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Vorm 1120-F Juhised P-loendi jaoks

Juhised ajakava P (vorm 1120-F), välispartnerite huvide loetelu partnerluses

Rev. 2023

Seotud vormid

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Department of the Treasury  
Internal Revenue Service  
2023  
Instructions for Schedule P  
(Form 1120-F)  
List of Foreign Partner Interests in Partnerships  
Section references are to the Internal Revenue  
Code unless otherwise noted.  
determining the average apportioned  
value included in the corporation's U.S.  
assets for purposes of computing the  
branch profits tax. The U.S. assets and  
partner share of booked liabilities and  
interest expense of the partnership are  
also coordinated with the interest expense  
allocation computations reported on  
Schedule I (Form 1120-F).  
Parts IV and V are used to report  
information regarding a foreign corporate  
partner's transfer of an interest in a  
partnership and the calculation of gain or  
loss on the transfer when the partnership  
directly or indirectly either is engaged in  
the conduct of a trade or business within  
the United States or holds any U.S. real  
property interests. See sections 864(c)(8)  
and 897(g).  
indirect ownership of such interests. See  
section 875(1). The foreign corporation's  
distributive share of income from a  
domestic partnership and certain foreign  
partnership interests is reported to the  
partner on Schedule K-3 (Form 1065),  
together with the corporation's allocable  
share of partnership liabilities. If the  
partnership is engaged in a trade or  
business directly or indirectly through a  
lower-tier partnership and has ECI to  
report in the distributive share of a foreign  
partner, it is responsible for making  
quarterly installment payments of  
Future Developments  
For the latest information about  
developments related to Schedule P  
(Form 1120-F) and its instructions, such  
as legislation enacted after they were  
published, go to IRS.gov/Form1120F.  
General Instructions  
Purpose of Schedule  
withholding tax under section 1446 on the  
foreign partner's allocable share of  
estimated effectively connected taxable  
income (ECTI) and reporting to the foreign  
partner, on Form 8805, Foreign Partner’s  
Information Statement of Section 1446  
Withholding Tax, the amounts of ECTI and  
section 1446(a) tax withheld for the tax  
year.  
Schedule P (Form 1120-F) is used to (1)  
identify and reconcile the foreign  
corporation's directly held partnership  
interests with the distributive shares of  
partnership effectively connected income  
(ECI), or expenses allocable to ECI, and  
the foreign corporation's effectively  
connected outside tax basis in each  
interest, and/or (2) report information  
regarding a foreign corporate partner's  
transfer of an interest in a partnership and  
the calculation of gain or loss on the  
transfer when the partnership directly or  
indirectly either is engaged in the conduct  
of a trade or business within the United  
States or holds any U.S. real property  
interests (see sections 864(c)(8) and  
897(g)).  
Who Must Complete  
Schedule P  
A foreign corporation that is directly or  
indirectly engaged in a trade or business  
within the United States is required to file  
Schedule P (Form 1120-F) for all directly  
owned partnership interests that have  
gross ECI, and/or expenses allocable to  
gross ECI, included in its distributive share  
of income reported to the corporation on  
Schedule K-3 (Form 1065). If the foreign  
corporation treats any of its distributive  
share of partnership net income or loss  
from a partnership that is not engaged in a  
trade or business within the United States  
as ECI with another trade or business of  
the corporation, the corporation's entire  
distributive share of items of income and  
expense from any such partnership must  
also be reconciled between ECI and  
non-ECI and reported on Schedule P.  
A foreign corporation must also  
complete Schedule P if it transfers an  
interest in a partnership that directly or  
indirectly either is engaged in the conduct  
of a trade or business within the United  
States or holds any U.S. real property  
interests. Unless an exception applies, the  
transferee of that partnership interest must  
withhold tax on the amount realized on the  
transfer and report on Form 8288-A,  
Statement of Withholding on Certain  
Dispositions by Foreign Persons, the  
amount realized and the amount of section  
1446(f) tax withheld on the transfer.  
Part I is used to identify all partnership  
interests the foreign corporation directly  
owns from which it has a distributive share  
of income or loss that is effectively  
connected with a trade or business within  
the United States.  
