フォーム 8865 指示
フォーム8865の指示、特定の外国のパートナーシップを尊重する米国人帰国
2018年11月12日
関連フォーム
- フォーム 8865 - 特定の外国のパートナーシップを尊重する米国人員の帰国
Department of the Treasury
Internal Revenue Service
2023
Instructions for Form 8865
Return of U.S. Persons With Respect to Certain Foreign Partnerships
Section references are to the Internal Revenue Code
What’s New
unless otherwise noted.
See What’s New in the Instructions for Form 1065 for
changes and new Internal Revenue Code sections that
may affect foreign partnerships with fiscal years, corporate
partners, or certain impacted activities.
Contents
Page
Schedule A. Constructive Ownership of
Reminders
Schedules K-2 (Form 8865) and K-3 (Form 8865) for
partnerships. For tax years beginning after 2020, most
items of international tax relevance are reported on
Schedules K-2 and K-3, replacing prior reporting on Form
8865, Schedules K and K-1, line 16, Foreign transactions,
and certain reporting on Form 8865, Schedules K and
K-1, line 20, Other information.
Schedule A-1. Certain Partners of Foreign
Schedule A-2. Foreign Partners of Section 721(c)
Schedule B. Income Statement—Trade or
The schedules are designed to provide greater clarity
for partners on how to compute their U.S. income tax
liability regarding items of international tax relevance,
including claiming deductions and credits. Go to IRS.gov
for the schedules and the Instructions for Schedules K-2
and K-3 (Form 8865) for more information. Form 8865,
Schedules K and K-1, retain line 16 for the partnership to
check a box indicating that it has items of international tax
relevance and that it completed Schedules K-2 and K-3.
For purposes of basis adjustments and to reconcile
income, Form 8865 retains total foreign taxes paid or
accrued but moves this reporting to Schedule K, line 21.
See the Instructions for Form 1065 for amounts to report
on line 21.
Schedule G (Form 8865). Statement of Application
of the Gain Deferral Method Under Section
Schedule H (Form 8865). Acceleration Events and
Exceptions Reporting Relating to Gain Deferral
Schedules K, Partners' Distributive Share Items,
and K-1 (Form 8865), Partner’s Share of
Schedules K-2 (Form 8865), Partners’ Distributive
Share Items—International, and K-3 (Form
8865), Partner’s Share of Income, Deductions,
Important: Foreign taxes paid or accrued must be
reported on Schedules K-2 and K-3 for purposes of
reporting information necessary for an eligible partner to
claim a foreign tax credit.
Schedule M-1. Reconciliation of Income (Loss) per
Schedule M-2. Analysis of Partners' Capital
General Instructions
Only the general instructions for Schedules B, K, K-1,
M-1, and M-2 are included later in these instructions. If
you are required to complete these schedules for Form
8865, use the specific instructions for the corresponding
schedules of Form 1065, U.S. Return of Partnership
Income.
Schedule N. Transactions Between Controlled
Foreign Partnership and Partners or Other
Schedule O (Form 8865). Transfer of Property to a
Schedule P (Form 8865). Acquisitions,
Dispositions, and Changes of Interests in a
IF you are completing Form
8865...
THEN use the instructions for
Form 1065...
Schedule B
page 1 (income and deductions).
Schedules K and K-1.
Schedule K-3.
Schedules K and K-1
Schedule K-3
Schedule L
Future Developments
For the latest information about developments related to
Form 8865, its schedules, and its instructions, such as
legislation enacted after they were published, go to
Schedule L.
Schedule M-1
Schedule M-2
Schedule M-1.
Schedule M-2.
Nov 27, 2023
Cat. No. 26053N
Note. If you are reporting capital gains and losses, use
Schedule D (Form 1065). See the Instructions for
Schedule D (Form 1065).
Purpose of Form
Use Form 8865 to report the information required under
section 6038 (reporting with respect to controlled foreign
partnerships), section 6038B (reporting of transfers to
foreign partnerships), or section 6046A (reporting of
acquisitions, dispositions, and changes in foreign
partnership interests).
Who Must File
A U.S. person qualifying under one or more of the
Categories of Filers (see below) must complete and file
Form 8865. These instructions and the Filing
Requirements for Categories of Filers chart, later, explain
the information, statements, and schedules required for
each category of filer. If you qualify under more than one
category for a particular foreign partnership, you must
submit all the items required for each category under
which you qualify.
Example. If you qualify as a Category 2 and a
Category 3 filer, you must submit all the schedules
required of Category 2 filers (page 1 of Form 8865, and
Schedules A, A-2, N, K-1, and K-3) plus any additional
schedules that Category 3 filers are required to submit
(Schedules A-1 and O).
Complete a separate Form 8865 and the applicable
schedules for each foreign partnership.
File the 2023 Form 8865 with your income tax return for
your tax year beginning in 2023.
If a Form 8832, Entity Classification Election, was filed
for this entity for the current tax year, see When To File
and Where To File in the instructions for Form 8832 to
determine if you are required to attach a copy of the Form
8832 to the tax return to which the Form 8865 is being
attached.
If a domestic section 721(c) partnership is formed on or
after January 18, 2017, and the gain deferral method is
applied, then a U.S. transferor must file Form 8865 for that
partnership. See Regulations section 1.721(c)-6(b)(4).
A U.S. transferor that is required to provide information
for a partnership under Regulations sections 1.721(c)-6(b)
(2)(iv) and 1.721(c)-6(b)(3)(xi) must file a separate Form
8865 (along with all necessary schedules and
attachments) for each partnership treated as a U.S.
transferor under Regulations sections 1.721(c)-3(d) and
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Instructions for Form 8865 (2023)
tax year, no person will be considered a Category 2 filer.
Categories of Filers
Category 1 filer. A Category 1 filer is a U.S. person who
controlled the foreign partnership at any time during the
partnership's tax year. Control of a partnership is
ownership of more than a 50% interest in the partnership.
See the definition of 50% interest, later. There may be
more than one Category 1 filer for a partnership for a
Foreign partnership, later.
A Category 1 filer also includes a U.S. transferor who
must report certain information for a section 721(c)
partnership for the tax year of contribution and
subsequent years, pursuant to Regulations section
1.721(c)-6. A Category 1 filer fulfills this reporting
requirement by filing Schedule G and, in certain
circumstances, Schedule H. See Section 721(c)
Category 3 filer. A Category 3 filer is a U.S. person who
contributed property during that person's tax year to a
foreign partnership in exchange for an interest in the
partnership (a section 721 transfer), if that person either:
1. Owned directly or constructively at least a 10%
interest in the foreign partnership immediately after the
contribution, or
2. The value of the property contributed (when added
to the value of any other property contributed to the
partnership by such person, or any related person, during
the 12-month period ending on the date of transfer)
exceeds $100,000.
If a domestic partnership contributes property to a
foreign partnership, the domestic partnership's partners
are considered to have transferred a proportionate share
of the contributed property to the foreign partnership.
However, if the domestic partnership files Form 8865 and
properly reports all the required information for the
contribution, its partners will not be required to report the
transfer.
Category 2 filer. A Category 2 filer is a U.S. person who
at any time during the tax year of the foreign partnership
owned a 10% or greater interest in the partnership while
the partnership was controlled by U.S. persons each
owning at least a 10% interest. However, if the foreign
partnership had a Category 1 filer at any time during that
A Category 3 filer includes a U.S. transferor who (a)
contributes section 721(c) property to a section 721(c)
Filing Requirements for Categories of Filers
Category of Filers
Filing Requirements
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2
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Identifying information—page 1 of Form 8865
Schedule A—Constructive Ownership of Partnership Interest
Schedule A-1—Certain Partners of Foreign Partnership
Schedule A-3—Affiliation Schedule
Schedule B—Income Statement—Trade or Business Income
Schedule G (Form 8865)—Statement of Application of the Gain Deferral Method Under Section
721
Schedule H (Form 8865)—Acceleration Events and Exceptions Reporting Relating to Gain
Deferral Method Under Section 721(c)
Schedule K—Partners' Distributive Share Items
Schedule K-1 (Form 8865)—Partner's Share of Income, Deductions, Credits, etc. (direct partners
only)
Schedule K-2 (Form 8865)—Partners’ Distributive Share Items—International
Schedule K-3 (Form 8865)—Partner’s Share of Income, Deductions, Credits, etc.—International
Schedule L—Balance Sheets per Books
Schedule M-1—Reconciliation of Income (Loss) per Books With Income (Loss) per Return
Schedule M-2—Analysis of Partners' Capital Accounts
Schedule N—Transactions Between Controlled Foreign Partnership and Partners or Other
Related Entities
Schedule D—Schedule D (Form 1065), Capital Gains and Losses
Schedule O (Form 8865)—Transfer of Property to a Foreign Partnership
Schedule P (Form 8865)—Acquisitions, Dispositions, and Changes of Interests in a Foreign
Partnership
Instructions for Form 8865 (2023)
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partnership, and (b) has reporting requirements pursuant
to Regulations section 1.721(c)-6(b)(2). The Category 3
filer fulfills this reporting requirement by filing Schedule G,
in addition to Schedule O, and, in certain circumstances,
Category 3 also includes a U.S. person that previously
transferred appreciated property to the partnership and
was required to report that transfer under section 6038B, if
the foreign partnership disposed of such property while
the U.S. person remained a direct or indirect partner in the
partnership.
Category 4 filer. A Category 4 filer is a U.S. person that
had a reportable event under section 6046A during that
person's tax year. There are three categories of reportable
events under section 6046A: acquisitions, dispositions,
and changes in proportional interests.
Acquisitions. A U.S. person that acquires a foreign
partnership interest has a reportable event if:
has increased or decreased by at least the equivalent of a
10% interest in the partnership.
Special rule for a partnership interest owned on
December 31, 1999. If the U.S. person owned at least a
10% direct interest in the foreign partnership on
December 31,1999, then comparisons should be made to
the person's direct interest on December 31,1999. Once
the person has a reportable event after December
31,1999, future comparisons should be made by
reference to the last reportable event.
Exceptions to Filing
Multiple Category 1 filers. If during the tax year of the
partnership more than one U.S. person qualifies as a
Category 1 filer, only one of these Category 1 partners is
required to file Form 8865. A U.S. person with a controlling
interest in the losses or deductions of the partnership isn’t
permitted to be the filer of Form 8865 if another U.S.
person has a controlling interest in capital or profits; only
the latter may file the return. The U.S. person that files the
Form 8865 must complete item F on page 1.
The single Form 8865 to be filed must contain all of the
information that would be required if each Category 1 filer
filed a separate Form 8865. Specifically, separate
Schedules N, K-1, and K-3 (if applicable) must be
attached to the Form 8865 for each Category 1 filer. Also,
items B, C, and D on page 1 and Schedule A on page 2 of
Form 8865 must be completed for each Category 1 filer
not filing the form. Attach a separate statement listing this
information to the single Form 8865.
The person didn’t own a 10% or greater direct interest
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in the partnership and, as a result of the acquisition, the
person owns a 10% or greater direct interest in the
partnership (for example, from 9% to 10%). For purposes
of this rule, an acquisition includes an increase in a
person's direct proportional interest (see Changes in
proportional interests, later); or
Compared to the person's direct interest when the
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person last had a reportable event, after the acquisition
the person's direct interest has increased by at least a
10% interest (for example, from 11% to 21%).
An acquisition of a section 721(c) partnership interest may
be an acceleration event exception under the gain deferral
method. See Regulations section 1.721(c)-5. In this case,
the acquirer may become a successor U.S. transferor and
may have a reporting requirement under Regulations
section 1.721(c)-6. See the specific instructions for
Schedule H, later.
A Category 1 filer not filing Form 8865 must attach a
statement entitled “Controlled Foreign Partnership
Reporting” to that person's income tax return.
The statement must include the following information.
A statement that the person qualified as a Category 1
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filer, but is not submitting Form 8865 under the multiple
Category 1 filers exception.
Dispositions. A U.S. person that disposes of a foreign
partnership interest has a reportable event if:
The name, address, and identifying number (if any) of
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The person owned a 10% or greater direct interest in
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the foreign partnership of which the person qualified as a
Category 1 filer.
the partnership before the disposition and, as a result of
the disposition, the person owns less than a 10% direct
interest (for example, from 10% to 8%). For purposes of
this rule, a disposition includes a decrease in a person's
direct proportional interest; or
A statement that the filing requirement has been or will
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be satisfied.
The name and address of the person filing Form 8865
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for this partnership.
Compared to the person's direct interest when the
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The Internal Revenue Service Center where the Form
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person last had a reportable event, after the disposition
the person's direct interest has decreased by at least a
10% interest (for example, from 21% to 11%).
8865 must be filed (or indicate “electronic filing” if the
Form 8865 has been or will be filed electronically).
A U.S. person who qualifies for this exception to
A disposition of a section 721(c) partnership interest
may be an acceleration event for purposes of applying the
gain deferral method. The U.S. transferor may be required
to recognize gain in an amount equal to the remaining
built-in gain on the section 721(c) property previously
contributed to the section 721(c) partnership. See
Regulations section 1.721(c)-4. For acceleration events
exceptions, see Regulations section 1.721(c)-5. See the
Changes in proportional interests. A U.S. person
has a reportable event if compared to the person's direct
proportional interest the last time the person had a
reportable event, the person's direct proportional interest
the Category 1 filing requirement would still have
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CAUTION
to file a separate Form 8865 if that person is also
subject to the filing requirements of Category 3 or 4. This
separate Form 8865 would include all the information
required for a Category 3 filer, a Category 4 filer, or a U.S.
transferor who must report certain information for a
section 721(c) partnership for the year of contribution and
subsequent years, pursuant to Regulations section
1.721(c)-6, in addition to the “Controlled Foreign
Partnership Reporting” statement.
later. A Category 1 or 2 filer that doesn’t own a direct
interest in the partnership and that is required to file this
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Instructions for Form 8865 (2023)
form solely because of constructive ownership from a U.S.
person(s) isn’t required to file Form 8865 if:
1. Form 8865 is filed by the U.S. person(s) through
which the indirect partner constructively owns an interest
in the foreign partnership,
2. The U.S. person through which the indirect partner
constructively owns an interest in the foreign partnership
is also a constructive owner and meets all the
requirements of this constructive ownership filing
exception, or
3. Form 8865 is filed for the foreign partnership by
another Category 1 filer under the multiple Category 1
filers exception.
