Instructions For Schedule A (Form 8804) - 2009


2 0 09
Department of the Treasury
Internal Revenue Service
Instructions for Schedule A
(Form 8804)
Also, for purposes of determining a
and/or the annualized income installment
Section references are to the Internal
required installment, if an amended Form
Revenue Code unless otherwise noted.
8804 is filed for the prior tax year, then
Example. A ski shop, which receives
General Instructions
“prior tax year” includes the amended
most of its income during the winter
Form 8804, but only if the amended Form
months, may benefit from using one or
8804 is filed before the applicable
both of these methods to figure its
Purpose of Form
installment due date.
required installments. The annualized
Partnerships that have effectively
income installment or adjusted seasonal
The penalty is figured separately for
connected taxable income (ECTI)
installment may be less than the required
each installment due date. Therefore, the
allocable to foreign partners use
installment under the current year safe
partnership may owe a penalty for an
Schedule A (Form 8804) to determine:
harbor (increased by any reduction
earlier due date even if it paid enough tax
Whether they are subject to the penalty
recaptured under section 6655(e)(1)(B))
later to make up the underpayment. This
for underpayment of estimated tax and, if
for one or more due dates. Using one or
is true even if the partnership is due a
both of these methods may reduce or
refund when its return is filed. However,
The amount of the underpayment
eliminate the penalty for those due dates.
the partnership may be able to reduce or
eliminate the penalty by using the
Use Parts IV through VI on pages 2
annualized income installment method or
through 4 of Schedule A (Form 8804) to
Who Must File
the adjusted seasonal installment
figure one or more required installments.
method. See the instructions for Parts IV
Generally, the partnership does not have
If Parts IV through VI are used for any
and V for details.
to file this schedule because the IRS will
payment due date, those Parts must be
figure the amount of the penalty and
used for all subsequent payment due
Exception to the Penalty
notify the partnership of any amount due.
dates. To arrive at the amount of each
However, even if the partnership does not
required installment, Part VI uses the
A partnership will not have to pay a
owe a penalty, complete and attach this
smallest of:
penalty if the tax shown on line 5e of its
schedule to the partnership’s Form 8804
The adjusted seasonal installment (if
2009 Form 8804 is less than $500.
if the Part II, line 1 amount on page 1 is
$500 or more and either of the following
The annualized income installment (if
How To Use Schedule A
applicable), or
Complete this schedule as follows:
The current year safe harbor
1. The adjusted seasonal installment
(increased by any reduction recaptured
method is used.
Check one or both of the boxes in Part
under section 6655(e)(1)(B)).
I that apply. If the partnership checks a
2. The annualized income installment
box in Part I, attach Schedule A (Form
Follow the steps below to determine
method is used.
8804) to Form 8804. Be sure to check the
which parts of the form have to be
box on Form 8804, line 8.
Who Must Pay the
If Part II, line 1 is $500 or more,
If the partnership is using only the
complete the rest of page 1 to determine
adjusted seasonal installment method,
Underpayment Penalty
the underpayment for any of the
check the applicable box in Part I and
installment due dates.
Generally, a partnership is subject to the
complete Parts IV and VI of Schedule A
If there is an underpayment on line 12
penalty if it did not timely pay in
(Form 8804).
(column (a), (b), (c), or (d)), go to Part VII
installments at least the smaller of:
If the partnership is using only the
to figure the penalty.
annualized income installment method,
1. The tax shown on line 5e of its
Complete Parts IV through VI as
check the applicable box in Part I and
2009 Form 8804 or
appropriate if the partnership uses the
complete Parts V and VI of Schedule A
2. The total section 1446 tax that
adjusted seasonal installment method
(Form 8804).
would have been due for 2008, without
and/or the annualized income installment
If the partnership is using both
regard to reductions for certified foreign
methods, check both of the boxes in Part
partner-level items, on the ECTI allocable
I and complete all three parts (Parts IV
to foreign partners for 2008, provided that
through VI) of Schedule A (Form 8804).
(1) this amount is at least 50% of the sum
Specific Instructions
of the amounts shown on lines 4d, 4h, 4l,
Part II. Current Year and
and 4p of its 2009 Form 8804 and (2) the
tax year was for a full 12 months. See the
Prior Year Safe Harbors
Part I. Reasons for Filing
instructions for line 2 below for more
Line 2 (prior year safe harbor). Enter
Adjusted seasonal installment method
the total section 1446 tax that would have
and/or annualized income installment
been due for 2008, without regard to
In these instructions, “Form 8804”
method. If the partnership’s income
reductions for certified foreign
generally refers to the partnership’s
varied during the year because, for
partner-level items on the ECTI allocable
original Form 8804. However, an
example, it operated its business on a
to foreign partners for 2008.
amended Form 8804 is considered the
seasonal basis, it may be able to lower or
original Form 8804 if the amended Form
eliminate the amount of one or more
The partnership may generally use the
8804 is filed by the due date (including
required installments by using the
prior year safe harbor only if it paid the
extensions) of the original Form 8804.
adjusted seasonal installment method
required amount using that method for
Cat. No. 36325U


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