Exceptions From Filing  
Schedule P  
Part II is used to reconcile the foreign  
corporation's distributive share of ECI and  
allocable expenses with the total income  
and expenses reported to it on  
Do not file Schedule P if none of the  
distributive shares from any of the  
A foreign corporation may be engaged  
in a trade or business within the United  
States either directly through its own  
non-partnership related activities or  
Schedule K-3 (Form 1065), Partner's  
Share of Income, Deductions, Credits, etc.  
– International.  
corporation's partnership interests include  
ECI, or expenses allocable to ECI, and  
there has not been a transfer of an interest  
in a partnership that directly or indirectly  
either is engaged in the conduct of a trade  
or business within the United States or  
holds any U.S. real property interests. A  
foreign corporation that has ECI reported  
to it from a partnership is not required to  
complete Parts II and III if, pursuant to an  
applicable income tax treaty, none of the  
corporation's business profits including its  
ECI from the partnership are attributable to  
a U.S. permanent establishment, and the  
corporation files a protective tax return  
Part III is used as follows. The  
indirectly, including through the activities  
of one or more partnerships in which the  
corporation owns a partnership interest. In  
addition, if a corporation owns an interest  
in a partnership that is itself deemed  
corporation's outside basis in its directly  
held partnership interests that include ECI  
in the corporation's distributive share is  
apportioned between ECI and non-ECI  
under Regulations section 1.884-1(d)(3) to engaged in a trade or business within the  
determine the average value treated as a  
U.S. asset for interest expense allocation  
purposes under Regulations section  
United States as a result of the  
partnership's own directly or indirectly  
owned interest in another partnership  
(“lower-tier partnership”), the corporation  
is also treated as engaged in a trade or  
business as a result of its direct and  
1.882-5. The apportionment of the outside  
basis to ECI as of the current and prior tax  
year end is also taken into account in  
Jan 12, 2024  
Cat. No. 50608W  
under Regulations section 1.882-4(a)(3)  
(vi). A foreign corporation that transfers an  
interest in a partnership that directly or  
indirectly is engaged in a U.S. trade or  
business is not required to complete Parts  
IV and V if, pursuant to an applicable  
income tax treaty, all of the gain or loss  
from the transfer of the partnership interest  
is attributable to assets, other than real  
property, that do not form part of a U.S.  
permanent establishment, and the  
of the partner's outside basis used to  
determine the proportion of the  
distributive share as ECI with a separate  
trade or business of its own within the  
partnership interest treated as a U.S. asset United States. Do not report on  
is reported on Schedule P (Form 1120-F),  
line 13, and as a U.S. asset on Schedule I  
(Form 1120-F), line 5, column (b).  
Schedule P any indirectly owned  
partnership interests (lower-tier  
partnership interests) that have income  
effectively connected with the lower-tier  
partnership's own trade or business within  
the United States unless the corporation  
also owns a direct interest in the lower-tier  
partnership. The corporation's distributive  
share as ECI earned through lower-tier  
partnership interests is includible on the  
Schedule K-3 (Form 1065) reportable to  
the corporation by the partnership in which  
the corporation owns a direct interest,  
whether or not the directly owned  
Schedule H (Form 1120-F), Part I, Part  
II, and Part IV. The corporation's  
distributive share of non-interest expenses  
included on Schedule P, line 4, is also  
included in the corporation's overall  
allocation and apportionment of expenses  
on Schedule H (Form 1120-F), Part IV,  
lines 38a through 41, if the partnership  
books constitute a set(s) of books that are  
also reportable on Form 1120-F,  
corporation files a protective tax return  
under Regulations section 1.882-4(a)(3)  
(vi). If you have ECI, gain, or loss that is  
exempt pursuant to an applicable income  
tax treaty, you must still complete Part I.  
See also the instructions for Form 8833.  
Schedule L or the partnership interest is  
recorded on the Schedule L books of the  
corporation's own separate trade or  
business within the United States. If the  
partnership interest is not reported on  
Schedule L, the distributive share of  
partnership expenses allocable to the  
corporation's distributive share of ECI is  
included on Schedule H (Form 1120-F) in  
Parts I and II. See the Instructions for  
Schedule H (Form 1120-F).  
partnership is itself directly engaged in a  
trade or business within the United States.  
