Instructions For Form 8804-W - 2010 printable pdf download

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Department of the Treasury

Internal Revenue Service

Instructions for Form

8804-W

have to refigure its required installments.

determining the category of income the

Section references are to the Internal

If earlier installments were underpaid, the

reduction amounts offset.

Revenue Code unless otherwise noted.

partnership may owe a penalty for

Line 7—Prior Year Safe Harbor

General Instructions

underpayment of estimated tax. An

Enter the total section 1446 tax that would

immediate catch-up payment should be

have been due for 2009 on ECTI

Who Must Make Estimated

made to reduce the amount of any

allocable to foreign partners for 2009,

penalty resulting from the underpayment

Section 1446 Tax

without any reductions for state and local

of any earlier installments, whether

taxes under Regulations section

caused by a change in estimate, failure to

Payments

1.1446-6(c)(1)(iii) or certified partner-level

make a payment, or a mistake.

Partnerships generally must make

items. With respect to the partnership’s

installment payments of estimated section

first installment payment, if the 2009 Form

1446 tax if they expect the aggregate tax

8804 has not yet been filed, an estimate

Specific Instructions

on the effectively connected taxable

is acceptable. However, if the partnership

income (ECTI) that is allocable to all

later determines that this estimate is

foreign partners to be $500 or more.

Part I—Determination of

incorrect, see Refiguring Estimated

Section 1446 Tax earlier.

Installment Payments

When To Make Estimated

Complete line 7 only if all of the

Complete Form 8804-W for each

Section 1446 Tax

following apply:

installment payment of section 1446 tax

•

The prior tax year consisted of 12

Payments

based on the information available at the

months,

time of the installment payment.

•

The installments are due by the 15th day

The partnership timely files (including

of the 4th, 6th, 9th, and 12th months of

Lines 1 through 6—Current

extensions) a U.S. return of partnership

the partnership’s tax year. If any date falls

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

Year Safe Harbor

on a Saturday, Sunday, or legal holiday,

year, and

•

the installment is due on the next regular

Lines 1a, 1e, 1i, and 1m. To determine

The amount of ECTI for the prior tax

business day.

the foreign partner’s allocable share of

year is not less than 50% of the ECTI

ECTI, see Effectively Connected Taxable

expected for the current tax year.

Underpayment of

Income in the Instructions for Forms

Furthermore, the Form 8804 on which the

8804, 8805, and 8813. With respect to

current year ECTI will be reported must

Estimated Section 1446

lines 1e, 1i, and 1m, enter the specified

be timely filed.

Tax

types of ECTI if such partner would be

If any of the above does not apply,

entitled to use a preferential rate on such

A partnership that does not make

skip line 7 and enter the amount from line

income or gain (see Regulations section

estimated section 1446 tax payments

6 on line 8.

1.1446-3(a)(2)).

when due may be subject to an

If the partnership qualifies to use the

If the partnership has net ordinary loss,

underpayment penalty for the period of

prior year safe harbor and chooses that

net short-term capital loss, or net 28%

underpayment. See Schedule A (Form

method, it must use that method to pay

rate loss, each net loss should be netted

8804) for details.

each of its installments during the tax

against the appropriate categories of

year. Furthermore, for each installment

How To Make Estimated

income and gain to determine the

payment, the average of that installment

amounts of income and gain to be

and prior installments during the tax year

Section 1446 Tax

entered on lines 1e, 1i, and 1m,

must be at least 25% of the amount that

respectively. See section 1(h) and Notice

Payments

satisfies the partnership’s section 1446

97-59, 1997-45 I.R.B. 7, for rules for

tax liability under the prior year safe

A partnership that is required to make an

netting gains and losses.

harbor. If the partnership does not satisfy

installment payment of section 1446 tax

Lines 1b, 1f, 1j, and 1n. Enter the

both of these requirements, it will not

must file Form 8813, Partnership

reduction amounts for state and local

qualify for the prior year safe harbor when

Withholding Tax Payment Voucher

taxes under Regulations section

determining any penalty due on Schedule

(Section 1446). Furthermore, the

1.1446-6(c)(1)(iii). See Reductions for

A (Form 8804).

partnership is generally required to notify

State and Local Taxes in the Instructions

If the partnership begins using the

each foreign partner of the section 1446

for Forms 8804, 8805, and 8813 for

prior year safe harbor method and it

tax paid on the partner’s behalf within 10

additional information. The netting rules

days of the installment payment due date.

determines later in the tax year (based

under section 1(h) and Notice 97-59 must

upon the standard option annualization

See Regulations section 1.1446-3(d) and

be considered in determining the category

method described later in these

the Instructions for Forms 8804, 8805,

of income the reduction amounts offset.

and 8813 for more information.

instructions) that it will not meet the 50%

Lines 1c, 1g, 1k, and 1o. Enter the

of ECTI requirement described in the last

Refiguring Estimated

reduction amounts resulting from certified

bulleted item above, it may make all

partner-level items received from foreign

subsequent installment payments using

Section 1446 Tax

partners using Form 8804-C. See

the standard option annualization method

If, after the partnership figures and makes

Certification of Deductions and Losses in

and it will not be subject to the penalty

an installment payment of estimated

the Instructions for Forms 8804, 8805,

determined on Schedule A (Form 8804).

section 1446 tax, it finds that its section

and 8813 for additional information. The

This change in method must be disclosed

1446 tax liability for the year will be more

netting rules under section 1(h) and

in a statement attached to the Form 8804

or less than originally estimated, it may

Notice 97-59 must be considered in

the partnership files for the current tax

Cat. No. 51675X

Instructions For Form 8804-W - 2010

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