Instructions For Schedule A (Form 8804) - 2008 printable pdf download

2 0 08

Department of the Treasury

Internal Revenue Service

Instructions for Schedule A

(Form 8804)

2. The annualized income installment

box in Part I, attach Schedule A (Form

Section references are to the Internal

method is used.

8804) to Form 8804. Be sure to check the

Revenue Code unless otherwise noted.

box on Form 8804, line 8.

•

If Part II, line 1 is $500 or more,

Who Must Pay the

What’s New

complete the rest of page 1 to determine

Underpayment Penalty

the underpayment for any of the

•

Final regulations were issued under

installment due dates.

Generally, a partnership is subject to the

•

section 1.1446-6. These final regulations

If there is an underpayment on line 12

penalty if it did not timely pay in

address special rules to reduce a

(column (a), (b), (c), or (d)), go to Part VII

installments at least the smaller of:

partnership’s section 1446 tax with

to figure the penalty.

•

1. The tax shown on line 5e of its

Complete Parts IV through VI as

respect to a foreign partner’s allocable

2008 Form 8804 or

appropriate if the partnership uses the

share of effectively connected taxable

2. The total section 1446 tax that

adjusted seasonal installment method

income.

•

would have been due for 2007, without

and/or the annualized income installment

Effective July 29, 2008, Form 8804-C,

regard to reductions for certified foreign

method.

Certificate of Partner-Level Items to

partner-level items, on the ECTI allocable

Reduce Section 1446 Withholding, is the

to foreign partners for 2007, provided that

sole method for foreign partners to certify

(1) this amount is at least 50% of the sum

partner-level items.

Specific Instructions

of the amounts shown on lines 4d, 4h, 4l,

•

The instructions for lines 23 and 33

and 4p of its 2008 Form 8804 and (2) the

have been modified to reflect the

tax year was for a full 12 months. See the

Part I. Reasons for Filing

reduction for state and local taxes

instructions for line 2 below for more

withheld and remitted on behalf of the

Adjusted seasonal installment method

details.

foreign partner on the partner’s allocable

and/or annualized income installment

share of effectively connected taxable

In these instructions, “Form 8804”

method. If the partnership’s income

income permitted under Regulations

generally refers to the partnership’s

varied during the year because, for

section 1.1446-6(c)(1)(iii).

original Form 8804. However, an

example, it operated its business on a

•

The instructions for line 33 have been

amended Form 8804 is considered the

seasonal basis, it may be able to lower or

modified to reflect the fact that

original Form 8804 if the amended Form

eliminate the amount of one or more

unrecaptured section 1250 gains may be

8804 is filed by the due date (including

required installments by using the

offset by deductions and losses provided

extensions) of the original Form 8804.

adjusted seasonal installment method

on valid partner certificates under the

and/or the annualized income installment

Also, for purposes of determining a

netting rules of section 1(h) and Notice

method.

required installment, if an amended Form

97-59.

8804 is filed for the prior tax year, then

Example. A ski shop, which receives

“prior tax year” includes the amended

most of its income during the winter

General Instructions

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

installment due date.

required installments. The annualized

Purpose of Form

income installment or adjusted seasonal

The penalty is figured separately for

Partnerships that have effectively

installment may be less than the required

each installment due date. Therefore, the

connected taxable income (ECTI)

installment under the current year safe

partnership may owe a penalty for an

allocable to foreign partners use

harbor (increased by any reduction

earlier due date even if it paid enough tax

Schedule A (Form 8804) to determine:

recaptured under section 6655(e)(1)(B))

later to make up the underpayment. This

•

Whether they are subject to the penalty

for one or more due dates. Using one or

is true even if the partnership is due a

for underpayment of estimated tax and, if

both of these methods may reduce or

refund when its return is filed. However,

so,

eliminate the penalty for those due dates.

the partnership may be able to reduce or

•

The amount of the underpayment

eliminate the penalty by using the

Use Parts IV through VI on pages 2

penalty.

annualized income installment method or

through 4 of Schedule A (Form 8804) to

the adjusted seasonal installment

figure one or more required installments.

Who Must File

method. See the instructions for Parts IV

If Parts IV through VI are used for any

Generally, the partnership does not have

and V for details.

payment due date, those Parts must be

to file this schedule because the IRS will

used for all subsequent payment due

Exception to the Penalty

figure the amount of the penalty and

dates. To arrive at the amount of each

notify the partnership of any amount due.

required installment, Part VI uses the

A partnership will not have to pay a

However, even if the partnership does not

smallest of:

penalty if the tax shown on line 5e of its

•

owe a penalty, complete and attach this

The adjusted seasonal installment (if

2008 Form 8804 is less than $500.

schedule to the partnership’s Form 8804

applicable),

•

if the Part II, line 1 amount on page 1 is

The annualized income installment (if

How To Use Schedule A

$500 or more and either of the following

applicable), or

Complete this schedule as follows:

•

applies:

The current year safe harbor

•

1. The adjusted seasonal installment

Check one or both of the boxes in Part

(increased by any reduction recaptured

method is used.

I that apply. If the partnership checks a

under section 6655(e)(1)(B)).

Cat. No. 36325U

Instructions For Schedule A (Form 8804) - 2008

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