Protective election on Schedule P.  
See Protective election, later, for  
instructions for making a protective  
partnership outside basis apportionment  
election with a protective return filing of  
Form 1120-F.  
Schedule P (Form 1120-F)  
accommodates reporting for four directly  
owned partnership interests. Complete a  
separate line in Part I, and the  
corresponding columns in Parts II and III,  
for each directly owned partnership  
interest. If the corporation directly owns  
more than four partnership interests which  
are required to be reported on Schedule P  
(Form 1120-F), report the required  
information for those additional  
When and Where To File  
Attach Schedule P (Form 1120-F) to the  
foreign corporation's Form 1120-F income  
tax return. See the Instructions for Form  
1120-F for the time, place, and manner for  
filing the foreign corporation's income tax  
return.  
Schedule M-3 (Form 1120-F), Part II.  
The corporation's distributive share of  
partnership income or loss may be  
reported on Schedule M-3 (Form 1120-F),  
Part II, line 9 (domestic partnerships) and  
line 10 (certain foreign partnerships), in  
accordance with the corporation's  
reporting on its applicable financial  
statements for Schedule M-3 (Form  
1120-F) purposes. See the instructions for  
Schedule M-3 (Form 1120-F), Part II, lines  
9 and 10, for the specific reporting  
requirements.  
partnership interests on attached separate  
sheets using the same size and format as  
shown on the schedule. Also, in the  
Totals” column of Parts II and III, for each  
line item, enter the sum for all directly  
owned partnership interests, including  
those interests reported on attached  
sheets.  
Other Forms and  
Schedules Related to  
Schedule P  
Form 1120-F, Section II. Gross ECI  
includible in the corporation's distributive  
share is reportable on Form 1120-F,  
Section II, lines 3 through 10, in the  
applicable category of income. Expenses  
(other than interest expense) that are  
deductions allocated and apportioned on  
Schedule P (Form 1120-F) to the partner's  
ECI are also reported on Form 1120-F,  
Section II.  
Entities treated as partnerships for tax  
purposes include limited liability  
partnerships (LLPs) and limited liability  
companies (LLCs) that are not classified  
as corporations for federal income tax  
purposes and may be domestic or foreign.  
Do not include any interest in any entity  
treated as a disregarded entity as  
described under Regulations section  
301.7701-2(c)(2).  
Form 8990, Limitation on Business In-  
terest Expense Under Section 163(j).  
Business interest expense includes any  
interest paid or accrued on indebtedness  
properly allocable to a trade or business.  
Business interest expense is generally  
limited to the sum of business interest  
income, 30% of the adjusted taxable  
income, and floor plan financing interest.  
Form 8990 is required, unless an  
Schedule I (Form 1120-F). A portion of  
the interest expense reportable on  
Column (d). With respect to each  
partnership interest, check the “Yes” box if  
the foreign corporation's distributive share  
is ECI, or treated as ECI, in whole or in  
part, with a U.S. trade or business  
determined under section 875.  
Schedule P is includible in the  
corporation's interest expense allocation  
computation under Regulations section  
1.882-5. The corporation's distributive  
share of interest expense that is directly  
allocable to ECI under Regulations section  
1.882-5(a)(1)(ii)(B) is reported on  
exception for filing is met. For more  
information, see section 163(j), Form  
8990, and the Instructions for Form 8990.  
Part I—List of Foreign  
Partner’s Interests in  
Partnerships  
Accordingly, with respect to each  
partnership interest, check the “Yes” box if  
the foreign corporation is engaged in a  
U.S. trade or business indirectly through  
the activities of the partnership. Check the  
“No” box if the foreign corporation has  
applied ECI principles solely at the partner  
level and not as a result of the  
Schedule P, line 7, and on Schedule I  
(Form 1120-F), line 22. A portion of the  
corporation's distributive share of interest  
expense that is reported on Schedule P,  
line 8, is reported on Schedule I (Form  
1120-F), line 9, column (b). The average  
value of partnership liabilities the  
In Part I, list the name, address, and  
employer identification number (EIN) of  
each directly owned partnership interest  
that has ECI included in the partner's  
distributive share on Schedule K-3 (Form  
1065). Also include in the list of  
partnership's activities.  