Example. Partner A doesn’t own an interest in FPS, a
foreign partnership. Partner A transfers property to FPS in
exchange for a 15% direct interest. Partner A qualifies as
a Category 3 filer because he transferred property to a
foreign partnership and owned at least a 10% interest in
FPS immediately after the contribution. Partner A is also a
Category 4 filer because he didn’t own a 10% or greater
direct interest in FPS and as a result of the acquisition now
owns a 10% or greater direct interest in FPS. If Partner A
properly reports the contribution on Form 8865 as a
Category 3 filer, Partner A isn’t required to report his
acquisition of the 15% interest in FPS as a Category 4
filer.
Relief for Category 1 and 2 Filers When the
Foreign Partnership Files Form 1065
If a foreign partnership files Form 1065 for its tax year,
Category 1 and 2 filers may use a copy of the completed
Form 1065 schedules in place of the equivalent schedules
of Form 8865.
If you file Form 8865 with an electronically filed income
tax return, see the electronic filing publications identified
in the instructions for your income tax return for more
information.
earlier, for the Form 1065 schedules that are equivalent to
the Form 8865 schedules.
To qualify for the constructive ownership filing
exception, the indirect partner must file with its income tax
return a statement entitled “Controlled Foreign Partnership
Reporting.”
This statement must contain the following information.
1. A statement that the indirect partner was required to
file Form 8865, but isn’t doing so under the constructive
owners exception.
2. The names and addresses of the U.S. persons
whose interests the indirect partner constructively owns.
3. The name and address of the foreign partnership for
which the indirect partner would have had to have filed
Form 8865 but for this exception.
Example. Partner A is a Category 1 filer with respect
to FPS, a foreign partnership, during the 2023 tax year.
FPS completes and files a Form 1065 for its 2023 tax year.
Instead of completing Schedules B, K, K-2, L, M-1, M-2,
K-1 and K-3 of Form 8865, Partner A may attach to its
Form 8865 page 1 of Form 1065 and Form 1065
Schedules K, K-2, L, M-1, M-2, K-1 and K-3 (including the
Schedules K-1 and K-3 for Partner A and all other U.S.
persons owning 10% or greater direct interests in FPS).
Partner A must complete the following items and
schedules on Form 8865.
4. If the indirect partner is a domestic corporation, a
statement setting forth all the information that the indirect
partner would have had to provide in response to
questions G8a and G8b on Form 8865. See Item H10.
Separate Units Note, later, for more information.
Members of an affiliated group of corporations filing
a consolidated return. If one or more members of an
affiliated group of corporations filing a consolidated return
qualify as Category 1 or 2 filers for a particular foreign
partnership, the common parent corporation may file one
Form 8865 on behalf of all of the members of the group
required to report. Except for group members who also
qualify under the constructive owners exception, the Form
8865 must contain all the information that would have
been required to be submitted if each group member filed
its own Form 8865.
Exception for certain trusts. Trusts relating to state and
local government employee retirement plans that
otherwise would have Forms 8865 reporting requirements
with regard to foreign partnerships aren’t required to file
Form 8865.
Exception for certain Category 4 filers. If you qualify
as a Category 3 and 4 filer because you contributed
property to a foreign partnership in exchange for a 10% or
greater interest in that partnership, you aren’t required to
report this transaction under both Category 3 and 4 filing
requirements. If you properly report the contribution of
property under the Category 3 rules, you aren’t required to
report it as a Category 4 filer. However, the acquisition will
count as a reportable event to determine if a later change
in your partnership interest qualifies as a reportable event
under Category 4.
The first and second pages.
Schedule A.
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Schedule A-1.
Schedule A-2.
Schedule A-3.
Schedule G (Form 8865).
Schedule H (Form 8865).
Schedule M.
Schedule N.
Example. Partner A is a Category 2 filer with respect
to FPS, a foreign partnership. If FPS completes and files a
Form 1065 for its 2023 tax year, Partner A may file with
Form 8865 the Schedules K-1 and K-3 (Form 1065) that it
receives from the partnership instead of Schedules K-1
and K-3 (Form 8865). Partner A must complete the
following items and schedules on Form 8865.
The first and second pages.
Schedule A.
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Schedule A-2.
Schedule N.
When and Where To File
Attach Form 8865 to your income tax return (or, if
applicable, partnership or exempt organization return) and
Instructions for Form 8865 (2023)
5
file both by the due date (including extensions) for that
return. If you don’t have to file an income tax return, you
must file Form 8865 separately with the IRS at the time
and place you would be required to file an income tax
return (or, if applicable, a partnership or exempt
organization return). See below for penalties that may
apply if you don’t file Form 8865 on time.
Gain deferral method. The gain deferral method is the
method described in Regulations section 1.721(c)-3(b)
applied to avoid the immediate recognition of gain upon a
contribution of section 721(c) property to a section 721(c)
partnership under Regulations section 1.721(c)-2(b).
50% interest. A 50% interest in a partnership is an
interest equal to:
50% of the capital,
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Definitions
50% of the profits, or
Partnership. A partnership is the relationship between
two or more persons who join to carry on a trade or
business, with each person contributing money, property,
labor, or skill and each expecting to share in the profits
and losses of the business whether or not a formal
partnership agreement is made.
50% of the deductions or losses.
For purposes of determining a 50% interest, the
constructive ownership rules described below apply.
10% interest. A 10% interest in a partnership is an
interest equal to:
10% of the capital,
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The term “partnership” includes a limited partnership,
10% of the profits, or
syndicate, group, pool, joint venture, or other
10% of the deductions or losses.
unincorporated organization, through or by which any
business, financial operation, or venture is carried on, that
isn’t, within the meaning of the regulations under section
7701, a corporation, trust, estate, or sole proprietorship.
For purposes of determining a 10% interest, the
constructive ownership rules described below apply.
Constructive ownership. For purposes of determining
an interest in a partnership, the constructive ownership
rules of section 267(c) (excluding section 267(c)(3)) apply,
taking into account that such rules refer to corporations
and not to partnerships. Generally, an interest owned
directly or indirectly by or for a corporation, partnership,
estate, or trust shall be considered as being owned
proportionately by its owners, partners, or beneficiaries.
Also, an individual is considered to own an interest
owned directly or indirectly by or for their family. The family
of an individual includes only that individual's spouse,
siblings, ancestors, and lineal descendants. An interest
will be attributed from a nonresident alien individual under
the family attribution rules only if the person to whom the
interest is attributed owns a direct or indirect interest in the
foreign partnership under section 267(c)(1) or (5).
A joint undertaking merely to share expenses isn’t a
partnership. Mere co-ownership of property that is
maintained and leased or rented isn’t a partnership.
However, if the co-owners provide services to the tenants,
a partnership exists.
Foreign partnership. A foreign partnership is a
partnership that isn’t created or organized in the United
States or under the law of the United States or of any state
or the District of Columbia. If a domestic section 721(c)
partnership is formed on or after January 18, 2017, and
the gain deferral method is applied, then the section
721(c) partnership is treated as a foreign partnership for
purposes of Form 8865 and these instructions. See
Regulations section 1.721(c)-6(b)(4).
Section 721(c) partnership. A partnership (domestic or
foreign) is a section 721(c) partnership if there is a
contribution of section 721(c) property to the partnership
and, after the contribution (and all transactions related to
the contribution), (a) a related foreign person with respect
to the U.S. transferor is a direct or indirect partner in the
partnership; and (b) the U.S. transferor and related
persons own 80% or more of the interests in partnership
capital, profits, deductions, or losses. See Regulations
section 1.721(c)-1(b)(14).
U.S. transferor. A U.S. transferor is a U.S. person other
than a domestic partnership. See Regulations section
1.721(c)-1(b)(18).
Section 721(c) property. Section 721(c) property is
property (other than excluded property) with built-in gain
that is contributed to a partnership by a U.S. transferor,
including pursuant to a contribution described in
Regulations section 1.721(c)-2(d) (partnership
look-through rule). See Regulations section 1.721(c)-1(b)
(15).
U.S. person. A U.S. person is a citizen or resident of the
United States, a domestic partnership, a domestic
corporation, and any estate or trust that isn’t foreign. See
section 7701(a)(30).
Control of a corporation. For purposes of Schedule N,
control of a corporation is ownership of stock possessing
more than 50% of the total combined voting power, or
more than 50% of the total value of shares of all classes of
stock of the corporation. For rules concerning indirect
ownership and attribution, see Regulations section
1.6038-2(c).
Change in a proportional interest. A partner's
proportional interest in a foreign partnership can change
as a result of changes in other partners' interests, for
example, when another partner withdraws from the
partnership. A partner's proportional interest can also
change, for example, by operation of the partnership
agreement (for example, if the partnership agreement
provides that a partner's interest in profits will change on a
set date or when the partnership has earned a specified
amount of profits, then the partner's proportional interest
changes when the set date or specified amount of profits
is reached).
Gain deferral contribution. A gain deferral contribution
is a contribution of section 721(c) property to a section
721(c) partnership for which the recognition of gain is
deferred under the gain deferral method. See Regulations
section 1.721(c)-1(b)(7).
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Instructions for Form 8865 (2023)
the United States (such as an income tax treaty; an estate
and gift tax treaty; or a friendship, commerce, and
navigation treaty):
Penalties
Failure to timely submit all information required of
Category 1 and 2 filers.
Overrides or modifies any provision of the Internal
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A $10,000 penalty is imposed for each tax year of each
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Revenue Code, and
foreign partnership for failure to furnish the required
information within the time prescribed. If the information
isn’t filed within 90 days after the IRS has mailed a notice
of the failure to the U.S. person, an additional $10,000
penalty (per foreign partnership) is charged for each
30-day period, or fraction thereof, during which the failure
continues after the 90-day period has expired. The
additional penalty is limited to a maximum of $50,000 for
each failure.
Causes (or potentially causes) a reduction of any tax
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incurred at any time.
Failure to make such a report may result in a $1,000
penalty ($10,000 in the case of a C corporation). See
section 6712.
Section 6662(j). Penalties may be imposed for
underpayment attributable to undisclosed foreign financial
asset understatements. The term “undisclosed foreign
financial asset” for any tax year includes any asset for
which required information was not provided. An
"undisclosed foreign financial asset understatement"
means for any tax year, the portion of the understatement
for that tax year which is attributable to any transaction
involving an undisclosed foreign financial asset. No
penalty will be imposed for any portion of an
Any person who fails to furnish all of the information
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required within the time prescribed will be subject to a
reduction of 10% of the foreign taxes available for credit
under sections 901 and 960. If the failure continues 90
days or more after the date the IRS mails notice of the
failure, an additional 5% reduction is made for each
3-month period, or fraction thereof, during which the
failure continues after the 90-day period has expired. See
section 6038 (and the underlying regulations) for the
maximum reduction, the exception due to reasonable
cause, and the limits on the amount of these penalties.
underpayment if the taxpayer can demonstrate that the
failure to comply was due to reasonable cause for such
portion of the underpayment and the taxpayer acted in
good faith for such portion of the underpayment. See
sections 6662(j) and 6664(c) for additional information.
Criminal penalties under sections 7203, 7206, and
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7207 may apply for failure to file or for filing false or
fraudulent information.
Failure to comply with a requirement of the gain de-
ferral method. Failure to comply with a requirement of
the gain deferral method, including a failure to comply with
the procedural and reporting requirements imposed under
Regulations sections 1.721(c)-3 and 1.721(c)-6 and
section 6038B, may result in an acceleration event under
Regulations section 1.721(c)-4(b)(2) and a penalty under
section 6038B. See the specific instructions for
Additionally, any person that files under the constructive
owners exception may be subject to these penalties if all
the requirements of the exception aren’t met. Any person
required to file Form 8865 who doesn’t file under the
multiple Category 1 filers exception may be subject to the
above penalties if the other person doesn’t file a correctly
earlier.
Failure to file information required of Category 3 fil-
ers. Any person that fails to properly report a contribution
to a foreign partnership that is required to be reported
under section 6038B and the regulations under that
section is subject to a penalty equal to 10% of the fair
market value (FMV) of the property at the time of the
contribution. This penalty is subject to a $100,000 limit,
unless the failure is due to intentional disregard. In
addition, the transferor must recognize gain on the
contribution as if the contributed property had been sold
for its FMV. See section 6038B for the exception due to
reasonable cause.
Corrections to Form 8865
If you file a Form 8865 that you later determine is
incomplete or incorrect, file a corrected Form 8865 with an
amended tax return following the instructions for the return
with which you originally filed Form 8865. Enter
“corrected” at the top of the form and attach a statement
identifying and explaining the changes.
Specific Instructions
Important: All information must be in English. All
amounts must be stated in U.S. dollars.
Failure to file information required of Category 4 fil-
ers. Any person who fails to properly report all the
information requested by section 6046A is subject to a
$10,000 penalty, in addition to the section 7203 criminal
penalty, unless it is shown that such failure is due to
reasonable cause. If the failure continues for more than 90
days after the IRS mails notice of the failure, an additional
$10,000 penalty will apply for each 30-day period (or
fraction thereof) during which the failure continues after
the 90-day period has expired. The additional penalty
shall not exceed $50,000.
