SHEET) 2008

Page

partnership files for the current tax year and the statement must

The partnership generally enters these amounts in the column

include enough information to allow the IRS to determine whether

that corresponds to the installment period for which these

the change was appropriate.

amounts were paid or withheld. However, if the partnership learns

about the payments or withholding in a subsequent installment

If the partnership begins using the prior year safe harbor

period, the partnership may claim them in that period.

method and switches to the current year safe harbor (because the

partnership does not qualify for the relief described in the

Parts II Through IV

previous paragraph (i.e., using the standard option annualization

If only the adjusted seasonal installment method (Part II) is used,

method) or the partnership chooses not to continue using it), in

complete Parts II and IV. If only the annualized income installment

order to avoid an underpayment penalty with respect to the

method (Part III) is used, complete Parts III and IV. If both

current installment payment, the partnership must pay the sum of

methods are used, complete all three parts. Enter in each column

(a) the current installment payment based on the current year safe

on line 10 the amounts from the corresponding column of line 42.

harbor, plus (b) the sum of the amount by which the current year

safe harbor exceeds the prior year safe harbor amount paid in for

Do not figure any required installment until after the

each prior installment period during which it qualified for the prior

end of the month preceding the due date for that

year safe harbor.

installment.

CAUTION

Line 8

Enter the smaller of line 6 or line 7. However, if, for any installment

Extraordinary items. Generally, under the annualized income

payment, line 6 is smaller than line 7 and you enter that smaller

installment method, extraordinary items must be taken into

line 6 amount on line 8, you will not qualify for the prior year safe

account after annualizing the effectively connected taxable

harbor when determining any penalty due on Schedule A (Form

income for the annualization period. Similar rules apply in

8804) (see the line 7 instructions on page 4). Therefore, in that

determining effectively connected taxable income under the

case, for any subsequent installment payment during the tax year,

adjusted seasonal installment method. An extraordinary item

do not use the line 7 amount.

includes:

Any item identified in Regulations section

Line 9—Installment Due Dates

1.1502-76(b)(2)(ii)(C)(1), (2), (3), (4), (7), and (8);

Calendar-year taxpayers: Enter 4-15-2008, 6-16-2008,

A section 481(a) adjustment; and

9-15-2008, and 12-15-2008, respectively, in columns (a) through

Net gain or loss from the disposition of 25% or more of the fair

(d).

market value of the partnership’s business assets during the tax

Fiscal-year taxpayers: Enter the 15th day of the 4th, 6th, 9th,

year.

and 12th months of the partnership’s tax year in columns (a)

These extraordinary items must be accounted for in the

through (d). If the regular due date falls on a Saturday, Sunday, or

appropriate annualization period. However, a section 481(a)

legal holiday, enter the next business day.

adjustment (unless the partnership makes the alternative choice

under Regulations section 1.6655-2(f)(3)(ii)(C)) is treated as an

Line 10

extraordinary item occurring on the first day of the tax year in

Enter 25% of line 8 in columns (a) through (d) unless the

which the item is taken into account in determining effectively

partnership uses the annualized income installment method or the

connected taxable income.

adjusted seasonal installment method.

For more information regarding extraordinary items, see

Annualized income installment method and/or adjusted

Regulations section 1.6655-2(f)(3)(ii) and the examples in

seasonal installment method. If the partnership’s ECTI is

Regulations section 1.6655-2(f)(3)(vii). Also see Regulations

expected to vary during the year because, for example, it

section 1.6655-3(d)(3).

operates its business on a seasonal basis, it may be able to lower

De minimis rule. Extraordinary items identified above resulting

the amount of one or more required installments by using the

from a particular transaction that total less than $1 million (other

annualized income installment method and/or the adjusted

than a section 481(a) adjustment) may be annualized using the

seasonal installment method. For example, a ski shop, which

general rules of Regulations section 1.6655-2(f), or, if the

receives most of its income during the winter months, may be

partnership chooses, may be taken into account after annualizing

able to benefit from using one or both of these methods in figuring

the effectively connected taxable income for the annualization

one or more of its required installments.

period.

To use one or both of these methods, complete Part II and/or

Part II—Adjusted Seasonal Installment Method

Part III of the form. If those Parts are used for any payment date,

those Parts must be used for all subsequent payment due dates.

Note. Part II does not reflect the lower preferential rates permitted

To arrive at the amount of each required installment, Part IV

under Regulations section 1.1446-3(a)(2). This was done because,

automatically selects the smallest of (a) the annualized income

for most taxpayers, the income reported in Part II will be

installment (if applicable), (b) the adjusted seasonal installment (if

predominantly (or exclusively) ordinary income. If the partnership

applicable), or (c) the current year safe harbor (increased by any

wishes to consider lower preferential rates for Part II (and if the

recapture of a reduction in a required installment under section

requirements outlined in the Note in the line 30 instructions are

6655(e)(1)(B)).

met), it must attach a schedule which appropriately expands lines

14 and 21 through 24 to show the applicable special types of

Line 11

income or gain and the applicable percentages (see, for example,

Include on line 11 any 2007 overpayment that the partnership

lines 32 and 33 of this schedule).

chose to credit against its 2008 tax. The overpayment is credited

Complete this part only if the partnership’s base period

against unpaid required installments in the order in which the

percentage for any 6 consecutive months of the tax year equals or

installments are required to be paid.

exceeds 70%. Figure the base period percentage using the

Also include on line 11 any:

6-month period in which the partnership normally receives the

Section 1446 tax paid or withheld by another partnership in

largest part of its ECTI. The base period percentage for any period

which the partnership filing this Form 8804-W was a partner

of 6 consecutive months is the average of the three percentages

during the tax year. See the Instructions for Form 8804, line 6b, in

figured by dividing the ECTI for the corresponding

the Instructions for Forms 8804, 8805, and 8813.

6-consecutive-month period in each of the 3 preceding tax years

by the ECTI for each of their respective tax years.

Section 1445(a) or 1445(e)(1) tax withheld from or paid by the

partnership filing this Form 8804-W during the tax year for a

Example. An amusement park with a calendar year as its tax

disposition of a U.S. real property interest. See the instructions for

year receives the largest part of its ECTI during a 6-month

Form 8804, line 6c, in the Instructions for Forms 8804, 8805, and

period, May through October. To compute its base period

8813.

Form 8804-W - Instruction For Form 1446 - 2008 Page 2

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