Instructions For Schedule A (Form 8804) - 2009 (Page 2 of 4) in pdf

each of its installment payments of

Column (a). Enter payments made by

The partnership may use the adjusted

section 1446 tax during the tax year.

the date on line 4, column (a).

seasonal installment method only if the

However, see Regulations section

partnership’s base period percentage for

Columns (b), (c), and (d). Enter

1.1446-3(b)(3)(ii) for an exception. Also,

any 6 consecutive months of the tax year

payments made on or before the date on

see the Note below. In addition, the

is 70% or more. The base period

line 4 for that column and after the date

partnership may only use the prior year

percentage for any period of 6

on line 4 of the preceding column.

safe harbor if all of the following apply:

consecutive months is the average of the

Line 12. If any of the columns in line 12

•

Each installment payment that was

three percentages figured by dividing the

shows an underpayment, complete Part

made during the tax year, when averaged

ECTI for the corresponding 6 consecutive

VII to figure the penalty.

with all prior installment payments, must

month period in each of the 3 preceding

have been 25% of the partnership’s total

tax years by the ECTI for each of their

Parts IV Through VI

section 1446 tax liability under the prior

respective tax years. Figure the base

year safe harbor,

Extraordinary items. Generally, under

period percentage using the 6-month

•

The prior tax year consisted of 12

the annualized income installment

period in which the partnership normally

months,

method, extraordinary items must be

receives the largest part of its ECTI.

•

The partnership timely files (including

taken into account after annualizing the

Example. An amusement park with a

extensions) a U.S. return of partnership

ECTI for the annualization period. Similar

2009 calendar tax year receives the

income (e.g., Form 1065) for the prior tax

rules apply in determining ECTI under the

largest part of its taxable income during a

year, and

adjusted seasonal installment method. An

•

6-month period, May through October. To

The amount of ECTI for the prior tax

extraordinary item includes:

compute its base period percentage for

•

year is not less than 50% of the ECTI

Any item identified in Regulations

this 6-month period, the amusement park

shown on the current year Form 8804 that

section 1.1502-76(b)(2)(ii)(C)(1), (2), (3),

figures its ECTI for each May – October

is (or will be) timely filed.

(4), (7), and (8);

period in 2006, 2007, and 2008. It then

•

A section 481(a) adjustment; and

If the partnership is not permitted to

divides the ECTI for each May – October

•

Net gain or loss from the disposition of

use the prior year safe harbor method

period by the total ECTI for that particular

because any of the necessary conditions

25% or more of the fair market value of

tax year. The resulting percentages are:

described above is not met, skip line 2

the partnership’s business assets during

69% (.69) for May – October 2006, 74%

and enter on line 3 the amount from line

the tax year.

(.74) for May – October 2007, and 67%

These extraordinary items must be

(.67) for May – October 2008. Because the

accounted for in the appropriate

Note. If the partnership qualifies for and

average of 69%, 74%, and 67% is 70%,

annualization period. However, a section

uses the exception under Regulations

the base period percentage for May

481(a) adjustment (unless the partnership

section 1.1446-3(b)(3)(ii) to switch to the

through October 2009 is 70%. Therefore,

makes the alternative choice under

standard option annualization method

the amusement park qualifies for the

Regulations section 1.6655-2(f)(3)(ii)(C))

during the tax year, the partnership

adjusted seasonal installment method.

is treated as an extraordinary item

should include on line 2 the total of all

Line 15. If the partnership has certain

occurring on the first day of the tax year in

installment payments that were made

extraordinary items, special rules apply.

which the item is taken into account in

during the tax year under both the prior

Do not include on line 15 the de minimis

determining ECTI.

year safe harbor method and the

extraordinary items that the partnership

standard option annualization method.

For more information regarding

chooses to include on line 22b. See

Attach a schedule that explains the

extraordinary items, see Regulations

Extraordinary items above.

computation.

section 1.6655-2(f)(3)(ii) and the

examples in Regulations section

Line 22b. If the partnership has certain

Part III. Figuring the

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

extraordinary items of $1 million or more

section 1.6655-3(d)(3).

from a transaction, or a section 481(a)

Underpayment

adjustment, special rules apply. Include

De minimis rule. Extraordinary items

Line 6. Enter the estimated tax

these amounts on line 22b for the

identified above resulting from a particular

payments made by the partnership for its

appropriate period. Also include on line

transaction that totals less than $1 million

tax year as indicated below. Include any

22b the de minimis extraordinary items

(other than a section 481(a) adjustment)

overpayment from line 13 of the

that the partnership chooses to exclude

may be annualized using the general

partnership’s 2008 Form 8804 that was

from line 15. See Extraordinary items

rules of Regulations section 1.6655-2(f),

credited to the partnership’s first

above.

or, if the partnership chooses, may be

installment period on its 2009 Form 8804.

taken into account after annualizing the

Line 23. Enter the amount by which line

If an installment is due on a Saturday,

ECTI for the annualization period.

22c is being reduced for state and local

Sunday, or legal holiday, payments made

taxes under Regulations section

Part IV. Adjusted Seasonal

on the next day that is not a Saturday,

1.1446-6(c)(1)(iii) and for certified foreign

Sunday, or legal holiday are considered

Installment Method

partner-level items submitted using Form

made on the due date to the extent the

8804-C. See Reductions for State and

payment is applied against that required

Note. Part IV does not reflect the lower

Local Taxes and Certification of

installment.

preferential rates permitted under

Deductions and Losses in the Instructions

Also include on line 6 any:

Regulations section 1.1446-3(a)(2).

for Forms 8804, 8805, and 8813 for

•

Section 1446 tax paid or withheld by

These were omitted because, for most

additional information.

another partnership in which the

taxpayers, the income reported in Part IV

partnership filing this Schedule A (Form

will be predominantly (or exclusively)

Part V. Annualized Income

8804) was a partner during the tax year.

ordinary income. If the partnership wishes

See the instructions for Form 8804, line

to consider lower preferential rates for

Installment Method

6b, in the Instructions for Forms 8804,

Part IV (and if the requirements outlined

8805, and 8813.

in the third paragraph of the line 31

Line 30. Annualization periods. Enter

•

Section 1445(a) or 1445(e)(1)(B) tax

instructions are met), it must attach a

on line 30, columns (a) through (d),

withheld from or paid by the partnership

schedule which appropriately expands

respectively, the annualization periods for

filing this Schedule A (Form 8804) during

lines 15 and 22 through 25 to show the

the option listed below. For example, if

the tax year for a disposition of a U.S. real

applicable special types of income or gain

the partnership elected Option 1, enter on

property interest. See the instructions for

and the applicable percentages (see, for

line 30 the annualization periods 2, 4, 7,

Form 8804, line 6c, in the Instructions for

example, lines 33 and 34 of this

and 10, in columns (a) through (d),

Forms 8804, 8805, and 8813.

schedule).

respectively.

-2-

Instructions for Schedule A (Form 8804) (2009)

Instructions For Schedule A (Form 8804) - 2009 Page 2

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