Instructions For Form 8886 - Reportable Transaction Disclosure Statement (Page 6 of 7) in pdf

provided. If additional space is needed,

adjustments) to the basis of property,

Line 4

write “See Additional List” and attach a

status as an entity exempt from federal

Do not report more than one

list.

income taxation, and any other tax

transaction on this form unless the

consequences that may reduce a

Reportable transaction numbers

transactions are the same or

taxpayer’s federal income tax liability by

(formerly known as tax shelter

substantially similar. See Substantially

affecting the amount, timing, character,

registration numbers or registration

Similar on page 1.

or source of any item of income, gain,

numbers) are issued to material

expense, loss, or credit. Check the

advisors who file a statement disclosing

Line 5

“Other” box for tax benefits not

a reportable transaction under section

specifically identified by a box and

6111. Material advisors are required to

If you participated in the transaction

identify the tax benefits in the space

through other entities, indicate whether

provide this number to investors/

provided (for example, status as an

each entity is a partnership, S

advisees.

entity exempt from federal income

corporation, or trust. In addition, if the

taxation). If you need more space,

Line 2

entity is foreign, check the box for

follow the instructions under How To

“Foreign”. On line 5b, provide the full

Check the box(es) for all categories that

Complete Form 8886 on page 5.

name of the entity. On line 5c, enter the

apply to the transaction being reported.

entity’s EIN (if known). Use hyphens

The reportable transaction categories

Line 7b

when entering the EIN. On line 5d,

are described under Participation in a

enter the date you received the

Describe the reportable transaction you

Reportable Transaction on page 1.

Schedule K-1 from the entity. Enter

entered into and the relevant facts and

Note. The category for significant

“none” if Schedule K-1 was not

tax benefits for all affected years that

book-tax difference transactions has

received. If you are reporting more than

caused the transaction to be reportable.

been eliminated by Notice 2006-6.

one entity, use a separate column for

Describe each step of the transaction

Transactions with a significant book-tax

each entity. Attach additional sheets for

including all information known to you.

difference that would have been

more than two entities.

Include in your description other parties

required to be disclosed after January

to the transaction and, if known,

5, 2006, are no longer reportable

Line 6

assumptions of liabilities or other

transactions.

obligations, satisfaction of liabilities or

Enter the name, address, and social

obligations, sales of property or

However, if the transaction is also a

security number (SSN) or EIN (if

interests in property, the formation and

transaction described in any of the

known) for each individual or entity to

remaining reportable transaction

dissolution of entities, and any

whom you paid a fee with regard to the

categories, it must still be disclosed and

agreements between or among parties

transaction if that individual or entity

the box for all appropriate categories

to the transaction. Also describe any

promoted, solicited, or recommended

(that is, a, b, c, d, e or f) must be

tax result protection with respect to the

your participation in the transaction, or

checked.

transaction. The term “tax result

provided tax advice related to the

protection” includes insurance company

transaction. Also, enter the approximate

For more details, see Transactions

and other third party products

fees paid to each of the individuals or

With a Significant Book-Tax Difference

commonly described as tax result

entities. These fees include payment in

on page 3 and Notice 2006-6.

insurance. Include, if known, the

whatever form, whether in cash or in

Note. The category for brief-asset

relevant dates and the amounts

kind, for a tax strategy or for advice

holding period has been eliminated for

involved in the steps described.

(whether or not tax advice). Fees also

transactions entered into on or after

Amounts involved include cash, fair

include consideration for services to:

August 3, 2007. However, this does not

•

market value of property or services

Analyze the transaction (whether or

relieve taxpayers of any disclosure

transferred or acquired, adjustments to

not related to the tax consequences of

obligations for brief asset holding

basis, valuation of notes, obligations,

the transaction),

transactions that were entered into

•

shares, or other securities. Describe, if

Implement the transaction,

before August 3, 2007. The rules for

•

known, the relationship between the

Document the transaction, or

brief asset holding period reportable

•

steps of the transaction and how each

Prepare tax returns to the extent the

transactions entered into before August

step relates to why the transaction is

return preparation fees are

3, 2007, are contained in Regulations

reportable. Your description should

unreasonable.

section 1.6011-4 in effect prior to

include the relevance, if known, of any

You are also treated as paying fees

August 3, 2007. For more details,

party (including but not limited to

to an advisor if you know or should

seeTransactions With a Brief Asset

participants in the transaction) listed in

know that an amount you paid will be

Holding Period on page 3.

line 8.

paid indirectly to the advisor, such as

Describe the economic and business

If the transaction is a listed

through a referral fee or fee-sharing

reasons for the transaction and its

transaction or transaction of

arrangement. A fee does not include

structure. Describe market or business

interest, you must check the

amounts paid to a person, including an

CAUTION

conditions creating the tax benefit(s) or

listed transaction box or transaction of

advisor, in that person’s capacity as a

consequence(s) and the transaction’s

interest box in addition to any others

party to the transaction.

financial reporting if known.

that may apply.

Line 7a

If you checked box 2b, explain how

Line 3

your disclosure of information

Please check the box representing the

concerning the transaction was limited

Identify the notice, revenue ruling,

type of tax benefit the transaction will

(for example, by contract or verbal

regulation, announcement, or other

reflect on your tax return. There may be

agreement) and the nature and extent

published guidance that identified the

more than one tax benefit to your

of the disclosure limitations. See

transaction as a listed transaction or a

transaction. A tax benefit includes but is

Regulations section 1.6011-4(b)(3) for

transaction of interest. For listed

not limited to the following: deductions,

more details.

transactions, identify the guidance as

exclusions from gross income,

shown in Notice 2009-59, or later IRS

nonrecognition of gain, tax credits,

If you checked box 2c, describe the

guidance.

adjustments (or absence of

terms of the contractual protection. See

-6-

Instructions for Form 8886 (Rev. 3-2010)

Instructions For Form 8886 - Reportable Transaction Disclosure Statement Page 6

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