If the information required in a given section exceeds
the space provided within that section, attach a separate
statement(s) to provide the remaining information, using
the same size and format as the printed forms.
Fill in all applicable lines and schedules. All
categories of filers must complete all items on pages 1
and 2, with three exceptions. Complete item E only if, in
addition to filing the form on your own behalf, you are
reporting information about other Category 1 filers under
the multiple Category 1 filers exception, or you are
reporting information about members of your affiliated
group of corporations under the consolidated return
exception. Only Category 1 and 2 filers are required to
Treaty-based return positions. File Form 8833,
Treaty-Based Return Position Disclosure Under Section
6114 or 7701(b), to report a return position that a treaty of
Instructions for Form 8865 (2023)
7
Answer items H10 and H11 only if you are a Category 1
filer.
Assets, for the tax year and includes this form in the total
number of Forms 8865 reported on Form 8938, Part IV,
line 19. For more information, see the Instructions for
Form 8938, generally, and in particular, Duplicative
reporting and Part IV. Excepted Specified Foreign
Financial Assets.
Tax Year
Enter in the space below the title of Form 8865 the tax
year of the foreign partnership that ended with or within
the tax year of the person filing this form. Category 1 or 2
filers must report information for the tax year of the foreign
partnership that ends with or within their tax years. A
Category 3 or 4 filer must report on Schedule O or P,
respectively, transactions that occurred during that filer's
tax year (rather than during the partnership's tax year).
Item F
Information about certain partners. If you are reporting
information about other persons under the multiple
Category 1 filers exception, or are reporting information
about members of your affiliated group of corporations
under the consolidated return exception (see Exceptions
their names, addresses, and identifying numbers. Also,
indicate whether each person is a Category 1 filer or
Category 2 filer, and whether such person constructively
owned an interest in the foreign partnership during the tax
year of the partnership listed at the top of Form 8865,
Identifying Numbers and Addresses
Enter the identifying number of the person filing this
return. Use an employer identification number (EIN) to
identify partnerships, corporations, and estates or trusts.
For individuals, use a social security number (SSN) or
other identification number.
Include the suite, room, or other unit number after the
street address. If the post office doesn’t deliver mail to the
street address and the U.S. person has a P.O. box, show
the box number instead.
Foreign address. Enter the information in the following
order: city or town, state or province, and country. Follow
the country's practice for entering the postal code, if any.
Don’t abbreviate the country name.
Item G1
For the foreign partnership's address, enter the city or
town, the state or province, and the foreign country in that
order. Follow the foreign country's practice in placing the
postal code in the address. Don’t abbreviate the country
name. If the partnership receives its mail in care of a third
party (such as an accountant or attorney), enter “C/O”
followed by the third party's name and street address or
P.O. box.
Item A. Category of Filer
Check the box for each category that describes the
person filing the form. If more than one category applies,
earlier.
Item G2(a)
If the foreign partnership has an EIN, enter it here. Don’t
enter “FOREIGNUS” or “APPLIED FOR.” If the partnership
has no EIN, item G2(b) must be completed.
Item C
Item G2(b)
Enter the filer's share of nonrecourse liabilities,
partnership-level qualified nonrecourse financing, and
other liabilities. Nonrecourse liabilities are those liabilities
of the partnership for which no partner bears the
economic risk of loss. The extent to which a partner bears
the economic risk is determined under the rules of
Regulations section 1.752-2.
A reference ID number (defined below) is required on item
G2(b) only in cases where no EIN was entered on item
G2(a) for the foreign partnership. However, filers are
permitted to enter both an EIN on item G2(a) and a
reference ID number on item G2(b). If applicable, enter
the reference ID number you have assigned to the foreign
partnership identified on item G1.
"Qualified nonrecourse financing" generally includes
financing:
A “reference ID number” is a number established by or
on behalf of the U.S. person identified at the top of page 1
of the form that is assigned to a foreign partnership for
which Form 8865 reporting is required. These numbers
are used to uniquely identify the foreign partnership in
order to keep track of the partnership from tax year to tax
year.
For which no one is personally liable for repayment;
That is borrowed for use in an activity of holding real
•
•
property; and
•
That is borrowed from a qualified person (defined in
section 49(a)(1)(D)(iv)) or is lent or guaranteed by a
federal, state, or local government.
The reference ID number must meet the requirements
below. Don’t enter “FOREIGNUS” or “APPLIED FOR” with
respect to the reference ID number.
See section 465(b)(6) for more information on qualified
nonrecourse financing.
Item D. Identification of Common Parent
If the person filing the form is a member of a consolidated
group, but not the parent, list the name, address, and EIN
of the filer's common parent.
Note. Because reference ID numbers are established by
or on behalf of the U.S. person filing Form 8865, there is
no need to apply to the IRS to request a reference ID
number or for permission to use these numbers.
Item E
Note. Generally, the reference ID number assigned to a
foreign partnership on Form 8865 has relevance only on
Form 8865, its schedules, and any other form that is
Check the item E checkbox only if the Form 8865 filer also
files Form 8938, Statement of Specified Foreign Financial
8
Instructions for Form 8865 (2023)
attached to or associated with Form 8865, and should not
be used for that foreign partnership on other IRS forms.
However, the foreign partnership's reference ID number
should also be entered on Form 8858, Information Return
of U.S. Persons With Respect to Foreign Disregarded
Entities, if the foreign partnership is listed as a tax owner
of a foreign disregarded entity on Form 8858. See the
instructions for Form 8858, line 3c(2), for more
information.
Item G6. Principal Business Activity Code
If the foreign partnership filed Form 1065. Enter the
business code number (principal business activity code)
shown in item C of the Form 1065 filed by the partnership.
If the foreign partnership did not file Form 1065.
Enter the applicable principal business activity code from
Product or Service at the end of these instructions. If the
information necessary to apply the total receipts test is not
available, pick a principal business activity code using the
information you have about the partnership.
Requirements
The reference ID number that is entered on item G2(b)
must be alphanumeric (defined below) and no special
characters or spaces are permitted. The length of a given
reference ID number is limited to 50 characters.
Item G8a. Functional Currency
Enter the foreign partnership's functional currency. See
sections 985 through 989 and the regulations thereunder.
If the partnership had more than one qualified business
unit (QBU), described in Regulations section
For these purposes, the term “alphanumeric” means
the entry can be alphabetical, numeric, or any
combination of the two.
1.989(a)-1(b)(2)(ii), attach a statement identifying each
QBU, its country of operation, and its functional currency.
A QBU under Regulations section 1.989(a)-1(b)(2)(ii) is
any separate and clearly identified unit of a trade or
business of the partnership which maintains separate
books and records.
The same reference ID number must be used
consistently from tax year to tax year for a given foreign
partnership. If for any reason a reference ID number falls
out of use (for example, the foreign partnership no longer
exists due to disposition or liquidation), the reference ID
number used for that foreign partnership cannot be used
again for another foreign partnership for purposes of Form
8865 reporting.
Hyperinflationary exception. A partnership that has a
hyperinflationary currency as its functional currency is
subject to special rules set forth in Regulations section
1.985-3. Generally, under these rules, a partnership must
use the U.S. dollar as its functional currency.
There are some situations that warrant correlation of a
new reference ID number with a previous reference ID
number when assigning a new reference ID number to a
foreign partnership. For example:
Item G8b. Exchange Rate
When translating functional currency to U.S. dollars, you
must use the method specified in sections 985 through
989 and the regulations thereunder. But, regardless of the
specific method required, all exchange rates must be
reported using a “divide-by convention” rounded to at
least four places. That is, the exchange rate must be
reported in terms of the amount by which the functional
currency amount must be divided in order to reflect an
equivalent amount of U.S. dollars. As such, the exchange
rate must be reported as the units of foreign currency that
equal one U.S. dollar, rounded to at least four places.
Don’t report the exchange rate as the number of U.S.
dollars that equals one unit of foreign currency.
In the case of a merger or acquisition, a Form 8865 filer
•
must use a reference ID number which correlates the
previous reference ID number with the new reference ID
number assigned to the foreign partnership; or
In the case of an entity classification election that is
•
made on behalf of the foreign partnership on Form 8832,
Regulations section 301.6109-1(b)(2)(v) requires the
foreign partnership to have an EIN for this election. For the
first year that Form 8865 is filed after an entity
classification election is made on behalf of the foreign
partnership on Form 8832, the new EIN must be entered
on item G2(a) of Form 8865 and the old reference ID
number must be entered on item G2(b). In subsequent
years, the filer may continue to enter both the EIN on item
G2(a) and the reference ID number on item G2(b), but
must enter at least the EIN on item G2(a).
You must correlate the reference ID numbers as
follows: New reference ID number (space) Old reference
ID number. If there is more than one old reference ID
number, you must enter a space between each such
number. As indicated above, the length of a given
reference ID number is limited to 50 characters and each
number must be alphanumeric and no special characters
are permitted.
Note. You must round the result to more than four places
if failure to do so would materially distort the exchange
rate or the equivalent amount of U.S. dollars.
Item H2
If the foreign partnership was required to file Form 1065
for the partnership's tax year listed at the top of page 1 of
Form 8865, check the applicable box and enter the
Internal Revenue Service Center where the form was or
will be filed (or enter “electronic filing” if the form was or
will be filed electronically). Also, check the applicable
box(es) if the foreign partnership was required to file (for
its tax year) Form 8804, Annual Return for Partnership
Withholding Tax (Section 1446); or (for the calendar year
ending with or within the foreign partnership's tax year)
Form 1042, Annual Withholding Tax Return for U.S.
Source Income of Foreign Persons.
Note. This correlation requirement applies only to the first
year the new reference ID number is used.
Instructions for Form 8865 (2023)
9
Item H5
IF amounts were reported on
the following Schedule on
Form 8858...
THEN take those amounts into
account (converting from
GAAP to tax as necessary)
when determining the amounts
to be reported on this
Section 267A disallows a deduction for certain interest or
royalty paid or accrued in agreement with a hybrid
arrangement, to the extent that, under the foreign tax law,
there isn’t a corresponding income inclusion (including
long-term deferral). In the case of a filer that is a tax
resident of the United States (for example, a domestic
corporation or citizen of the United States), report in item
H5 the total amount of interest and royalty paid or accrued
by the foreign partnership for which your distributive share
of deductions is disallowed under section 267A. In the
case of a filer that isn’t a tax resident of the United States
(for example, a domestic partnership), only report in item
H5 the portion of your distributive share of interest and
royalty paid or accrued by the foreign partnership for
which you know, or have reason to know, that one or more
of your owners aren’t allowed a deduction under section
267A. For additional information about section 267A,
including the application of section 267A in the case of
payments by a partnership, see IRS.gov/businesses/
Schedule on Form 8865...
Schedule C
Schedule F
Schedule J
Schedule M
Schedule B.
Schedule L.
Section 4, Part III, Schedule K-2.
Schedule N.
Item H10. Separate Units
Note. Only Category 1 filers (or indirect partners that are
filing the constructive ownership exception statement) are
required to answer items H10a and H10b, if applicable.
Answer "Yes" to item H10a if the filer is a domestic
corporation and (a) the partnership is a hybrid entity; or (b)
the filer, through its interest in the partnership, indirectly
owns an interest in a hybrid entity or indirectly carries on a
business operation outside the United States that, if
carried on by a U.S. person, would constitute a foreign
branch (as defined in Regulations section 1.367(a)-6T(g)
(1)). Under Regulations section 1.1503(d)-1(b)(3), a
hybrid entity means an entity that isn’t taxable as an
association for U.S. federal tax purposes, but is subject to
an income tax of a foreign country as a corporation (or
otherwise at the entity level) either on its worldwide
income or on a residence basis. If the answer to item
H10a is "No," skip item H10b.
Item H6
Answer “Yes” to item H6 if the partnership is a section
721(c) partnership. If the answer is “Yes,” see the specific
instructions for Schedules G and H, relating to the gain
deferral method, and, if applicable, Schedule O, relating to
the contribution of property during the tax year. See
Section 721(c) partnership, earlier.
Item H8
See Regulations section 1.1503(d)-1(b)(4) for more
information on separate units, including information on
when two or more individual separate units are combined
and treated as one separate unit. If you answer “Yes” to
item H10b, then, for each separate unit that has a dual
consolidated loss, attach a statement that sets forth (a)
the identity and country of operation of the separate unit
or, in the case of a combined separate unit, the identity
and country of operation of each individual separate unit
that is treated as part of the combined separate unit; and
(b) the amount of the dual consolidated loss. See
Regulations section 1.1503(d)-5 for rules on determining
the amount of a dual consolidated loss attributable to a
separate unit.
Note. Only Category 1 and 2 filers are required to
complete item H8.
Enter the number of Forms 8858 attached to Form
8865. A disregarded entity is an entity that is disregarded
as an entity separate from its owner under Regulations
section 301.7701-2(c)(2). The partnership is the tax owner
of the foreign disregarded entity if it is treated as owning
the assets and liabilities of the foreign disregarded entity
for purposes of U.S. income tax law.
If the foreign partnership is the tax owner of a foreign
disregarded entity or operates a foreign branch and you
are a Category 1 or 2 filer of Form 8865, complete and
attach Form 8858 to Form 8865. For more information,
see the Instructions for Form 8858. In addition, if the
foreign partnership is required to attach Form 8858 to
Form 8865, the amounts reported on certain schedules on
Form 8858 must be included in determining the amounts
reported on the equivalent schedules as follows.
Item H11
Note. Only Category 1 filers are required to answer item
H11.
Answer “Yes” to item H11 if the partnership meets both
of the requirements shown on the form. Total receipts is
defined as the sum of gross receipts or sales (Schedule B,
line 1a); all other income reported on Schedule B (lines 4
through 7); income reported on Schedule K, lines 3a, 5,
6a, and 7; income or net gain reported on Schedule K,
lines 8, 9a, 10, and 11; and income or net gain reported
on Form 8825, Rental Real Estate Income and Expenses
of a Partnership or an S Corporation, lines 2, 19, and 20a.