corporation includes in the determination  
of its outside basis for purposes of  
partnership interests any interest in a  
partnership that is not engaged in a trade  
or business within the United States if the  
corporation treats some or all of its  
determining the proportion of the  
partnership interest treated as a U.S. asset  
is reported on Schedule P (Form 1120-F),  
line 11 (Total column). The average value  
Instructions for Schedule P (Form 1120-F) (2023)  
2
gain or loss from disposition of the  
partnership interest.  
Part II—Foreign Partner’s  
Income and Expenses:  
Reconciliation to  
Part III—Foreign Partner's  
Average Outside Basis  
Under Regulations  
Line 10a. Adjustment for directly  
allocable interest. The outside basis is  
reduced by the average amount of  
Schedule K-3 (Form 1065) Sections 1.882-5(b) and  
Part II reconciles the partner's ECI to its  
liabilities that give rise to directly allocable  
interest expense in accordance with  
Regulations section 1.882-5(a)(1)(ii)(B).  
Enter the portion of the partnership liability  
that is subject to the direct interest  
1.884-1(d)(3)  
Schedule K-3 (Form 1065) distributive  
Report in Part III the corporation's outside  
share from each partnership listed in Part  
basis for each partnership interest  
I. The Schedule K-3 lines are grouped for  
identified in Part I of this Schedule P (Form  
reconciliation of their income and expense  
1120-F) for purposes of determining the  
in the following manner.  
expense allocation rules under Temporary  
Regulations section 1.861-10T(b) or (c)  
and is subject to exclusion from the  
determination of the corporation's average  
U.S. asset values under Regulations  
section 1.882-5. See Temporary  
amount the corporation includes as a U.S.  
Schedule P, lines 1 through 6: Total  
asset in Step 1 of the interest expense  
allocation under Regulations section  
1.882-5. The corporation's outside basis in  
its partnership interests reported on  
Schedule P is determined and adjusted  
under the rules applicable to the  
gross income and gross ECI, and related  
deductions and losses, from Schedule K-3  
(Form 1065), Part X.  
Schedule P, line 7: Interest expense  
directly allocable under Regulations  
section 1.882-5(a)(1)(ii)(B).  
Regulations section 1.861-10T(d). Be sure  
to include amounts from Schedule K-3  
(Form 1065), Part X, Section 3, line 3b.  
determination of the corporation's outside  
basis in the partnership for branch profits  
tax purposes under Regulations section  
1.884-1(d)(3), except that the amounts  
entered on lines 9 through 13 are the  
average values rather than the  
Schedule P, line 8: Interest expense on  
U.S.-booked liabilities as described under  
Regulations section 1.882-5(d)(2)(vii) from  
Schedule K-3 (Form 1065), Part X,  
Section 2, line 7, column (b).  
Line 10b. Enter the average amount  
of the corporation's share of all other  
partnership liabilities it otherwise takes  
into account under section 752 in  
determining its outside basis in its  
partnership interest.  
determination dates used under the  
section 884 regulations for branch profits  
tax purposes. If the corporation is not  
exempt from the branch profits tax under  
an applicable income tax treaty, attach a  
statement showing the determination of  
the corporation's outside basis in  
Line 3. Gross ECI - Partner determina-  
tion. See the Instructions for  
Schedule K-3 (Form 1065), Part X,  
Section 1, column (b) for information the  
foreign corporate partner can use to  
determine the amounts to include on  
Schedule P (Form 1120-F), Part II, line 3.  
Line 11. Enter the corporation's average  
partnership liabilities, or portion thereof,  
for the year for which the corporation  
receives a distributive share of interest  
expense for the year. See Regulations  
section 1.884-1(d)(3)(vi). The amount on  
line 11 should generally be the same  
amount reported on Schedule K-3 (Form  
1065), Part X, Section 3, line 3a. Also,  
enter this line 11 amount on Schedule I  
(Form 1120-F), line 8, column (b), to the  
extent applicable in determining the  
corporation's interest expense deduction  
under Regulations section 1.882-5.  
accordance with the requirements of lines  
9 through 13 for an averaging period that  
shows the apportioned outside basis for  
the beginning and ending determination  
dates of the corporation's tax year. See  
also section 163(j) for rules on how the  
trade or business interest limitation may  
affect outside basis.  
