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section 6655(e)(1)(B)) for one or more

averaged with all prior installment

Section 1445(a) or 1445(e) tax

due dates. Using one or both of these

payments, must have been 25% of

withheld from or paid by the

methods may reduce or eliminate the

the partnership's total section 1446

partnership filing this Schedule A

penalty for those due dates.

tax liability under the prior year safe

(Form 8804) during the tax year for a

harbor,

Use Parts IV through VI of

disposition of a U.S. real property

Schedule A (Form 8804) to figure one

The prior tax year consisted of 12

interest. See the instructions for Form

or more required installments. If Parts

months,

8804, lines 6d and 6e, in the

Instructions for Forms 8804, 8805,

IV through VI are used for any

The partnership timely files

and 8813.

payment due date, those Parts must

(including extensions) a U.S. return of

be used for all subsequent payment

partnership income (e.g., Form 1065)

Column (a). Enter payments made

due dates. To arrive at the amount of

for the prior tax year, and

by the date on line 4, column (a).

each required installment, Part VI

The amount of ECTI for the prior tax

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

uses the smallest of:

year is not less than 50% of the ECTI

payments made on or before the date

The adjusted seasonal installment

shown on the current year Form 8804

on line 4 for that column and after the

(if applicable),

that is (or will be) timely filed.

date on line 4 of the preceding

The annualized income installment

If the partnership is not permitted to

column.

(if applicable), or

use the prior year safe harbor method

The current year safe harbor

Line 12. If any of the columns in

because any of the necessary

(increased by any reduction

line 12 shows an underpayment,

conditions described above is not

recaptured under section 6655(e)(1)

complete Part VII to figure the penalty.

met, skip line 2 and enter on line 3 the

(B)).

amount from line 1.

Parts IV Through VI

Follow the steps below to

Note. If the partnership qualifies for

determine which parts of the form

Extraordinary items. Generally,

and uses the exception under

have to be completed:

under the annualized income

Regulations section 1.1446-3(b)(3)(ii)

If the partnership is using only the

installment method, extraordinary

to switch to the standard option

adjusted seasonal installment

items must be taken into account after

annualization method during the tax

method, check the applicable box in

annualizing the ECTI for the

year, the partnership should include

Part I and complete Parts IV and VI of

annualization period. Similar rules

on line 2 the total of all installment

Schedule A (Form 8804).

apply in determining ECTI under the

payments that were made during the

If the partnership is using only the

adjusted seasonal installment

tax year under both the prior year safe

annualized income installment

method. An extraordinary item

harbor method and the standard

method, check the applicable box in

includes:

option annualization method. Attach a

Part I and complete Parts V and VI of

Any item identified in Regulations

statement that explains the

Schedule A (Form 8804).

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

computation.

If the partnership is using both

(3), (4), (7), and (8);

methods, check both of the boxes in

Part III. Figuring the

A section 481(a) adjustment; and

Part I and complete all three parts

Underpayment

Net gain or loss from the disposition

(Parts IV through VI) of Schedule A

of 25% or more of the fair market

(Form 8804).

Line 6. Enter the estimated tax

value of the partnership's business

payments made by the partnership for

assets during the tax year.

Part II. Current Year and

its tax year as indicated below.

These extraordinary items must be

Prior Year Safe Harbors

Include any overpayment from line 13

accounted for in the appropriate

of the partnership's 2012 Form 8804

annualization period. However, a

Line 2 (prior year safe harbor).

that was credited to the partnership's

section 481(a) adjustment (unless the

Enter the total section 1446 tax that

first installment period on its 2013

partnership makes the alternative

would have been due for 2012,

Form 8804. If an installment is due on

choice under Regulations section

without regard to reductions for

a Saturday, Sunday, or legal holiday,

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

certified foreign partner-level items on

payments made on the next day that

extraordinary item occurring on the

the ECTI allocable to foreign partners

is not a Saturday, Sunday, or legal

first day of the tax year in which the

for 2012.

holiday are considered made on the

item is taken into account in

The partnership may generally use

due date to the extent the payment is

determining ECTI.

the prior year safe harbor only if it paid

applied against that required

the required amount using that

For more information regarding

installment.

method for each of its installment

extraordinary items, see Regulations

payments of section 1446 tax during

Also include on line 6 any:

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

the tax year. However, see

Section 1446 tax paid or withheld

examples in Regulations section

Regulations section 1.1446-3(b)(3)(ii)

by another partnership in which the

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

for an exception. Also, see the Note

partnership filing this Schedule A

Regulations section 1.6655-3(d)(3).

below. In addition, the partnership

(Form 8804) was a partner during the

De minimis rule. Extraordinary

may only use the prior year safe

tax year. See the instructions for Form

items identified above resulting from a

harbor if all of the following apply:

8804, lines 6b and 6c, in the

particular transaction that totals less

Each installment payment that was

Instructions for Forms 8804, 8805,

than $1 million (other than a section

made during the tax year, when

and 8813.

-2-

Instructions for Schedule A (Form 8804) (2013)

Instructions For Schedule A (Form 8804) - Penalty For Underpayment Of Estimated Section 1446 Tax For Partnerships - 2013 Page 2

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