Item H12
Check the “Yes” box on item H12a if the filer of this Form
8865 is claiming a deduction under section 250 for
10
Instructions for Form 8865 (2023)
foreign-derived intangible income (FDII), and enter the
amounts requested on items H12b, H12c, and H12d.
Enter U.S. dollar amounts on items H12b, H12c, and
H12d, translated from functional currency at the average
exchange rate for the foreign partnership's tax year (see
section 989(b)).
Category 3 filers. Category 3 filers must list the persons
(U.S. and foreign) whose interests in the foreign
partnership they constructively owned during the filer's tax
year that the reportable transfer occurred. See
Partnership, later.
The reported amounts should provide information for
transactions between the filer of the Form 8865 and the
foreign partnership. See Form 8993 and its instructions for
information on the section 250 deduction. If no deduction
is being claimed, check the “No” box.
Schedule A-1. Certain Partners of
Foreign Partnership
All Category 1 and certain Category 3 filers must
complete Schedule A-1. Any person already listed on
Schedule A isn’t required to be listed again on
Schedule A-1.
Item H14
Answer “Yes” if at any time during the year there were
transfers between the partnership and its partners subject
to the disclosure requirements of Regulations section
1.707-8. For certain transfers that are presumed to be
sales, the partnership or the partners must comply with
the disclosure requirements in Regulations section
1.707-8. Generally, disclosure is required when:
Category 1 filers. Category 1 filers must list all U.S.
persons who owned at least a 10% direct interest in the
foreign partnership during the partnership's tax year listed
at the top of page 1 of Form 8865.
Category 3 filers. Category 3 filers must list:
Each U.S. person that owned a 10% or greater direct
•
1. Certain transfers to a partner are made within 2
years of a transfer of property by the partner to the
partnership;
2. Certain debt is incurred by a partner within 2 years
of the earlier of (a) a written agreement to transfer, or (b) a
transfer of the property that secures the debt, if the debt is
treated as a qualified liability; or
interest in the foreign partnership during the Category 3
filer's tax year, and
Any other person related to the Category 3 filer that was
•
a direct partner in the foreign partnership during that tax
year.
See Regulations section 1.6038B-2(i)(4) for the
definition of a related person.
3. Transfers from a partnership to a partner occur
Exception. Category 3 filers who only transferred cash
and didn’t own a 10% or greater interest in the transferee
partnership after the transfer aren’t required to complete
Schedule A-1.
which are the equivalent to those listed in (1) or (2) above.
The disclosure must be made on the transferor
partner's return using Form 8275, Disclosure Statement,
or on an attached statement providing the same
information. When more than one partner transfers
property to a partnership under a plan, the disclosure may
be made by the partnership rather than each partner.
Schedule A-2. Foreign Partners of
Section 721(c) Partnership
Schedule A-2 must be completed if (1) item H6 is
answered “Yes” (that the partnership is a section 721(c)
partnership); and (2) during the current tax year, a gain
deferral contribution occurred, or (3) a gain deferral
contribution occurred in a prior tax year (including before
2021) and, during the current tax year, the gain deferral
method is applied to section 721(c) property contributed
in the prior gain deferral contribution. See Section 721(c)
method, earlier.
Signature
Filer. Don’t sign Form 8865 if you are filing it as an
attachment to your income tax return. Sign the return only
if you are filing Form 8865 separately because you aren’t
required to file a U.S. income tax return. See When and
Paid preparer. Don’t sign Form 8865 or complete the
paid preparer section at the bottom of the form if Form
8865 is filed as an attachment to an income tax return.
Sign Form 8865 and complete the paid preparer section
only if Form 8865 is filed separately.
Country of organization. Insert the 2-letter country
code for the country of organization for any foreign
partner, other than an individual. See country codes on
Check if related to U.S. transferor. Check the box if the
partner is directly or indirectly related to the U.S. transferor
(within the meaning of section 267(b) or 707(b)(1)) and
isn’t a U.S. person.
Percentage interest. Include the foreign partner's
percentage of interest in the partnership's capital and
profits immediately after the gain deferral contribution. If
multiple gain deferral contributions occurred during the tax
year, enter the percentages immediately after the last gain
earlier.
Schedule A. Constructive Ownership
of Partnership Interest
All filers must complete Schedule A. Check box a if the
person filing the return owns a direct interest in the foreign
partnership. Check box b if the person filing the return
constructively owns an interest in the foreign partnership.
Category 1 and 2 filers. Category 1 and 2 filers must list
the persons (U.S. and foreign) whose interests in the
foreign partnership they constructively owned during the
partnership’s tax year.
Instructions for Form 8865 (2023)
11
Schedule A-3. Affiliation Schedule
Schedule G (Form 8865). Statement
of Application of the Gain Deferral
Method Under Section 721(c)
All filers must complete Schedule A-3. List on
Schedule A-3 all partnerships (foreign or domestic) in
which the foreign partnership owned a direct interest, or a
10% indirect interest (under the rules of sections 267(c)(1)
and (5)) during the partnership tax year listed at the top of
page 1 of Form 8865.
A U.S. transferor uses Schedule G to comply with the
reporting requirements that must be satisfied in applying
the gain deferral method. If the gain deferral method is
applied to section 721(c) property, a U.S. transferor must
file Schedule G for the tax year of a gain deferral
contribution, as well as for each subsequent tax year to
which the gain deferral method is applied to section
721(c) property, even if the gain deferral contribution for
that property occurred before 2018. See Regulations
sections 1.721(c)-6(b)(2) and (3). See Gain deferral
property, earlier.
Category 1 filers. Only Category 1 filers must complete
the Total ordinary income or loss column. In that column,
report the foreign partnership's share of ordinary income
(even if not received) or loss from partnerships in which
the foreign partnership owns a direct interest. The total
amount of ordinary income or loss from each partnership
must also be included on Schedule B, line 4.
Schedule B. Income
Statement—Trade or Business
Income
Important: All Category 1 filers in partnerships engaged
in a domestic or foreign trade or business must complete
Form 8865, Schedule B.
If the partnership is a section 721(c) partnership and
the gain deferral method is applied, Schedule B must
include any remedial items for section 721(c) property,
including an offsetting remedial item relating to
contributed section 197(f)(9) property. See Regulations
sections 1.704-3(d) and 1.704-3(d)(5)(iii). The total net
amount of remedial allocations should be included on
line 7, Other income (loss). Attach a detailed statement
describing the remedial items allocated to each partner
during the tax year for section 721(c) property. See
Regulations section 1.721(c)-3. See Section 721(c)
method, earlier.
Filing Year
Check the box for “Tax year of gain deferral contribution” if
your tax year is a year in which a gain deferral contribution
occurred (a gain deferral contribution year). Check the
“Annual reporting” box if a gain deferral contribution
occurred in a year prior to the current tax year and, in the
current tax year, the gain deferral method applies to
section 721(c) property contributed in the prior gain
deferral contribution (an annual reporting year). If the tax
year is both a gain deferral contribution year and an
annual reporting year, both boxes should be checked.
General Instructions
On Schedule G, information must be provided for section
721(c) property that was (a) contributed to the partnership
in a gain deferral contribution that occurred during the
current tax year; or (b) contributed to the partnership in a
gain deferral contribution that occurred during a prior tax
year, provided that the gain deferral method is applied to
the property in the current tax year. Collectively, section
721(c) property for which information must be reported on
Schedule G is referred to as “reportable section 721(c)
Specific Instructions for Schedule B
For specific instructions for Form 8865, Schedule B, use
the instructions for Form 1065, lines 1a through 21
(income and deductions).
In Parts I through V, information must be provided on a
property-by-property basis. In Part I, reportable section
721(c) properties and accompanying information must be
listed in descending order of FMV (measured at the time
of contribution). Thus, the reportable section 721(c)
property with the highest FMV should be listed on line 1,
the reportable section 721(c) property with the second
highest FMV should be listed on line 2, and so on.
In Parts II through IV, the line on which information is
provided for a reportable section 721(c) property must
correspond to the line on which the property is listed in
Part I. Thus, in Parts II through IV, line 1 corresponds to
Part I, line 1, and line 2 corresponds to Part I, line 2, and
so on.
If there are more than four reportable section 721(c)
properties, in Parts I through IV, attach a statement using
the same format as in Parts I through IV, listing properties,
or information for properties, in the same manner as
described in the preceding two paragraphs. For example,
the first line on the statement for Part I must be labeled “5”
and contain columns with the same information as those
You can view or download the Instructions for
instructions can be ordered by calling
TIP
800-829-3676 (800-TAX-FORM).
Schedule D. Capital Gains and Losses
Important: All Form 8865 Category 1 filers in
partnerships having partnership items described in the
Instructions for Schedule D (Form 1065), Capital Gains
and Losses, must complete that schedule.
You can view or download the Schedule D (Form
1065) and the Instructions for Schedule D (Form
TIP
the form and its instructions can be ordered by calling
800-829-3676 (800-TAX-FORM).
12
Instructions for Form 8865 (2023)
in Part I, and must list the reportable section 721(c)
property with the fifth-highest FMV. The statements for
Parts I through IV may be combined in a single attached
statement, provided that the format described above is
followed.
721(c) property listed, check “Yes” on the corresponding
line in Part V of Schedule G and complete Schedule H.
See the Part V instructions below.
Part II. Remaining Built-in Gain, Remedial
Income, and Gain Recognition
A U.S. transferor should complete and file only one
earlier.
Provide the requested information for each reportable
Schedule G, earlier, for the order in which properties must
be listed and when an attached statement can and must
be used. On line 4a, provide the total amounts in each
column for all reportable section 721(c) property, including
property listed on an attached statement.
Part I. Section 721(c) Property
Provide the requested information for each reportable
Schedule G above for the order in which properties must
be listed and when an attached statement can and must
be used. If there are more than four reportable section
721(c) properties, enter on line 4a the following
information for the reportable section 721(c) properties
listed on the attached statement.
Column (a). Remaining built-in gain at beginning of
tax year. For a reportable section 721(c) property, enter
the amount of remaining built-in gain at the beginning of
the tax year. If the property was contributed in the current
tax year, enter the property’s built-in gain on the date of
the contribution (Part I, column 6(c)).
Column (b). Remaining built-in gain at end of tax
year. For a reportable section 721(c) property, enter the
amount of remaining built-in gain at the end of the tax
year, figured under the gain deferral method.
1. In columns 6(a) through 6(c), provide the aggregate
FMV, basis, and built-in gain, respectively, of the
properties.
2. Check the boxes in columns 4, 5, and 7(a)–(e) if
applicable to any of the properties.
Column (c). Remedial income allocated to the U.S.
transferor. For a reportable section 721(c) property,
enter the remedial income allocated to the U.S. transferor
under the remedial allocation method. When the gain
deferral method applies to a section 721(c) property, the
partnership must use the remedial allocation method
described in Regulations section 1.704-3(d) for the
property. See Regulations section 1.721(c)-3(b)(1)(i)(A).
Column (d). Gain recognized due to acceleration
event. For a reportable section 721(c) property, enter the
amount of built-in gain taken into account by reason of an
acceleration event or partial acceleration event. See
Regulations sections 1.721(c)-4 and 1.721(c)-5 for events
constituting an acceleration event or partial acceleration
event and for the consequences of such events.
Column (e). Gain recognized due to section 367
transfer. For a reportable section 721(c) property, enter
the amount of gain recognized by the U.S. transferor
pursuant to Regulations section 1.721(c)-5(e) (regarding
transfers, including indirect transfers, described in section
367 of section 721(c) property to a foreign corporation).
Gain recognized under section 367 should not be
included in column 5. Instead, column 5 should list only
the amount of gain recognized pursuant to Regulations
section 1.721(c)-5(e) (requiring the U.S. transferor to
recognize an amount of gain equal to the remaining
built-in gain (if any) that would have been allocated to the
U.S. transferor if the partnership had sold the remaining
portion of the property immediately before the transfer for
FMV).
Don’t complete line 4a if there are four or fewer
reportable section 721(c) properties.
!
CAUTION
Note. Schedule O, Transfer of Property to a Foreign
Partnership, may need to be completed if, during the tax
year, the U.S. transferor contributed property (including
section 721(c) property) to the partnership. See the
Schedule O instructions, later.
Column 4. Section 197(f)(9) property. Check the box
for the reportable section 721(c) property if the property is
an intangible described in section 197(f)(9).
Column 5. Effectively connected income property.
Check the box for the reportable section 721(c) property if
(a) all distributive shares of income and gain with respect
to the property for all direct and indirect partners that are
related foreign persons for the U.S. transferor will be
subject to taxation as income effectively connected with a
trade or business within the United States (under section
871 or 882), and (b) neither the section 721(c) partnership
nor a related foreign person that is a direct or indirect
partner in the partnership claims benefits under an income
tax convention that would exempt the income or gain from
tax or reduce the rate of taxation to which the income or
gain is subject. See Regulations sections 1.721(c)-3(b)(1)
(ii) and 1.721(c)-6(c)(1).
Column 6(a). Fair market value. Enter the FMV of the
reportable section 721(c) property, measured as of the
date of contribution.
Column 6(b). Basis. Enter the adjusted tax basis of the
reportable section 721(c) property on the date of the
contribution. See sections 1011 through 1016 for more
information for the determination of adjusted tax basis.