Line 6. Total deductions and losses de-  
ductible against gross ECI - Partner  
determination. See the Instructions for  
Schedule K-3 (Form 1065), Part X,  
Section 2, column (b) for information the  
foreign corporate partner can use to  
determine the amounts to include on  
Schedule P (Form 1120-F), Part II, line 6.  
Line 9. Section 705 outside basis.  
Enter on line 9 the corporation's average  
value of the outside basis (otherwise  
determined under section 705) of the  
partnership in the column which  
Line 7. Interest expense directly  
allocable under Regulations section  
1.882-5(a)(1)(ii)(B). On line 7, enter the  
amount of interest expense that is directly  
allocable to ECI under Regulations section  
1.882-5(a)(1)(ii)(B) and the applicable  
requirements of Temporary Regulations  
section 1.861-10T(b) or (c). The amount  
entered on line 7 is also included on  
Schedule I (Form 1120-F), line 22.  
Line 12. Partner's adjusted average  
outside basis in partnership. Add lines  
10d and 11 and enter the amount on  
line 12. The amount reported on line 12 is  
the corporation's adjusted outside basis  
that is eligible for apportionment between  
ECI and non-ECI.  
corresponds to the line in Part I on which  
the partnership interest is listed. The  
average value is determined using the  
most frequent averaging period for which  
data is reasonably available. See  
Regulations sections 1.882-5(b)(3) and  
1.882-5(c)(2)(iv).  
Line 13. Partner's outside basis alloca-  
ble to ECI. Enter on line 13 the  
Line 8. Interest expense on  
corporation's average outside basis  
reported on line 12 that is treated as a U.S.  
asset under Regulations sections  
U.S.-booked liabilities as described  
under Regulations section 1.882-5(d)  
(2)(vii). On line 8, enter the amount of  
interest expense that arises from U.S.-  
booked liabilities as described in  
Lines 10a and 10b. Partner liabilities  
included in the corporation's outside  
basis. The corporation's outside basis  
reported on line 9 is adjusted on lines 10a  
and 10b to conform the amount of  
1.884-1(d)(3) and 1.882-5. Also enter this  
line 13 amount on Schedule I (Form  
1120-F), line 5, column (b). See  
Regulations section 1.882-5(d)(2). The  
amount on line 8 should generally be the  
same amount reported on Schedule K-3  
(Form 1065), Part X, Section 2, line 7,  
column (b). The amount entered on line 8  
is also reported on Schedule I (Form  
1120-F), line 9, column (b). A portion of  
the line 8 amount is also taken into  
account on Form 1120-F, Section III, Part  
II, line 8, in determining the corporation's  
branch interest under Regulations section  
1.884-4(b).  
Regulations section 1.884-1(d)(3)(i) for the  
elective requirements for apportioning  
outside basis on the income or asset  
method. For purposes of determining the  
proportion of the partnership interest that  
is a U.S. asset, a foreign corporation may  
elect separately for each partnership  
interest to use either the asset method or  
the income method described in  
liabilities the corporation includes in the  
determination of its outside basis to the  
proportionate amount of the corporation's  
distributive share of interest expense with  
respect to the partnership's liabilities. This  
adjustment is made only for purposes of  
determining the corporation's outside  
basis included in the interest expense  
allocation and branch profits tax  
Regulations sections 1.884-1(d)(3)(ii) and  
(iii). See the instructions for line 14 below.  
If the corporation does not timely elect  
either method in the first year the  
computations. The adjustment is not made  
for other federal income tax purposes  
such as for determining the corporation's  
Instructions for Schedule P (Form 1120-F) (2023)  
3
corporation has a distributive share of ECI  
from the partnership, the Director of Field  
Operations may make the election on  
behalf of the corporation. See Regulations  
section 1.884-1(d)(3)(v).  
