Instructions For Form 8886 - Reportable Transaction Disclosure Statement (Page 3 of 7) in pdf

or carryover to another year. A section

For existing guidance, see Notice

be disclosed. The request for a ruling

165 loss does not include any portion of

2009-55, 2009-31 I.R.B. 170, available

must be submitted to the IRS by the

a loss, attributable to a capital loss

at IRS.gov/pub/irs-irbs/irb09-31.pdf. The

date Form 8886 would otherwise be

carryback or carryover from another

IRS may issue a new, or update the

required to be filed. See Regulations

year, that is treated as a deemed capital

existing, notice, regulation, or other form

section 1.6011-4(f). For more

loss under section 1212.

of guidance that identifies a transaction

information on requesting a ruling, see

as a transaction of interest.

Rev. Proc. 2017-1, 2017-1 I.R.B. 1,

In determining whether a transaction

available at

IRS.gov/pub/irs-irbs/

results in a taxpayer claiming a loss that

You have participated in a

irb17-01.pdf, or subsequent IRS

meets the threshold amounts over a

transaction of interest if you are one of

guidance. The potential obligation of the

combination of tax years as described

the types or classes of individuals or

taxpayer to disclose the transaction will

above, only losses claimed in the tax

entities identified as participants in the

not be suspended during the period that

year that the transaction is entered into

transaction in the published guidance

the ruling request is pending.

and the 5 succeeding tax years are

describing the transaction of interest.

combined.

Recordkeeping

Exceptions to Reportable

The types of losses included in this

Transaction Categories,

You must keep a copy of all documents

category are section 165 losses,

and other records related to a reportable

Published Guidance

including amounts deductible under a

transaction. See Regulations section

provision that treats a transaction as a

A transaction is not considered a

1.6011-4(g) for more details.

sale or other disposition or otherwise

reportable transaction if the IRS makes

results in a deduction under section

a determination in published guidance

When and How To File

165. However, this category does not

that it is not subject to the reporting

Attach Form 8886 to your income tax

include losses described in Rev. Proc.

requirements. For more information, see

return or information return (including a

2004-66, 2004-50 I.R.B. 966, available

Rev. Proc. 2004-66; Rev. Proc.

partnership, S corporation, or trust

IRS.gov/pub/irs-irbs/irb04-50.pdf

(or

2004-67, 2004-50 I.R.B. 967, available

return), including amended returns, for

future published guidance).

at IRS.gov/pub/irs-irbs/irb04-50.pdf;

each tax year in which you participated

You have participated in a loss

Rev. Proc. 2004-68; and Rev. Proc.

in a reportable transaction. If a

transaction if your tax return reflects a

2007-20. The IRS may also determine

reportable transaction results in a loss

section 165 loss that equals or exceeds

by individual letter ruling that an

or credit carried back to a prior tax year,

the applicable threshold amount. If you

individual letter ruling request satisfies

attach Form 8886 to an application for

are a partner, shareholder, or

the reporting requirements. See

tentative refund (Form 1045 or 1139) or

beneficiary of a pass-through entity

Request for

Ruling, later, for more

amended return for the carryback years.

(partnership, S corporation, or trust),

information on submitting a letter ruling

you have participated in a loss

request.

Also file separately. If this is an

transaction if your tax return reflects a

Shareholders of Foreign

initial year filing of Form 8886, send an

section 165 loss allocable to you from

exact copy of the form to the Office of

Corporations

the pass-through entity (disregarding

Tax Shelter Analysis (OTSA) at the

netting at the entity level) that equals or

Special rules apply to determine

following address when you file the form

exceeds the applicable threshold

whether a reporting shareholder of a

with your tax return:

amount. For this purpose, a tax return is

foreign corporation participated in a

deemed to reflect the full amount of the

reportable transaction. A reporting

Internal Revenue Service

section 165 loss allocable to the

shareholder means a U.S. shareholder

OTSA Mail Stop 4915

taxpayer, regardless of whether all or

in a controlled foreign corporation, or a

1973 Rulon White Blvd.

part of the loss enters in the

10% shareholder (by vote or value) of a

Ogden, Utah 84201

computation of a net operating loss

qualified electing fund. For all

under section 172 or net capital loss

categories of reportable transactions

If you file your income tax return

under section 1212 that the taxpayer

except transactions of interest, a

electronically, the copy sent to OTSA

may carry back or carry over to another

reporting shareholder participates in a

must show exactly the same

year.

reportable transaction if the foreign

information, word for word, provided

corporation would be considered to

Transactions of Interest

with the electronically filed return and it

participate in the transaction if it were a

must be provided on the official IRS

A transaction of interest is a transaction

domestic corporation filing a tax return

Form 8886 or an exact copy of the form.

that is the same as or substantially

reflecting items from the transaction. A

If you use a computer-generated or

similar to one of the types of

reporting shareholder of a foreign

substitute Form 8886, it must be an

transactions that the IRS has identified

corporation participates in a transaction

exact copy of the official IRS form. See

by notice, regulation, or other form of

of interest if the published guidance

the instructions for your income tax

published guidance as a transaction of

identifying the transaction includes the

return for information on electronic filing

interest. It is a transaction that the IRS

reporting shareholder among the types

and substitute forms.

and Treasury Department believe has a

or classes of individuals or entities

potential for tax avoidance or evasion,

Special Filing Rules

identified as participants. See

but for which there is not enough

Regulations section 1.6011-4(c)(3)(i)(G)

60-Day OTSA Extension

information to determine if the

for details.

transaction should be identified as a tax

If you are a partner in a partnership,

Request for Ruling

avoidance transaction. The requirement

shareholder in an S corporation, or

to disclose transactions of interest

beneficiary of a trust who receives a

You may request a ruling from the IRS

applies to transactions of interest

timely Schedule K-1 less than 10

to determine whether a transaction must

entered into after November 1, 2006.

calendar days before your return due

Instructions for Form 8886 (Rev. 8-2017)

-3-

Instructions For Form 8886 - Reportable Transaction Disclosure Statement Page 3

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