Column 7. Events. Check the box for each of columns
7(a) through 7(e) which describes an event that occurred
during the tax year for the reportable section 721(c)
property. If a box is checked for any reportable section
Part III. Allocation Percentages of Partnership
Items With Respect to Section 721(c) Property
For each reportable section 721(c) property, enter the
percentage of income, gain, deduction, and loss allocated
to the U.S. transferor, related domestic partners, and
Schedule G, earlier, for the order in which properties must
Instructions for Form 8865 (2023)
13
be listed and when an attached statement can and must
be used. See section 267(b) or 707(b)(1) for rules on
determining related partners, and see Regulations section
1.721(c)-3(c) for a rule requiring that the partnership apply
the consistent allocation method when the gain deferral
method applies.
Schedule H (Form 8865). Acceleration
Events and Exceptions Reporting
Relating to Gain Deferral Method
Under Section 721(c)
If the gain deferral method is being applied to reportable
section 721(c) property, complete and file Schedule H to
report certain events related to the section 721(c)
property. See Regulations sections 1.721(c)-4 and -5 for
more information. Complete a separate Schedule H for
each partnership.
Part IV. Allocation of Items to U.S. Transferor
With Respect to Section 721(c) Property
For each reportable section 721(c) property, enter the
amount (both book and tax) of income, gain, deduction,
and loss allocated to the U.S. transferor under the gain
Schedule G, earlier, for the order in which properties must
be listed and when an attached statement can and must
be used. In addition, a description of any tax item or
regulatory allocation for a reportable section 721(c)
property that is allocated to the U.S. transferor must be
included in Part VI, Supplemental Information.
General instructions. Complete all Parts of Schedule H
that correspond to the box or boxes checked in
Schedule G, Part I, column 7, and the related line on Part
V checked “Yes.” If additional lines are needed to report
the information required in Parts I through V, attach a
statement in the same format as the format used in the
Part, in Part VI, Supplemental Information. See Section
721(c) property, earlier.
For Parts I–III and V, enter in column (a) the line number
for the section 721(c) property from Schedule G, Part I. If
the impacted section 721(c) property is listed on an
attached statement to Schedule G, Part I, enter the line
number from the attached statement on which that
property was identified.
Part V. Additional Information
Part V provides questions relating to whether certain
events have occurred in the current tax year for one or
more reportable section 721(c) properties and information
relating to treaty benefits. Such events include:
Acceleration events (see Regulations section
•
1.721(c)-4),
Partial acceleration events (see Regulations section
•
1.721(c)-5(d)),
Termination events (see Regulations section
Part I. Acceleration Event
•
Acceleration event. An acceleration event is any event
that either would reduce the amount of the remaining
built-in gain that a U.S. transferor would have recognized
under the gain deferral method if the event had not
occurred or could defer the recognition of the remaining
built-in gain. Acceleration events are applicable on a
property-by-property basis. An acceleration event
includes the transfer of section 721(c) property by making
a contribution of the property itself to another partnership
or the contribution of an interest in a section 721(c)
partnership to another partnership. When an acceleration
event occurs for a section 721(c) property, the U.S.
transferor must recognize gain in an amount equal to
remaining built-in gain in the property that would have
been allocated to the U.S. transferor if the section 721(c)
partnership had sold the section 721(c) property
1.721(c)-5(b)),
Successor events involving a successor partnership or
•
U.S. transferor (see Regulations section 1.721(c)-5(c)),
Taxable disposition of a portion of an interest in a
•
partnership (see Regulations section 1.721(c)-5(f)), and
Direct or indirect transfer of section 721(c) property to a
•
foreign corporation subject to section 367 (see
Regulations section 1.721(c)-5(e)).
Lines 1 through 6b. If the answer is “Yes” to any of the
questions on lines 1 through 6b of Part V, also complete
and attach Schedule H (Form 8865). See the separate
instructions later for Schedule H. In addition, the
corresponding checkboxes in Part I, columns 7(a) through
7(e), should be marked, as applicable.
Line 7a. If the answer is “Yes,” attach to Form 8865 a
copy of the waiver of treaty benefits for the reportable
section 721(c) property. See Regulations sections
1.721(c)-6(b)(2)(iii) and 1.721(c)-6(c).
immediately before the acceleration event for FMV.
Following the event, the gain deferral method no longer
applies to that section 721(c) property. See Regulations
section 1.721(c)-4 for rules relating to acceleration events.
At any time, a U.S. transferor may affirmatively treat an
acceleration event as having occurred (a deemed
acceleration event) for a section 721(c) property by both
recognizing the remaining built-in gain in that section
721(c) property and satisfying the reporting requirements
of the acceleration event. See Regulations section
1.721(c)-4(b)(4).
Column (b). Provide a description of the acceleration
event, including the citation in the case of a partial or
deemed acceleration event. See Regulations section
1.721(c)-6(b)(3)(iv). Use Part VI if additional space is
needed to describe the transaction.
Part VI. Supplemental Information
Information to be reported. When providing any
information in Part VI, indicate the Part, Part column, and
line for which the information is provided.
Additional Part rows. If an attached statement is used in
Parts I through IV, include the statement “Additional
Section 721(c) Property statement(s) is/are attached” in
the area provided in Part VI.
Other information. Use the Supplemental Information
section to provide any additional information required by
Regulations section 1.721(c)-6 that isn’t captured in Parts
I through IV above.
14
Instructions for Form 8865 (2023)
events, a domestic corporation becomes the successor
U.S. transferor. In other successor events, a partnership
becomes the successor section 721(c) partnership. A
successor section 721(c) partnership may be a new,
upper-tier, or lower-tier partnership. The identifying
information must include the name, address, and U.S.
taxpayer identification number (TIN), if any, of the
successor U.S. transferor or successor section 721(c)
partnership.
Column (d). Enter the amount of the gain recognized by
the U.S. transferor for the section 721(c) property resulting
from the acceleration event.
Column (e). Enter the amount that the section 721(c)
partnership will increase its basis in the section 721(c)
property as a result of the acceleration event. See
Regulations sections 1.721(c)-4(c)(2) and 1.721(c)-5(d) in
the case of a partial acceleration event.
Column (f). Check the box if there is a partial
Part IV. Taxable Disposition of a Portion of an
Interest in Partnership Event
acceleration event and the U.S. transferor recognizes a
partial gain for the section 721(c) property. Certain
distributions of other partnership property to a partner that
result in an adjustment under section 734 to the section
721(c) property constitute a partial acceleration event
requiring that the U.S. transferor recognize gain. If there is
a remaining built-in gain in the section 721(c) property
immediately after the partial acceleration event, the gain
deferral method must continue to apply and the U.S.
transferor is required to continue to report the information
on Schedule G for that property. See Regulations section
1.721(c)-5(d).
Part IV reports the information relating to a fully taxable
disposition of a portion of an interest in a section 721(c)
partnership. Complete this Part if a U.S. transferor or a
partnership in which a U.S. transferor is a direct or indirect
partner disposes of (directly or indirectly through one or
more partnerships) a portion of an interest in a section
721(c) partnership in a transaction in which the gain or
loss, if any, is recognized. This will not be an acceleration
event for the portion of the interest transferred. The gain
deferral method will continue to apply for the section
721(c) property of the section 721(c) partnership. The
rules of Regulations section 1.704-3(a)(7) are applied to
determine the remaining built-in gain in the section 721(c)
property on a property-by-property basis that is
Part II. Termination Event
A termination event causes the gain deferral method to no
longer apply for the affected section 721(c) property on a
property-by-property basis. Regulations section
1.721(c)-5(b) identifies the termination events.
attributable to the portion of the interest in the section
721(c) partnership is retained. See Regulations section
1.721(c)-5(f).
Column (b). Provide a description of the termination
event, including the citation to the relevant paragraph in
Regulations section 1.721(c)-5(b). See Regulations
section 1.721(c)-6(b)(3)(v). Use Part VI if additional space
is needed to describe the transaction.
Column (a). Provide a description of the disposition of
the interest in the partnership, including whether the
interest was a direct or indirect interest (through one or
more partnerships). If more than one taxable disposition
event occurs in the tax year, provide the required
information for each event separately in Part IV in
chronological date order. If additional space is needed,
provide the information in Part VI.
Column (c). Enter the percentage of partnership interest
that was disposed of in the event to which all gain or loss,
if any, is recognized.
Column (d). Enter the percentage of the partnership
interest (directly or indirectly through one or more
partnerships) that the U.S. transferor retained immediately
after the event.
Column (e). Enter the aggregate amount of the
remaining built-in gain for all of the section 721(c)
properties that is attributable to the portion of the interest
in the section 721(c) partnership that is retained. Attach a
detailed supporting schedule to Schedule H that
separately states each remaining section 721(c) property
and its respective remaining built-in gain allocable to the
U.S. transferor included in the aggregate amount reported
in column (e).
Part III. Successor Event
A successor event allows for the continued application of
the gain deferral method for the affected section 721(c)
property on a property-by-property basis by a successor
U.S. transferor or a successor section 721(c) partnership.
However, if the successor doesn’t continue the gain
deferral method, the event is an acceleration event and
must be reported in Part I above. Successor events are
applicable on a property-by-property basis. If only a
portion of an interest in a partnership is transferred in a
successor event, the rules of Regulations section
1.704-3(a)(7) are applied to determine the remaining
built-in gain in the section 721(c) property that is
attributable to the portion of the interest that is transferred
and the portion that is retained. Regulations section
1.721(c)-5(c) identifies the successor events, including
special rules for transactions involving tiered partnerships.
If more than one successor event occurs in the tax
year, provide the required information for each event
separately in Part IV in chronological date order.
Column (b). Provide a description of the successor
event, including the citation to the relevant paragraph in
Regulations section 1.721(c)-5(c). See Regulations
section 1.721(c)-6(b)(3)(v). Use Part VI if additional space
is needed to describe the transaction.
Part V. Section 367 Transfer Event
Part V reports the information relating to a transfer
described in section 367 of section 721(c) property to a
foreign corporation. See Regulations section
1.721(c)-5(e). Section 367 events include:
Transfer of section 721(c) property by a section 721(c)
•
Column (d). Enter the identifying information of the
partnership to a foreign corporation, or
relevant successor, as applicable. In certain successor
Instructions for Form 8865 (2023)
15
Transfer by a U.S. transferor or a partnership in which a
Information, provide the information in an attachment or
attachments to Schedule H in the same format as required
for the row on the Part at issue. If separate supplemental
schedules are used for any Part of Schedule H for specific
section 721(c) properties, use the same corresponding
identification line number from the Part I of Schedule G for
such property on the supplemental schedule for
Schedule H.
Other information. Use the Supplemental Information
section to provide any additional information required by
Regulations section 1.721(c)-6 that isn’t reported in Parts I
through V above.
•
U.S. transferor is a direct or indirect partner transfers
(directly or indirectly through one or more partnerships) all
or a portion of the section 721(c) partnership that owns
section 721(c) property to a foreign corporation.
As a result of the section 367 event, the section 721(c)
property is no longer subject to the gain deferral method.
The U.S. transferor is treated as transferring the section
721(c) property to a foreign corporation and is subject to
taxation on the transfer under section 367. See the section
367 regulations for rules relating to gain or income
recognition under section 367.
Note. A transfer of property to a foreign corporation by a
U.S. transferor is subject to other reporting requirements
under sections 367, 351, 368, and 6038B (for example,
the filing of Form 926), as applicable. See the related
regulations under these Code sections. Such reporting
requirements are in addition to the filing of Schedule H.
After considering the tax consequences under section
367, the remaining built-in gain, if any, for the section
721(c) property is recognized by the U.S. transferor to the
extent that would have been allocated to the U.S.
transferor had the section 721(c) partnership sold that
portion of the property immediately before the transfer for
FMV.
Column (b). Provide a description of the section 367
transfer, including whether the transfer was a direct or
indirect transfer (through one or more partnerships) of
section 721(c) property to a foreign corporation. If more
than one section 367 transfer occurs in the tax year,
provide the required information for each transfer
separately in Part IV in chronological date order. If
additional space is needed, provide the information in Part
VI.
Schedules K, Partners' Distributive
Share Items, and K-1 (Form 8865),
Partner’s Share of Income,
Deductions, Credits, etc.
Schedule K
Form 8865, Schedule K, is a summary schedule of all of
the partners' shares of the partnership income, credits,
deductions, etc. Only Category 1 filers must complete
Form 8865, Schedule K.
Schedule K-1
Schedule K-1 (Form 8865) is used to report a specific
partner's share of the partnership income, deductions,
credits, etc.
All Category 1 and 2 filers must complete Schedule K-1
(Form 8865) for any direct interest they hold in the
partnership. A Category 1 or 2 filer that doesn’t own a
direct interest is not required to complete Schedule K-1
(Form 8865).
Column (d). Enter the amount of the remaining portion of
built-in gain recognized by the U.S. transferor under
section 721(c). The amount of gain equals the remaining
portion of the built-in gain that would have been allocated
to the U.S. transferor if the section 721(c) partnership had
sold that portion of the section 721(c) property
Category 1 filers must also complete Schedule K-1
(Form 8865) for each U.S. person that directly owns a
10% or greater direct interest in the partnership.
Provide the partner's beginning and year-end
percentage interests in partnership profits, losses, capital,
or deductions. These percentages should include any
interest constructively owned by the filer.
immediately before the transfer for FMV. This amount
should not include any gain or income recognized by the
U.S. transferor pursuant to section 367 that is reported
elsewhere on the return. See Regulations section
1.721(c)-5(e). After the section 367 transfer, the
transferred section 721(c) property will no longer be
subject to the gain deferral method.
Column (e). Enter the identifying information of the
foreign transferee corporation that received the section
721(c) property in the section 367 transfer. The identifying
information includes the name, address, and U.S.TIN, if
any.
Complete boxes 1 through 21 for any direct interest that
the partner owns in the partnership.