Section 3, lines 2a and 2b to calculate the  
asset ratio that is applied to the  
Schedule P, line 13 amount.  
property interests is considered received  
from the sale or exchange of U.S. real  
property interests. As a result, that portion  
of the gain or loss must be included in  
determining the foreign corporation’s U.S.  
trade or business income.  
Protective election. If the  
corporation files a protective tax return  
under Regulations section 1.882-4(a)(3)  
(vi), and the partnership is not engaged in  
a trade or business within the United  
States or does not have business profits  
attributable to a U.S. permanent  
Note. The required timely filed election  
under Regulations section 1.884-1(d)(3)  
(iv) for apportioning outside basis between  
ECI and non-ECI also applies to lower-tier  
partnership interests that are not required  
to be identified and reconciled to  
Complete Parts IV and V only if the  
foreign corporation transferred a  
partnership interest subject to section  
864(c)(8) or 897(g). For more information,  
see Partner's Instructions for  
establishment, the corporation need not  
file Schedule P and report its distributive  
share of income and expenses with its  
Schedule K-3 (Form 1065), Part XIII,  
Foreign Partner's Distributive Share of  
Schedule K-3 (Form 1065) on Schedule P  
(Form 1120-F).  
Form 1120-F for purposes of outside basis Deemed Sale Items on Transfer of  
Line 14. Outside basis election meth-  
od. Check either the "income" box or the  
"asset" box on line 14 to indicate the  
elective outside basis apportionment  
method used to determine the amount of  
the corporation's outside basis in its  
partnership interests apportioned to ECI  
and reported on line 13. The allocation  
method is subject to a 5-year minimum  
period election that must be made in the  
first year the partner has a distributive  
share of ECI included in the income  
reported on Schedule K-3 (Form 1065).  
The elective method chosen must be used  
for both branch profits tax and interest  
expense allocation purposes during the  
same 5-year minimum period. See  
apportionment. However, if it is later  
determined that the corporation's  
Partnership Interest; Pub. 515,  
Withholding of Tax on Nonresident Aliens  
and Foreign Entities; and Pub. 541,  
Partnerships.  
distributive share of partnership income is  
ECI with respect to a trade or business of  
the corporation, the corporation will have  
failed to make a timely income method or  
asset method election with respect to such  
partnership for outside basis  
Do not report on Part IV the  
transfer of any partnership interest  
!
CAUTION  
listed in Part I for which the “No”  
box was checked in column (d). The  
transfer of that partnership interest may,  
however, be subject to tax under another  
provision of the Internal Revenue Code.  
apportionment purposes if no other  
election disclosure is made. To preserve  
the right to allocate and apportion its  
outside basis under a chosen method, the  
corporation may make a protective  
election by completing Part I, and Part III,  
line 14, of Schedule P, and including it with  
the protective return filing of Form 1120-F.  
The protective election is effective only for  
the year in which the protective election is  
also the first year in which the  
Complete a separate set of entries in Parts  
IV and V for each such transfer. When  
completing Parts IV and V, the foreign  
corporation should use the information  
from Part XIII of the Schedule K-3 (Form  
1065) that was issued by the partnership.  
If the corporation did not receive a  
Regulations section 1.884-1(d)(3)(iv).  
Asset method. In general, a partner's  
interest in a partnership shall be treated as  
a U.S. asset in the same proportion that  
the sum of the partner's proportionate  
share of the adjusted bases of all  
corporation's distributive share is in fact  
ECI with a trade or business of the  
corporation within the United States. The  
corporation need not complete Part II, or  
Part III, lines 9 through 13, with the  
protective election.  
Schedule K-3 (Form 1065), Part XIII from  
the partnership, the corporation will need  
to contact the partnership to receive the  
relevant information to complete lines 4,  
6 ,7, and 10 of Part V.  
partnership assets as of the determination  
date bears to the sum of the partner's  
proportionate share of the adjusted bases  
of all partnership assets as of the  
If the corporation is taking a treaty-based  
return position with respect to any amount  
reported on Part V, it must attach Form  
8833 to Form 1120-F and provide a  
detailed explanation.  
