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2014

Department of the Treasury

Internal Revenue Service

Instructions for Schedule A

(Form 8804)

Penalty for Underpayment of Estimated Section 1446 Tax for Partnerships

on the ECTI allocable to foreign

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

Section references are to the Internal

Revenue Code unless otherwise noted.

partners for 2013, provided that (1)

complete the rest of page 1 to

this amount is at least 50% of the sum

determine the underpayment for any

Future Developments

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

of the installment due dates.

For the latest information about

4l, 4p, and 4t of its 2014 Form 8804;

If there is an underpayment on

developments related to Schedule A

and (2) the tax year was for a full 12

line 12 (column (a), (b), (c), or (d)), go

(Form 8804) and its instructions, such

months. See the instructions for line 2

to Part VII to figure the penalty.

as legislation enacted after they were

below for more details.

Complete Parts IV through VI as

published, go to

appropriate if the partnership uses the

In these instructions, “Form 8804”

About-Schedule-A-Form-8804.

adjusted seasonal installment method

generally refers to the partnership's

and/or the annualized income

original Form 8804. However, an

General Instructions

installment method.

amended Form 8804 is considered

the original Form 8804 if the amended

Purpose of Form

Specific Instructions

Form 8804 is filed by the due date

Partnerships that have effectively

(including extensions) of the original

connected taxable income (ECTI)

Part I. Reasons for Filing

Form 8804.

allocable to foreign partners use

Also, for purposes of determining a

Schedule A (Form 8804) to

Adjusted seasonal installment

required installment, if an amended

determine:

method and/or annualized income

Form 8804 is filed for the prior tax

installment method. If the

Whether they are subject to the

year, then “prior tax year” includes the

partnership's income varied during the

penalty for underpayment of

amended Form 8804, but only if the

year because, for example, it

estimated tax and, if so,

amended Form 8804 is filed before

operated its business on a seasonal

The amount of the underpayment

the applicable installment due date.

basis, it may be able to lower or

penalty.

eliminate the amount of one or more

The penalty is figured separately

Who Must File

required installments by using the

for each installment due date.

adjusted seasonal installment method

Generally, the partnership does not

Therefore, the partnership may owe a

and/or the annualized income

have to file this schedule because the

penalty for an earlier due date even if

installment method.

IRS will figure the amount of the

it paid enough tax later to make up the

penalty and notify the partnership of

underpayment. This is true even if the

Example. A ski shop, which

any amount due. However, even if the

partnership is due a refund when its

receives most of its income during the

partnership does not owe a penalty,

return is filed. However, the

winter months, may benefit from using

complete and attach this schedule to

partnership may be able to reduce or

one or both of these methods to figure

the partnership's Form 8804 if the Part

eliminate the penalty by using the

its required installments. The

II, line 1 amount on page 1 is $500 or

annualized income installment

annualized income installment or

more and any of the following apply.

method or the adjusted seasonal

adjusted seasonal installment may be

installment method. See the

less than the required installment

1. The adjusted seasonal

instructions for Parts IV and V for

installment method is used.

under the current year safe harbor

details.

(increased by any reduction

2. The annualized income

recaptured under section 6655(e)(1)

installment method is used.

Exception to the Penalty

(B)) for one or more due dates. Using

Who Must Pay the

one or both of these methods may

A partnership will not have to pay a

reduce or eliminate the penalty for

penalty if the tax shown on line 5f of

Underpayment Penalty

its 2014 Form 8804 is less than $500.

those due dates.

Generally, a partnership is subject to

Use Parts IV through VI of

the penalty if it did not timely pay in

How To Use Schedule A

Schedule A (Form 8804) to figure one

installments at least the smaller of:

or more required installments. If Parts

Complete this schedule as follows.

1. The tax shown on line 5f of its

IV through VI are used for any

Check one or both of the boxes in

2014 Form 8804; or

payment due date, those Parts must

Part I that apply. If the partnership

be used for all subsequent payment

2. The total section 1446 tax that

checks a box in Part I, attach

due dates. To arrive at the amount of

would have been due for 2013,

Schedule A (Form 8804) to Form

each required installment, Part VI

without regard to reductions for

8804. Be sure to check the box on

uses the smallest of:

certified foreign partner-level items,

Form 8804, line 8.

Aug 20, 2014

Cat. No. 36325U

Instructions For Schedule A (Form 8804) - Penalty For Underpayment Of Estimated Section 1446 Tax For Partnerships - 2014

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