Example. Partner A owns a 45% direct interest in a
foreign partnership (FPS). Partner A also owns 100% of
the stock of a domestic corporation (DC), which owns a
10% direct interest in FPS. Therefore, Partner A is
considered to own a 55% interest in FPS and is thus a
Category 1 filer. When Partner A completes Schedule K-1
(Form 8865) for itself, Partner A must report the
distributive share of items allocated to Partner A's direct
interest of 45% but not any items allocated to DC's 10%
interest. When Partner A completes Schedule K-1 (Form
8865) for DC (which Partner A must do because DC owns
a direct 10% interest), Partner A must report on DC's
Schedule K-1 (Form 8865) only items allocated to DC's
direct 10% interest.
Part VI. Supplemental Information
Information to be reported. When providing any
information in the Supplemental Information, indicate the
Part, Part column, row, and line for which the information is
provided.
Additional Part rows. If additional rows are needed to
Although the partnership isn’t subject to income tax, the
partners are liable for tax on their shares of the
enter information in Parts I through V in the Supplemental
16
Instructions for Form 8865 (2023)
partnership income, whether or not distributed, and must
include their share of such items on their tax returns.
method, earlier.
Codes. In box 11 and boxes 13 through 21, identify each
item by entering a code in the column to the left of the
dollar amount entry space. These codes are identified in
For Box 11—Code ZZ. Other, see Other code ZZ in the
Instructions for Form 1065.
Attached statements. When attaching statements to
Schedule K-1 to report additional information to the
partner, indicate there is a statement for the following.
Allocations of income, gains, losses, deductions, or
credits among the partners should generally be made
according to the partnership agreement. See section 704
and the regulations thereunder.
Schedule K-1 (Form 8865) for related foreign part-
ners. If the gain deferral method is applied and a section
721(c) partnership doesn’t have a filing obligation under
section 6031, the U.S. transferor must obtain a
Schedule K-1 (Form 8865) for each direct or indirect
partner that is related to the U.S. transferor (within the
meaning of section 267(b) or 707(b)(1)) and that isn’t a
U.S. person (related foreign partner). See Regulations
section 1.721(c)-6(c)(3). The Schedule K-1 (Form 8865)
for each related foreign partner must be filed and attached
to the Form 8865 as part of the annual reporting relating to
the gain deferral method pursuant to Regulations section
1.721(c)-6(b)(3)(xi). The instructions that apply to
Schedule K-1 (Form 8865) for all other partners also apply
to a Schedule K-1 (Form 8865) for a related foreign
If an amount can be input on Schedule K-1 but
•
additional information is required, enter an asterisk (*)
after the code in the column to the left of the entry space.
For items that can't be reported as a single dollar
•
amount, enter the code and an asterisk (*) in the column
to the left and enter “STMT” in the right column to indicate
that the information is provided on an attached statement.
If the partnership has more coded items than the
•
number of entry boxes (for example, boxes 11 and 13
through 15, or boxes 17 through 21), don't enter a code or
dollar amount in the last entry box. Instead, enter an
asterisk (*) in the left column and enter “STMT” in the
entry space to the right.
More than one attached statement can be placed on
the same sheet of paper. The information included in the
statement should be identified in alphanumeric order by
box number followed by the letter code (if any),
General Reporting Instructions for Schedule K-1
(Form 8865)
On each Schedule K-1 (Form 8865), enter the information
about the partnership and the partner in Parts I and II
(items A through F). For Schedule K-1 (Form 8865), items
E and F, see the instructions for the corresponding
Schedule K-1 (Form 1065), items J and L, in the
Instructions for Form 1065 under Specific Instructions
(Schedule K-1 only). In Part III, enter the partner's
distributive share of each item of income, deduction, and
credit and any other information the partner needs to
prepare the partner's tax return.
description, and dollar amount for each item. For example:
“Box 15, code J—Work opportunity credit—$1,000.” This
can be followed with any additional information the partner
needs to determine the proper tax treatment of the item.
Specific Instructions for Schedules K and K-1
For the specific instructions for Form 8865, Schedule K,
and Schedule K-1 (Form 8865), see the Instructions for
Form 1065.
If the partnership is a section 721(c) partnership,
box 20 (code AL—Section 721(c) partnership) of
Schedule K-1, Part III, must include the amounts relating
to any remedial items made under the remedial allocation
method (described in Regulations sections 1.704-3(d) and
1.704-3(d)(5)(iii)) for section 721(c) property. For the
specific partner's information relating to the remedial
method allocations and gain deferral method, see the
Instructions for Form 1065, especially the Partner's
Instructions for Schedule K-1 (Form 1065).
Line 16. If the partnership had items of international tax
relevance, see the Instructions for Schedules K-2 and K-3
(Form 8865) to determine if you need to check the box
and attach Schedules K-2 and K-3.
Item A2
Enter the reference ID number used on Form 8865, item
Part III—line 1. If the gain deferral method is applied to
which the section 721(c) partnership adopts the remedial
allocation method, the amounts reflected on each
partner's Schedule K-1 for the allocations of income,
gains, losses, deductions, or credits allocated to such
partner must include any allocations of remedial items for
section 721(c) property. See Regulations section
1.721(c)-3(c).
For example, if the partner is the U.S. transferor of
section 721(c) property, Part III, line 1, would include any
remedial income allocated to the U.S. transferor from
Schedule G, Part II, column (c), Remedial income
allocated to U.S. transferor, as applicable. For partners
other than the transferor, Part III, line 1, would include their
share of ordinary business income (or loss) after taking
into account any remedial items to such partner relating to
section 721(c) property. However, Part III, line 1, would not
include basis adjustments attributable to section 197(f)(9)
for related foreign partners. See Regulations sections
1.704-3(d)(5)(iii) and 1.721(c)-3. See Section 721(c)
Instructions for Form 8865 (2023)
17
page 1 of Form 8865, you don’t have to complete Form
8865, Schedule M-1.
Schedules K-2 (Form 8865), Partners’
Distributive Share
Specific Instructions for Schedule M-1
For the specific instructions for Schedule M-1 (Form
8865), see the Instructions for Form 1065.
Items—International, and K-3 (Form
8865), Partner’s Share of Income,
Deductions, Credits,
Schedule M-2. Analysis of Partners'
Capital Accounts
etc.—International
Schedule K-2
Schedule K-2 (Form 8865) is an extension of Schedule K
of the Form 8865 and is used to report items of
international tax relevance from the operation of a
partnership.
Only Category 1 filers are required to complete Form
8865, Schedule M-2. If you answered "Yes" to item H11 on
page 1 of Form 8865, you don’t have to complete Form
8865, Schedule M-2.
Specific Instructions for Schedule M-2
For the specific instructions for Form 8865, Schedule M-2,
see the Instructions for Form 1065.
Schedule K-3
Schedule K-3 (Form 8865) is an extension of
Schedule K-1 (Form 8865) and is generally used to report
the partner’s share of the items reported on Schedule K-2.
The information reported on Schedule K-3 is used to
report information on a partner’s tax or information returns.
Schedule N. Transactions Between
Controlled Foreign Partnership and
Partners or Other Related Entities
For more information, see the Instructions for
Schedules K-2 and K-3 (Form 8865).
All Category 1 filers must complete Schedule N and report
all transactions of the foreign partnership during the tax
year of the partnership listed on the top of Form 8865,
page 1. A Category 1 filer filing a Form 8865 for other
Category 1 filers under the multiple Category 1 filers
exception must complete a Schedule N for itself and a
separate Schedule N for each Category 1 filer not filing
Form 8865.
Schedule L. Balance Sheets per
Books
The balance sheets should agree with the partnership's
books and records. Attach a statement explaining any
differences.
Category 2 filers are required to complete columns (a),
(b), and (c) of Schedule N. Category 2 filers don’t have to
complete column (d).
Only Category 1 filers are required to complete Form
8865, Schedule L.
If you answered "Yes" to item H11 on page 1 of Form
8865, you do not have to complete Form 8865,
Schedule L.
Column (a). Use column (a) to report transactions
between the foreign partnership and the person filing the
Form 8865.
Column (d). Use column (d) to report transactions
between the foreign partnership and any U.S. person with
a 10% or more direct interest in the foreign partnership. If
such person also qualifies under column (b), don’t report
transactions between the foreign partnership and that
person under column (d). Report the transactions only
under column (b).
Lines 6 and 16. Enter distributions received from other
partnerships and distributions from the foreign partnership
for which this form is being completed.
Lines 20 and 21. Enter the largest outstanding balances
during the tax year of gross amounts borrowed from, and
gross amounts lent to, the related parties described in
columns (a) through (d). Don’t enter aggregate cash flows,
year-end loan balances, average balances, or net
balances. Don’t include open account balances resulting
from sales and purchases reported under other items
listed on Schedule N that arise and are collected in full in
the ordinary course of business.
Schedule L requires balance sheets prepared and
translated into U.S. dollars in accordance with U.S.
generally accepted accounting principles (GAAP).
Exception. Generally, if the partnership or any QBU of
the partnership uses the dollar approximate separate
transactions method (DASTM), Form 8865, Schedule L,
should reflect the tax balance sheets prepared and
translated into U.S. dollars according to Regulations
section 1.985-3(d).
Specific Instructions for Schedule L
For the specific instructions for Form 8865, Schedule L,
see the Instructions for Form 1065.
Schedule M-1. Reconciliation of
Income (Loss) per Books With
Income (Loss) per Return
Form 8865 filers aren’t required to complete Schedule M-3
(Form 1065), Net Income (Loss) Reconciliation for Certain
Partnerships.
Only Category 1 filers are required to complete Form
8865, Schedule M-1. If you answered "Yes" to item H11 on
18
Instructions for Form 8865 (2023)
(1)(i). For an exception for certain property generating
effectively connected income, see Regulations section
1.721(c)-3(b)(1)(ii).
Column (g). Enter the amount of gain, if any, recognized
on the transfer. See sections 721(b) and 904(f)(3), and
Regulations section 1.721(c)-2.
Line 3. Enter your capital interests, by percentage, in the
partnership immediately before and after the transfer. To
the extent your capital interest in the partnership
immediately before the transfer differs from any of your
profit, loss, or deduction interests in the partnership at that
time, enter in the supplemental information below your
interests, by percentage, in the profit, loss, and deductions
at that time. To the extent your capital interest in the
partnership immediately after the transfer differs from any
of your profit, loss, or deduction interests in the
Schedule O (Form 8865). Transfer of
Property to a Foreign Partnership
Category 3 filers must complete Schedule O.
Section 721(c) partnerships. Regulations section
1.721(c)-2 overrides section 721(a) nonrecognition of gain
upon a contribution of section 721(c) property to a section
721(c) partnership occurring on or after August 6, 2015. A
U.S. transferor must recognize gain unless the gain
deferral method described in Regulations section
1.721(c)-3 is applied. To satisfy the reporting requirements
of the gain deferral method, the U.S. transferor is required
to report certain information for the year of the contribution
and for subsequent years. See Regulations section
earlier.
partnership at that time, enter in the supplemental
information below your interests, by percentage, in the
profit, loss, and deductions at that time.
Supplemental information required to be reported.
Enter any information from Part I that is required to be
reported in greater detail. Identify the applicable column
number next to the information entered in this section. In
addition, if you contributed property to a foreign
partnership as part of a wider transaction, briefly describe
the entire transaction.
Reporting required for the year of contribution to
which the gain deferral method is applied.
Additionally, describe any section 721(c) property
contributed to a section 721(c) partnership and identify
whether the gain deferral method is applied. A U.S.
transferor must attach to Form 8865, for the year of
contribution, Schedule G, containing the information
described in Regulations section 1.721(c)-6(b)(2)(i). See
Regulations section 1.721(c)-6(b) for additional
requirements.
Additional form and statement requirements. In
addition to the reporting requirements above, the following
statements and forms must also be filed to satisfy the
requirements for the gain deferral method.
Reference ID number. Use the reference ID number
shown on Form 8865, item G2(b). For details, see Item
G2(b), earlier.
Part I. Transfers Reportable Under Section
6038B
Part I is used to report the transfer of property to a foreign
partnership in accordance with Regulations section
1.6038B-2(c). The completion of Part l (related property
transferred to the partnership) is required by Regulations
section 1.6038B-2(c). Provide the information required in
columns (a) through (g) for each contribution of property
to the foreign partnership that must be reported. If you
contributed property with an FMV greater than its tax
basis (appreciated property), or intangible property,
provide the information required in columns (a) through (g)
separately for each item of property transferred (except to
the extent you are allowed to aggregate the property
under Regulations sections 1.704-3(e)(2), (3), and (4)).
Provide a general description of each item of property
in the Supplemental Information Required To Be Reported
section. For all other property contributed, aggregate by
the categories listed in Part I.
Column (a). Enter the date of the transfer. If the transfer
was composed of a series of transactions over multiple
dates, enter the date the transfer was completed.
Schedule H (Form 8865), if certain events have
•
occurred.
Form 8838-P, Consent To Extend the Time To Assess
•
Tax Pursuant to the Gain Deferral Method (Section
721(c)). See Regulations sections 1.721(c)-6(b)(2)(ii), (b)
(3)(viii), and (b)(5) for more information.
Column (b). Enter the description of the property
transferred.
Copy of “Statement of Waiver of Treaty Benefits under
•
Section 1.721(c)-6,” if applicable. See Regulations section
1.721(c)-6(c)(1).
Column (c). Enter the FMV of the property contributed
(measured as of the date of the transfer).
Column (d). Enter your adjusted basis in the property
contributed on the date of the transfer. See sections 1011
through 1016 for more information on the determination of
adjusted basis.