Parts IV and V  
Section 864(c)(8) provides that if a foreign  
transferor owns, directly or indirectly, an  
interest in a partnership that is engaged in  
the conduct of a trade or business within  
the United States, gain or loss recognized  
by the foreign transferor on the transfer of  
all (or any portion) of the interest is treated  
as effectively connected gain or effectively  
connected loss, limited to the partner’s  
allocable share of gain or loss on a  
determination date. The proportion of U.S.  
assets to total assets of the partnership is  
determined as if the partnership were a  
foreign corporation engaged in a trade or  
business within the United States.  
Part IV—Foreign Partner’s  
Interests in Partnerships  
Transferred During Tax  
Year  
Use a separate line for each partnership  
interest transferred during the year. If  
multiple interests in the same partnership  
were transferred during the year, report  
each on a separate line. For each entry in  
Part IV, complete an entry in Part V. Report  
the following information in each column of  
Part IV.  
Column (a). Before completing column  
(a), complete a separate line on Part I for  
each partnership whose interest was not  
otherwise required to be reported under  
those instructions if (1) the transfer of the  
interest resulted in gain or loss under  
section 864(c)(8) or Regulations section  
1.864(c)(8)-1, or (2) the transfer of the  
interest resulted in gain or loss solely  
under section 897(g). Enter the letter  
Generally, a partner's proportionate share  
of a partnership asset is the same as its  
proportionate share of all items of income,  
gain, loss, and deduction that may be  
generated by the asset. Use amounts from  
Schedule K-3 (Form 1065), Part X,  
Section 3, lines 2a and 2b to calculate the  
asset ratio that is applied to the  
deemed sale gain or loss of the  
partnership’s U.S. trade or business  
assets. A transfer means a sale,  
exchange, or other disposition, and  
includes a distribution from a partnership  
to a partner to the extent that gain or loss  
is recognized on the distribution, as well  
as a transfer treated as a sale or exchange  
under section 707(a)(2)(B). This  
Schedule P, line 13 amount. See  
Regulations section 1.884-1(d)(3)(ii)(B) for  
non-uniform treatment of certain  
partnership items.  
Income method. Under the income  
method, a partner's interest in a  
requirement applies to transfers that  
occurred on or after November 27, 2017.  
partnership shall be treated as a U.S.  
asset in the same proportion that its  
distributive share of partnership ECI for  
the partnership's tax year that ends with or  
within the partner's tax year bears to its  
distributive share of all partnership income  
for that tax year. Use amounts from  
Schedule K-3 (Form 1065), Part X,  
Similarly, section 897(g) requires that if  
a foreign corporation disposes of an  
interest in a partnership that directly or  
indirectly holds U.S. real property  
interests, the amount received that is  
attributable to the partnership’s U.S. real  
Instructions for Schedule P (Form 1120-F) (2023)  
4
corresponding to the name of the  
partnership from Part I whose interest was  
transferred.  
sum of the amount of cash distributed (or  
to be distributed), the fair market value of  
property distributed (or to be distributed),  
and the reduction in the transferor’s share  
of partnership liabilities.  
Enter the information from Part IV, columns  
(c) and (d), on Form 4797, line 10,  
columns (b) and (c), respectively. Enter  
the amount from Part V, line 8, on Form  
4797, line 10, column (g).  
Columns (b)(1) and (b)(2). Enter either  
the percentage interest in the partnership  
or the number of units in the partnership  
that the partner transferred in (b)(1) or (b)  
(2), respectively. If the foreign corporation  
is treated as transferring an interest in the  
partnership because it received a  
Line 2. Enter the corporation’s outside  
adjusted basis, as defined under section  
705(a), in its partnership interest as of the  
date of the transfer. See section 705 for  
the determination of the adjusted basis of  
Line 9. Enter the smaller of line 5 or  
line 7. When determining which amount is  
smaller, treat both amounts as positive  
numbers. However, enter zero on line 9 if  
either of the following is true.  
distribution but its ownership interest in the a partnership interest. If the corporation  
Line 5 is zero or less and line 7 is  
partnership remains unchanged, enter  
zero in the relevant column for how the  
interests are denominated.  
did not transfer its entire interest in the  
partnership, enter the corporation’s  
adjusted basis in the portion of the  
partnership interest that was transferred.  
greater than zero.  
