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Example. An amusement park with a

Annualization Periods for Corporate

Any item identified in Regulations

calendar year as its tax year receives the

Estimated Tax, on or before the due date

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

largest part of its ECTI during a 6-month

of the first required installment payment.

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

period, May through October. To compute

Once made, the election is irrevocable for

A section 481(a) adjustment; and

its base period percentage for this

the particular tax year.

Net gain or loss from the disposition of

6-month period, the amusement park

25% or more of the fair market value of the

figures its ECTI for each May–October

partnership's business assets during the

1st

2nd

3rd

4th

period in 2010, 2011, and 2012. It then

tax year.

Install-

divides the ECTI for each May–October

ment

These extraordinary items must be

period by the total ECTI for that particular

accounted for in the appropriate

Standard

tax year. The resulting percentages are

annualization period. However, a section

Option

69% (.69) for May–October 2010, 74%

481(a) adjustment (unless the partnership

Option 1

(.74) for May–October 2011, and 67%

makes the alternative choice under

Option 2

(.67) for May–October 2012. Because the

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

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

is treated as an extraordinary item

the base period percentage for May

Line 31—Foreign Partner's

occurring on the first day of the tax year in

through October 2013 is 70%. Therefore,

which the item is taken into account in

Allocable Share of ECTI

the amusement park qualifies for the

determining ECTI.

adjusted seasonal installment method.

Enter on lines 31a through 31e the foreign

For more information regarding

partner's allocable share of ECTI for the

Line 15

extraordinary items, see Regulations

months entered for each annualization

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

If the partnership has certain extraordinary

period in columns (a) through (d) on

examples in Regulations section

items, special rules apply. Do not include

line 30. To determine the foreign partner's

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

on line 15 the de minimis extraordinary

allocable share of ECTI, see Effectively

section 1.6655-3(d)(3).

items that the partnership chooses to

Connected Taxable Income in the

include on line 22b. See Extraordinary

Instructions for Forms 8804, 8805, and

De minimis rule. Extraordinary items

items, earlier.

8813.

identified above resulting from a particular

transaction that total less than $1 million

Line 22b

If the partnership has certain

(other than a section 481(a) adjustment)

If the partnership has certain extraordinary

extraordinary items, special rules apply.

may be annualized using the general rules

items of $1 million or more from a

Do not include on line 31a, 31b, 31c, 31d,

of Regulations section 1.6655-2(f), or, if

transaction, or a section 481(a)

or 31e the de minimis extraordinary items

the partnership chooses, may be taken

adjustment, special rules apply. Include

that the partnership chooses to include on

into account after annualizing the ECTI for

these amounts on line 22b for the

line 33a, 33e, 33i, 33m, or 33q,

the annualization period.

appropriate period. Also, include on

respectively. See Extraordinary items,

line 22b the de minimis extraordinary

earlier.

Part II—Adjusted Seasonal

items that the partnership chooses to

Installment Method

Note. Enter on lines 31c through 31e the

exclude from line 15. See Extraordinary

specified types of ECTI if (a) such partner

items, earlier.

Note. Part II does not reflect the lower

would be entitled to use a preferential rate

preferential rates permitted under

Line 23

on such income or gain (see Regulations

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

section 1.1446-3(a)(2)) and (b) the

Enter the reduction to the line 22c amount

were omitted because, for most taxpayers,

partnership has sufficient documentation

for state and local taxes under

the income reported in Part II will be

to meet the requirements of Regulations

Regulations section 1.1446-6(c)(1)(iii) and

predominantly (or exclusively) ordinary

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

for certified foreign partner-level items

income. If the partnership wishes to

A partner may be entitled to use a

submitted under Regulations section

consider lower preferential rates for Part II

preferential rate on the following types of

1.1446-6. See Certification of Deductions

(and if the requirements outlined in the

income or gain.

and Losses in the Instructions for Forms

Note in the line 31 instructions are met), it

8804, 8805, and 8813 for additional

must attach a schedule which

1. Line 31c—See section 1(h)(4) and

information.

the instructions for line 18, Schedule D

appropriately expands lines 15 and 22

(Form 1040), for more information

through 25 to show the applicable special

Part III—Annualized

regarding 28% rate gain.

types of income or gain and the applicable

Income Installment

percentages (see, for example, lines 33

2. Line 31d—See section 1(h)(6) and

and 34 of this schedule).

Method

the instructions for line 19, Schedule D

(Form 1040), for more information

Complete this part only if the

Line 30—Annualization Periods

regarding unrecaptured section 1250 gain.

partnership's base period percentage for

3. Line 31e—Adjusted net capital gain

any 6 consecutive months of the tax year

Enter in the space on line 30, columns (a)

equals or exceeds 70%. Figure the base

is net capital gain, as defined in section

through (d), respectively, the annualization

1222(11), reduced (but not below zero) by

period percentage using the 6-month

periods that the partnership is using,

the sum of (a) unrecaptured section 1250

period in which the partnership normally

based on the options listed below. For

gain and (b) 28% rate gain, plus qualified

receives the largest part of its ECTI. The

example, if the partnership elects Option

base period percentage for any period of 6

dividend income. See section 1(h)(3).

1, enter on line 30 the annualization

consecutive months is the average of the

periods 2, 4, 7, and 10, in columns (a)

If the partnership has net ordinary loss,

three percentages figured by dividing the

through (d), respectively.

net short-term capital loss, or net 28% rate

ECTI for the corresponding

loss, each net loss should be netted

Use Option 1 or Option 2 only if

6-consecutive-month period in each of the

against the appropriate categories of

the partnership elected to use

3 preceding tax years by the ECTI for

income and gain to determine the

one of these options by filing

each of their respective tax years.

CAUTION

amounts of income and gain to be entered

Form 8842, Election To Use Different

on lines 33i, 33m, and 33q, respectively.

Instructions for Form 8804-W (2013)

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Instructions For Form 8804-W (Worksheet) - Installment Payments Of Section 1446 Tax For Partnerships - 2013 Page 3

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