Column (f). If you contributed appreciated property,
enter the method (traditional, traditional with curative
allocations, or remedial) used by the partnership to make
section 704(c) allocations for each item of property. See
Regulations sections 1.704-3(b), (c), and (d) for more
information on these allocation methods. If the gain
deferral method is applied, the remedial method must
generally be used. See Regulations section 1.721(c)-3(b)
Annual Reporting With Respect to the Gain
Deferral Method
A U.S. transferor subject to the gain deferral method must
annually attach Schedule G (Form 8865), containing the
information required in Regulations section 1.721(c)-6(b)
(3)(i) through (vii) (and (b)(3)(ix), as applicable). See
Regulations section 1.721(c)-6(b)(3) for further annual
reporting requirements pursuant to the gain deferral
method.
Instructions for Form 8865 (2023)
19
Part II. Dispositions Reportable Under Section
6038B
Column (g). Enter the amount of gain from column (e)
allocated to you.
Use Part II to report certain dispositions by a foreign
partnership in accordance with Regulations section
1.6038B-2(d). The completion of Part ll (related property
transferred to the partnership) is required by Regulations
section 1.6038B-2(d). If you were required to report a
transfer of appreciated property to the partnership, and
the partnership disposes of the property while you are still
a direct or constructive partner, you must report that
disposition in Part II. If the partnership disposes of the
property in a nonrecognition transaction and receives in
exchange substituted basis property, report the
Column (h). Enter the amount of depreciation recapture
from column (f) allocated to you. See Regulations sections
1.1245-1(e) and 1.1250-1(f). If you recognize any section
1254 recapture on the partnership's disposition of natural
resource recapture property, enter “See Attached” and
attach a statement figuring the amount of recapture. See
Regulations section 1.1254-5.
Part III. Gain Recognition Under Section 904(f)
(3) or (f)(5)(F)
If gain recognition was required for any transfer reported in
Part I under section 904(f)(3) or (f)(5)(F), attach a
statement identifying the transfer and the amount of gain
recognized.
subsequent disposition of the substituted basis property in
the same manner as provided for the contributed property.
See section 7701(a)(42) for the definition of substituted
basis property and Regulations section 1.704-3(a)(8) for
more information.
Schedule P (Form 8865).
Acquisitions, Dispositions, and
Changes of Interests in a Foreign
Partnership
A disposition by a partnership may be an acceleration
event for purposes of applying the gain deferral method.
The U.S. transferor may be required to recognize gain in
an amount equal to the remaining built-in gain on the
section 721(c) property previously contributed to the
section 721(c) partnership. See Regulations section
1.721(c)-4. For acceleration event exceptions, see
Regulations section 1.721(c)-5. Acceleration events and
exceptions to an acceleration event should be reflected on
Part II. In addition, Schedules G and H are required to be
filed.
Use Schedule P to report the acquisition, disposition, and
change of interest in a foreign partnership.
Every Category 4 filer must complete Schedule P,
unless they qualify under the exception for certain
Category 4 filers, described earlier.
Reference ID number. Use the reference ID number
shown on Form 8865, item G2(b). For details, see Item
G2(b), earlier.
Column (a). Provide a brief description of the property
disposed of by the partnership. If you are reporting the
disposition of substituted basis property received by the
partnership in a nonrecognition transaction in exchange
for appreciated property contributed by you, enter “See
Attached” and attach a statement providing brief
Part I. Acquisitions
Part I is completed by Category 4 filers required to report
an acquisition of an interest in a foreign partnership. See
Categories of Filers, earlier, for more details about which
types of acquisitions must be reported.
descriptions of both the property contributed by you to the
partnership and the substituted basis property received by
the partnership in exchange for that property.
An acquisition of a section 721(c) partnership interest
may be an acceleration event exception under the gain
deferral method. In such case, Schedule H is required to
be filed. See Regulations section 1.721(c)-5. In this case,
the acquirer may become a successor U.S. transferor and
may have a reporting requirement under Regulations
section 1.721(c)-6. As a result, the successor U.S.
transferor is required to file Schedule G as well as, if
certain events occur, Schedule H. See Section 721(c)
earlier.
Column (a). If you acquired the interest in the foreign
partnership by purchase, gift, or inheritance, or in a
distribution from a trust, estate, partnership, or
corporation, enter the name, address, and identifying
number (if any) of the person from whom you acquired the
interest.
Column (b). Enter the date that you transferred this
property to the partnership. If you are reporting the
disposition of substituted basis property received by the
partnership in a nonrecognition transaction in exchange
for property previously contributed by you, enter “See
Attached” and attach a statement showing both the date
you transferred the appreciated property to the
partnership and the date the partnership exchanged the
property for substituted basis property in a nonrecognition
transaction. See Regulations section 1.6038B-2.
Column (c). Enter the date that the partnership disposed
of the property.
Column (d). Briefly describe how the partnership
disposed of the property (for example, by sale or
exchange).
Column (e). Enter the amount of gain, if any, recognized
by the partnership on the disposition of property.
Column (b). Enter the date of the acquisition. If the
acquisition was composed of a series of transactions over
multiple dates, enter the date the acquisition was
completed.
Column (f). Enter the amount of depreciation recapture,
if any, recognized by the partnership on the disposition of
property. See Regulations sections 1.1245-1(e) and
1.1250-1(f).
Column (c). Enter the FMV of the interest you acquired
in the partnership (measured as of the date of acquisition).
20
Instructions for Form 8865 (2023)
Column (d). Enter your basis in the acquired partnership
interest (measured as of the date of acquisition). See
sections 722 and 742.
Column (d). Enter your adjusted basis in the partnership
interest disposed of immediately before the disposition.
See section 705.
Columns (e) and (f). Enter your total direct percentage
interest in the partnership both before and immediately
after the acquisition. To the extent your direct percentage
interest in the partnership differs among capital, profits,
losses, or deductions, enter “See Below” and state the
different percentages in Part IV.
Columns (e) and (f). Enter your total direct percentage
interest in the partnership both before and immediately
after the disposition. To the extent your percentage
interest in the partnership differs among capital, profits,
losses, or deductions, enter “See Below” and state the
different percentages in Part IV.
Part II. Dispositions
Part III. Change in Proportional Interest
This section is completed by U.S. persons who are
Category 4 filers because they disposed of an interest in a
more details about what types of dispositions must be
reported. For each disposition reported in Part II, indicate
in Part IV whether a statement is required by Regulations
section 1.751-1(a)(3) to be filed for the disposition.
This section is completed by U.S. persons who are
Category 4 filers because their direct proportional interest
in the foreign partnership changed. See Categories of
Filers, earlier, for more details about which changes in
proportional interest must be reported.
Column (a). Briefly describe the event that caused your
interest in the partnership to change (for example, the
admission of a new partner).
Column (b). Enter the date of the change. If the change
resulted from a series of transactions over multiple dates,
enter the date the change was completed.
A disposition of a section 721(c) partnership interest
may be an acceleration event for purposes of applying the
gain deferral method. The U.S. transferor may be required
to recognize gain in an amount equal to the remaining
built-in gain on the section 721(c) property previously
contributed to the section 721(c) partnership. In this case,
Schedule H must also be filed. See Regulations section
1.721(c)-4. For acceleration event exceptions, see
Regulations section 1.721(c)-5.
Column (a). Unless you disposed of the interest by
withdrawing, in whole or in part, from the partnership,
enter the name, address, and identifying number (if any)
of the person to whom you transferred the interest in the
foreign partnership.
Column (c). Enter the FMV of your interest in the
partnership immediately before the change.
Column (d). Enter your basis in your partnership interest
immediately before the change.
Columns (e) and (f). Enter your direct percentage
interest in the partnership both before and immediately
after the change. To the extent your percentage interest in
the partnership differs among capital, profits, losses, or
deductions, enter “See Below” and state the different
percentages in Part IV.
Column (b). Enter the date of the disposition. If the
disposition was composed of a series of transactions over
multiple dates, enter the date the disposition was
completed.
Part IV. Supplemental Information Required
To Be Reported
Enter any information asked for in Part I, Part II, or Part III
that must be reported in detail. Identify the applicable part
number and column next to the information entered in Part
IV.
Column (c). Enter the FMV of the interest you disposed
of in the partnership (measured as of the date of
disposition). If you recognized gain or loss on the
disposition, state the amount of gain or loss in Part IV. See
section 741.
Privacy Act and Paperwork Reduction Act Notice. We ask for the information on this form and its schedules to carry
out the Internal Revenue laws of the United States. We need this information to ensure that you are complying with the
revenue laws and to allow us to figure and collect the right amount of tax. Sections 6038, 6038B, 6038D, and 6046A
require you to provide this information. Section 6038D requires specified individuals and, upon issuance of regulations,
specified domestic entities to report specified foreign financial assets in which they have an interest. Form 8938 is
generally used to comply with this reporting requirement, but if you checked the box on Form 8865, item E, you're
choosing to use Form 8865 (in conjunction with Form 8938) to report your interests. Section 6109 requires you to provide
your identification number. Failure to provide all of the requested information in a timely manner or providing false
information may subject you to penalties.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act
unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be
retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by section 6103. However, section 6103 allows or requires the
IRS to disclose or give such information to the Department of Justice for civil and criminal litigation, and to cities, states,
the District of Columbia, and U.S. commonwealths and territories for use in administering their tax laws. We may also
disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax
criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism.
Instructions for Form 8865 (2023)
21
The time needed to complete and file this form and related schedules will vary depending on individual circumstances.
The estimated burden for individual and business taxpayers filing this form is approved under OMB control number
1545-0074 and 1545-0123 and is included in the estimates shown in the instructions for their individual and business
income tax return. The estimated burden for all other taxpayers who file this form is shown below.
Learning about the law
or the form
Preparing, copying, assembling,
and sending the form to the IRS
Form
Recordkeeping
8865
39 hr., 30 min.
13 hr., 52 min.
7 hr., 53 min.
12 hr., 12 min.
170 hr., 16 min.
171 hr., 13 min.
16 hr., 15 min.
5 hr., 44 min.
6 hr., 47 min.
3 hr., 34 min.
2 hr., 17 min.
7 hr., 31 min.
34 hr., 28 min.
35 hr., 33 min.
5 hr., 10 min.
1 hr., 12 min.
14 hr., 21 min.
3 hr., 57 min.
2 hr., 30 min.
9 hr., 14 min.
50 hr., 44 min.
51 hr., 53 min.
5 hr., 39 min.
1 hr., 20 min.
Schedule G (Form 8865)
Schedule H (Form 8865)
Schedule K-1 (Form 8865)
Schedule K-2 (Form 8865)
Schedule K-3 (Form 8865)
Schedule O (Form 8865)
Schedule P (Form 8865)
If you have comments concerning the accuracy of these time estimates or suggestions for making this form and
related schedules simpler, we would be happy to hear from you. You can send us comments through IRS.gov/
FormComments. Or you can send your comments to the Internal Revenue Service, Tax Forms and Publications, 1111
Constitution Ave. NW, IR-6526, Washington, DC 20224. Do not send Form 8865 to this address. Instead, see When and
List of Codes Used for Schedule K-1 (Form 8865)
Box Number / Item
Where to report or where to find further reporting information.
1. Ordinary business income (loss). Determine whether the income (loss)
is passive or nonpassive and enter on your return as follows.
Passive loss
See Partner’s Instr. (Form 1065)
Passive income
Schedule E (Form 1040), line 28, column (h)
See Partner’s Instr. (Form 1065)
Nonpassive loss
Nonpassive income
Schedule E (Form 1040), line 28, column (k)
See Partner’s Instr. (Form 1065)
2. Net rental real estate income (loss)
3. Other net rental income (loss)
Net income
Schedule E (Form 1040), line 28, column (h)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Form 1040 or 1040-SR, line 2b
Net loss
4a. Guaranteed payment services
4b. Guaranteed payment capital
4c. Guaranteed payment total
5. Interest income
6a. Ordinary dividends
Form 1040 or 1040-SR, line 3b
6b. Qualified dividends
Form 1040 or 1040-SR, line 3a
6c. Dividend equivalents
7. Royalties
See Partner’s Instr. (Form 1065)
Schedule E (Form 1040), line 4
8. Net short-term capital gain (loss)
9a. Net long-term capital gain (loss)
9b. Collectibles (28%) gain (loss)
9c. Unrecaptured section 1250 gain
10. Net section 1231 gain (loss)
11. Other income (loss)
Code A. Other portfolio income (loss)
Code B. Involuntary conversions
Schedule D (Form 1040), line 5
Schedule D (Form 1040), line 12
28% Rate Gain Worksheet, line 4 (Schedule D instructions)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
22
Instructions for Form 8865 (2023)
Box Number / Item
Code C. Section 1256 contracts & straddles
Where to report or where to find further reporting information.
