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under Regulations section

Therefore, the amusement park

1st

2nd

3rd

4th

1.1446-3(a)(2). These were omitted

qualifies for the adjusted seasonal

Install-

because, for most taxpayers, the

installment method.

ment

income reported in Part IV will be

Standard

Line 15. If the partnership has certain

predominantly (or exclusively)

Option

extraordinary items, special rules

ordinary income. If the partnership

Option 1

apply. Do not include on line 15 the de

wishes to consider lower preferential

Option 2

minimis extraordinary items that the

rates for Part IV (and if the

partnership chooses to include on

requirements outlined in the third

line 22b. See Extraordinary items,

Line 31. Enter on lines 31a through

paragraph of the line 31 instructions

earlier.

31e the ECTI allocable to all foreign

are met), it must attach a statement

partners for the months entered for

Line 22b. If the partnership has

which appropriately expands lines 15

each annualization period in columns

certain extraordinary items of $1

and 22 through 25 to show the

(a) through (d) on line 30.

million or more from a transaction, or

applicable special types of income or

If the partnership has certain

a section 481(a) adjustment, special

gain and the applicable percentages

extraordinary items, special rules

rules apply. Include these amounts on

(see, for example, lines 33 and 34 of

apply. Do not include on line 31a, 31b,

line 22b for the appropriate period.

this schedule). Also, Part IV lines 15

31c, 31d, or 31e the de minimis

Also include on line 22b the de

and 22 through 25 do not provide the

extraordinary items that the

minimis extraordinary items that the

separate entries for corporate and

partnership chooses to include on

partnership chooses to exclude from

non-corporate partners necessary to

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

line 15. See Extraordinary items,

apply the rates on line 25a and b. A

respectively. See Extraordinary items,

earlier.

partnership with corporate and

earlier.

non-corporate partners completing

Line 23. Enter the amount by which

Part IV must attach a statement which

With respect to lines 31b through

line 22c is being reduced for state and

appropriately expands lines 15 and 22

31e, enter the specified types of

local taxes under Regulations section

through 25 to show the amounts

income allocable to non-corporate

1.1446-6(c)(1)(iii) and for certified

allocable to both types of partners.

partners if (a) the partners would be

foreign partner-level items submitted

The partnership may use the

entitled to use a preferential rate on

using Form 8804-C. See Reductions

adjusted seasonal installment method

such income or gain (see Regulations

for State and Local Taxes and

only if the partnership's base period

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

Certification of Deductions and

percentage for any 6 consecutive

partnership has sufficient

Losses in the Instructions for Forms

months of the tax year is 70% or

documentation to meet the

8804, 8805, and 8813 for additional

more. The base period percentage for

requirements of Regulations section

information.

any period of 6 consecutive months is

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

Part V. Annualized Income

the average of the three percentages

If the partnership has net ordinary

figured by dividing the ECTI for the

Installment Method

loss, net short-term capital loss, or net

corresponding 6 consecutive month

28% rate loss, each net loss should

period in each of the 3 preceding tax

Line 30. Annualization periods.

be netted against the appropriate

years by the ECTI for each of their

Enter on line 30, columns (a) through

categories of income and gain to

respective tax years. Figure the base

(d), respectively, the annualization

determine the amounts of income and

period percentage using the 6-month

periods for the option listed below. For

gain to be entered on lines 31b, 31c,

period in which the partnership

example, if the partnership elected

31d, and 31e, respectively. See

normally receives the largest part of

Option 1, enter on line 30 the

section 1(h) and Notice 97-59,

its ECTI.

annualization periods 2, 4, 7, and 10,

1997-45 I.R.B. 7, for rules for netting

in columns (a) through (d),

Example. An amusement park

gains and losses.

respectively.

with a 2014 calendar tax year

Line 32. Annualization amounts.

receives the largest part of its taxable

Use Option 1 or Option 2

Enter on line 32, columns (a) through

income during a 6-month period, May

only if the partnership

(d), respectively, the annualization

through October. To compute its base

elected to do so by filing

amounts shown in the tables below for

CAUTION

period percentage for this 6-month

Form 8842, Election To Use Different

the option used for line 30. For

period, the amusement park figures its

Annualization Periods for Corporate

example, if the partnership elected

ECTI for each May–October period in

Estimated Tax, by the due date of the

Option 1, enter on line 32 the

2011, 2012, and 2013. It then divides

first required installment payment.

annualization amounts 6, 3, 1.71429,

the ECTI for each May–October

Once made, the election is

and 1.2, in columns (a) through (d),

period by the total ECTI for that

irrevocable for the particular tax year.

respectively.

particular tax year. The resulting

percentages are 69% (.69) for May–

October 2011, 74% (.74) for May–

October 2012, and 67% (.67) for

May–October 2013. Because the

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

70%, the base period percentage for

May through October 2014 is 70%.

Instructions for Schedule A (Form 8804) (2014)

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Instructions For Schedule A (Form 8804) - Penalty For Underpayment Of Estimated Section 1446 Tax For Partnerships - 2014 Page 3

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