Line 5 is greater than zero and line 7 is  
zero or less.  
Report this portion of the transfer on  
The information you report in  
Form 8949, Part I, if short term capital gain  
or loss and Part II, if long term capital gain  
or loss, checking box (C) on Part I or box  
(F) on Part II, as applicable. Enter:  
column (b)(1) or (b)(2) for  
Line 3. Subtract line 2 from line 1.  
TIP  
ownership transferred should be  
Line 4. Enter the amount from  
Schedule K-3 (Form 1065), Part XIII,  
line 1.  
the same as that reported to you for that  
transfer on Schedule K-3 (Form 1065),  
Part XIII, Item B1 or B2.  
“From Schedule P (Form 1120-F)” on  
Form 8949, column (a);  
If you are required to complete this  
The information from Part IV, columns  
Column (c). Enter the date(s) the  
partnership interest was acquired. If the  
partnership interest you transferred was  
obtained through multiple acquisitions,  
you must report the transfer of each  
acquired interest with its respective  
acquisition date in column (c) on a  
separate line. Thus, each reported transfer  
may result in recognized short-term gain  
(or loss) and long-term gain (or loss), as  
appropriate.  
schedule but didn't receive a  
!
(c) and (d), on Form 8949, columns (b)  
and (c), respectively;  
CAUTION  
Schedule K-3 (Form 1065), you'll  
need to contact the partnership to obtain a  
copy.  
The amounts from Part V, lines 1 and 2,  
on Form 8949, columns (d) and (e),  
respectively;  
Line 5. Subtract line 4 from line 3. If  
line 4 is less than zero (that is, a loss),  
treat the number entered on line 4 as  
positive and add that number to the  
amount reported on line 3. Enter the result  
on line 5.  
The amount from Part V, line 9, on Form  
8949, column (h);  
On Form 8949, column (g), as an  
adjustment the difference between outside  
gain or loss (column (d) minus column (e))  
and recognized capital gain or loss  
(column (h)), if applicable; and  
Line 6. Enter the amount from  
Schedule K-3 (Form 1065), Part XIII,  
line 2.  
Column (d). Enter the date the  
partnership interest was transferred. Also,  
complete the information required in Part V  
of Schedule P.  
Code "P" on Form 8949, column (f), if  
you entered an amount on Form 8949,  
column (g).  
Line 7. Enter the amount from  
Schedule K-3 (Form 1065), Part XIII,  
line 3.  
If this is an installment sale, use Form  
Part V—Foreign Partner’s  
Gain or Loss on Transfer  
of Partnership Interests  
Line 1. Enter the amount realized from  
the transfer of the partnership interest. The  
amount realized includes the amount of  
cash paid (or to be paid), the fair market  
value of other property transferred (or to  
be transferred), the amount of any  
6252.  
Line 8. Enter the smaller of line 4 or  
line 6. When figuring which amount is  
smaller, treat both amounts as positive  
numbers. However, enter zero on line 8 if  
either of the following is true.  
Line 10. Enter the amount from  
Schedule K-3 (Form 1065), Part XIII,  
line 7. Complete this line if the partnership  
is deemed to have sold only U.S. real  
property interest(s) as defined under  
section 897(c)(1). Under these  
Line 4 is zero or less and line 6 is  
greater than zero.  
Line 4 is greater than zero and line 6 is  
circumstances there should be no entries  
on lines 1 through 3 of Schedule K-3  
(Form 1065), Part XIII. Enter this amount  
on Form 8949, Form 4797, and  
zero or less.  
liabilities assumed by the transferee or to  
which the partnership interest is subject,  
and the reduction in the transferor’s share  
of partnership liabilities. In the case of a  
distribution, the amount realized is the  
Report this portion of the transfer on  
Schedule D as appropriate.  
Form 4797, Part II, line 10. Enter the  
information from Part I, columns (a) and  
(c), on Form 4797, line 10, column (a).  
Instructions for Schedule P (Form 1120-F) (2023)  
5