Form 6781, line 1
Code D. Mining exploration costs recapture
Code E. Cancellation of debt
See Pub. 535
Schedule 1 (Form 1040), line 8c; or Form 982
See Partner’s Instr. (Form 1065)
Code F. Section 743(b) positive income adjustments
Code G. Reserved for future use
Code H. Section 951 income inclusions
Code I. Gain (loss) from disposition of oil, gas, thermal, or other
mineral properties (section 59(e))
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Code J. Recoveries of tax benefit items
Code K. Gambling gains and losses
Code L. Any income, gain, or loss to the partnership from a
distribution under section 751(b) (certain distributions treated as
sales or exchanges)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Code M. Gain eligible for section 1045 rollover (replacement stock
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
purchased by partnership)
Code N. Gain eligible for section 1045 rollover (replacement stock
not purchased by partnership)
Code O. Sale or exchange of QSB stock with section 1202 exclusion See Partner’s Instr. (Form 1065)
Code P. Gain or loss on disposition of farm recapture property and
other items to which section 1252 applies
See Partner’s Instr. (Form 1065)
Code Q. Gain or loss on Fannie Mae or Freddie Mac qualified
preferred stock
See Partner’s Instr. (Form 1065)
Code R. Specially allocated ordinary gain (loss)
Code S. Non-portfolio capital gain (loss)
Codes T through X. Reserved for future use
Code ZZ. Other
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
12. Section 179 deduction
13. Other deductions
Code A. Cash contributions (60%)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Form 4952, line 1
Code B. Cash contributions (30%)
Code C. Noncash contributions (50%)
Code D. Noncash contributions (30%)
Code E. Capital gain property to a 50% organization (30%)
Code F. Capital gain property (20%)
Code G. Contributions (100%)
Code H. Investment interest expense
Code I. Deductions—royalty income
Schedule E (Form 1040), line 19
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Schedule A (Form 1040), line 16
Schedule A (Form 1040), line 1; or Schedule 1 (Form 1040), line 17
See Partner’s Instr. (Form 1065)
Form 2441, line 12
Code J. Section 59(e)(2) expenditures
Code K. Excess business interest expense
Code L. Deductions—portfolio (other)
Code M. Amounts paid for medical insurance
Code N. Educational assistance benefits
Code O. Dependent care benefits
Code P. Preproductive period expenses
Code Q. Reserved for future use
See Partner’s Instr. (Form 1065)
Code R. Pensions and IRAs
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Code S. Reforestation expense deduction
Codes T through U. Reserved for future use
Code V. Section 743(b) negative income adjustments
Code W. Soil and water conservation
Code X. Film, television, and theatrical production expenditures
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Instructions for Form 8865 (2023)
23
Box Number / Item
Code Y. Expenditures for removal of barriers
Where to report or where to find further reporting information.
See Partner’s Instr. (Form 1065)
Code Z. Itemized deductions
See Partner’s Instr. (Form 1065)
Code AA. Contributions to a capital construction fund (CCF)
Code AB. Penalty on early withdrawal of savings
Code AC. Interest expense allocated to debt-financed distributions
Code AD. Interest expense on working interest in oil or gas
Code AE. Deductions—portfolio income
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Codes AF through AJ. Reserved for future use
Code ZZ. Other
See Partner’s Instr. (Form 1065)
14. Self-employment earnings (loss)
Note. If you have a section 179 deduction or any partner-level
deductions, see the Partner’s Instr. (Form 1065) before completing
Schedule SE (Form 1040).
Code A. Net earnings (loss) from self-employment
Code B. Gross farming or fishing income
Code C. Gross non-farm income
Schedule SE, Section A or B
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
15. Credits
Code A. Reserved for future use
Code B. Reserved for future use
Code C. Low-income housing credit (section 42(j)(5)) from
post-2007 buildings
See Partner’s Instr. (Form 1065)
Code D. Low-income housing credit (other) from post-2007 buildings See Partner’s Instr. (Form 1065)
Code E. Qualified rehabilitation expenditures (rental real estate)
Code F. Other rental real estate credits
Code G. Other rental credits
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Code H. Undistributed capital gains credit
Code I. Biofuel producer credit
Code J. Work opportunity credit
Code K. Disabled access credit
Code L. Empowerment zone employment credit
Code M. Credit for increasing research activities
Code N. Credit for employer social security and Medicare taxes
Code O. Backup withholding
Code P. Unused investment credit from the qualifying advanced coal See Partner’s Instr. (Form 1065)
project credit or qualifying gasification project credit allocated from
cooperatives
Code Q. Unused investment credit from the qualifying advanced
energy project credit allocated from cooperatives
See Partner’s Instr. (Form 1065)
Code R. Unused investment credit from the advanced
manufacturing investment credit allocated from cooperatives
See Partner’s Instr. (Form 1065)
Code S. Reserved for future use
Code T. Unused investment credit from the energy credit allocated
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
from cooperatives
Code U. Unused investment credit from the rehabilitation credit
allocated from cooperatives
Code V. Advanced manufacturing production credit
Codes W and X. Reserved for future use
Code Y. Clean hydrogen production credit
Code Z. Orphan drug credit
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Code AA. Enhanced oil recovery credit
Code AB. Renewable electricity production credit
Code AC. Biodiesel, renewable diesel, or sustainable aviation fuels See Partner’s Instr. (Form 1065)
credit
Code AD. New markets credit
See Partner’s Instr. (Form 1065)
24
Instructions for Form 8865 (2023)
Box Number / Item
Code AE. Credit for small employer pension plan startup costs
Code AF. Credit for small employer auto-enrollment
Where to report or where to find further reporting information.
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Code AG. Credit for small employer military spouse retirement plan See Partner’s Instr. (Form 1065)
eligibility
Code AH. Credit for employer-provided childcare facilities and
services
See Partner’s Instr. (Form 1065)
Code AI. Low sulfur diesel fuel production credit
Code AJ. Qualified railroad track maintenance credit
Code AK. Credit for oil and gas production from marginal wells
Code AL. Distilled spirits credit
Code AM. Energy efficient home credit
Code AN. Alternative motor vehicle credit
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Code AO. Alternative fuel vehicle refueling property credit
Code AP. Clean renewable energy bond credit
Code AQ. New clean renewable energy bond credit
Code AR. Qualified energy conservation bond credit
Code AS. Qualified zone academy bond credit
Code AT. Qualified school construction bond credit
Code AU. Build America bond credit
Code AV. Credit for employer differential wage payments
Code AW. Carbon oxide sequestration credit
Code AX. Carbon oxide sequestration credit recapture
Code AY. New clean vehicle credit
Code AZ. Qualified commercial clean vehicle credit
Code BA. Credit for small employer health insurance premiums
Code BB. Employer credit for paid family and medical leave
Code BC. Eligible credits from transferor(s) under section 6418
Codes BD through BG. Reserved for future use
Code ZZ. Other
See Partner’s Instr. (Form 1065)
17. Alternative minimum tax (AMT) items
Code A. Post-1986 depreciation adjustment
Code B. Adjusted gain or loss
See Partner’s Instr. (Form 1065) and the Instructions for Form 6251
See Partner’s Instr. (Form 1065) and the Instructions for Form 6251
See Partner’s Instr. (Form 1065) and the Instructions for Form 6251
See Partner’s Instr. (Form 1065) and the Instructions for Form 6251
See Partner’s Instr. (Form 1065) and the Instructions for Form 6251
See Partner’s Instr. (Form 1065) and the Instructions for Form 6251
Code C. Depletion (other than oil & gas)
Code D. Oil, gas, and geothermal—gross income
Code E. Oil, gas, and geothermal—deductions
Code F. Other AMT items
18. Tax-exempt income and nondeductible expenses
Code A. Tax-exempt interest income
Code B. Other tax-exempt income
Code C. Nondeductible expenses
19. Distributions
Form 1040, line 2a
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Code A. Cash and marketable securities
Code B. Distribution subject to section 737
Code C. Other property
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
20. Other information
Code A. Investment income
Form 4952, line 4a
Form 4952, line 5
Form 4136
Code B. Investment expenses
Code C. Fuel tax credit information
Code D. Qualified rehabilitation expenditures (other than rental real See Partner’s Instr. (Form 1065)
estate)
Code E. Basis of energy property
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Form 4255
Codes F through G. Recapture of low-income housing credit
Code H. Recapture of investment credit
Instructions for Form 8865 (2023)
25
Box Number / Item
Code I. Recapture of other credits
Where to report or where to find further reporting information.
See Partner’s Instr. (Form 1065)
See Form 8697
Code J. Look-back interest—completed long-term contracts
Code K. Look-back interest—income forecast method
Code L. Dispositions of property with section 179 deductions
Code M. Recapture of section 179 deduction
See Form 8866
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Code N. Business interest expense (information item)
Code O. Section 453(I)(3) information
Code P. Section 453A(c) information
Code Q. Section 1260(b) information
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Code R. Interest allocable to production expenditures
Code S. Capital construction fund (CCF) nonqualified withdrawals
Code T. Depletion information—oil and gas
Code U. Section 743(b) basis adjustment
Code V. Unrelated business taxable income
Code X. Reserved for future use
Code Y. Net investment income
Code Z. Section 199A information
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Code AA. Section 704(c) information
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Code AB. Section 751 gain (loss)
Code AC. Section 1(h)(5) gain (loss)
Code AD. Deemed section 1250 unrecaptured gain
Code AE. Excess taxable income
Code AF. Excess business interest income
Code AG. Gross receipts for section 448(c) (information item)
Code AH. Noncash charitable contributions
Code AI. Interest and tax on deferred compensation to partners
Code AJ. Excess business loss limitation
Code AK. Gain from mark-to-market election
Code AL. Section 721(c) partnership
Code AM. Section 1061 information
Code AN. Farming and fishing business
Code AO. PTP information
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Code AP. Inversion gain
Code AQ. Conservation reserve program payments
Code AR. IRA disclosure
Code AS. Qualifying advanced coal project property and qualifying See Partner’s Instr. (Form 1065)
gasification project property
Code AT. Qualifying advanced energy project property
Code AU. Advanced manufacturing investment property
Code AV. Reserved for future use
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
Code AW. Reportable transactions
Code AX. Reserved for future use
Code AY. Foreign partners, Form 8990, Schedule A
Codes AZ through BD. Reserved for future use
Code ZZ. Other
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
26
Instructions for Form 8865 (2023)
Using the list of activities and codes below,
determine from which activity the business derives
the largest percentage of its “total receipts.” Total
receipts is defined as the sum of gross receipts or
sales (Schedule B, line 1a); all other income
purchases raw materials and supplies them to a
subcontractor to produce the finished product, but
retains title to the product, the business is
Codes for Principal Business Activity
and Principal Product or Service
This list of Principal Business Activities and their
associated codes is designed to classify an
enterprise by the type of activity in which it is
engaged to facilitate the administration of the
Internal Revenue Code. These Principal Business
Activity Codes are based on the North American
Industry Classification System.
considered a manufacturer and must use one of
the manufacturing codes (311110–339900).
reported on Schedule B, lines 4 through 7; income
reported on Schedule K, lines 3a, 5, 6a, and 7;
income or net gain reported on Schedule K, lines
8, 9a, 10, and 11; and income or net gain reported
on Form 8825, lines 2, 19, and 20a. If the business
Once the Principal Business Activity is
determined, enter the six-digit code from the list
below on page 1, item H7. Also enter a brief
description of the business activity in item H8.
237210 Land Subdivision
Paper Manufacturing
333310 Commercial & Service
Agriculture, Forestry, Fishing,
and Hunting
Industry Machinery Mfg
237310 Highway, Street, & Bridge
322100 Pulp, Paper, & Paperboard
Construction
Mills
333410 Ventilation, Heating,
Air-Conditioning, &
237990 Other Heavy & Civil
322200 Converted Paper Product Mfg
Crop Production
Commercial Refrigeration
Equipment Mfg
Engineering Construction
Printing and Related Support
111100 Oilseed & Grain Farming
Specialty Trade Contractors
Activities
111210 Vegetable & Melon Farming
333510 Metalworking Machinery Mfg
238100 Foundation, Structure, &
Building Exterior Contractors
(including framing carpentry,
masonry, glass, roofing, &
siding)
323100 Printing & Related Support
Activities
(including potatoes & yams)
333610 Engine, Turbine & Power
111300 Fruit & Tree Nut Farming
Transmission Equipment Mfg
Petroleum and Coal Products
111400 Greenhouse, Nursery, &
333900 Other General Purpose
Machinery Mfg
Manufacturing
Floriculture Production
324110 Petroleum Refineries
(including integrated)
111900 Other Crop Farming
(including tobacco, cotton,
sugarcane, hay, peanut,
sugar beet, & all other crop
farming)
238210 Electrical Contractors
Computer and Electronic Product
Manufacturing
238220 Plumbing, Heating, &
324120 Asphalt Paving, Roofing, &
Air-Conditioning Contractors
334110 Computer & Peripheral
Equipment Mfg
Saturated Materials Mfg
238290 Other Building Equipment
Contractors
324190 Other Petroleum & Coal
Products Mfg
334200 Communications Equipment
Animal Production
Mfg
238300 Building Finishing
Contractors (including
drywall, insulation, painting,
wallcovering, flooring, tile, &
finish carpentry)
Chemical Manufacturing
112111 Beef Cattle Ranching &
334310 Audio & Video Equipment
Mfg
Farming
325100 Basic Chemical Mfg
112112 Cattle Feedlots
325200 Resin, Synthetic Rubber, &
Artificial & Synthetic Fibers &
Filaments Mfg
334410 Semiconductor & Other
112120 Dairy Cattle & Milk Production
112210 Hog & Pig Farming
Electronic Component Mfg
238900 Other Specialty Trade
Contractors (including site
preparation)
Manufacturing
334500 Navigational, Measuring,
Electromedical, & Control
Instruments Mfg
325300 Pesticide, Fertilizer, & Other
112300 Poultry & Egg Production
112400 Sheep & Goat Farming
Agricultural Chemical Mfg
325410 Pharmaceutical & Medicine
Mfg
334610 Manufacturing & Reproducing
112510 Aquaculture (including
shellfish & finfish farms &
hatcheries)
Magnetic & Optical Media
Food Manufacturing
325500 Paint, Coating, & Adhesive
Electrical Equipment, Appliance,
and Component Manufacturing
Mfg
311110 Animal Food Mfg
311200 Grain & Oilseed Milling
112900 Other Animal Production
Forestry and Logging
325600 Soap, Cleaning Compound, &
Toilet Preparation Mfg
335100 Electric Lighting Equipment
311300 Sugar & Confectionery
Mfg
113110 Timber Tract Operations
325900 Other Chemical Product &
Product Mfg
335200 Household Appliance Mfg
335310 Electrical Equipment Mfg
113210 Forest Nurseries & Gathering
Preparation Mfg
311400 Fruit & Vegetable Preserving
& Specialty Food Mfg
of Forest Products
Plastics and Rubber Products
Manufacturing
335900 Other Electrical Equipment &
113310 Logging
311500 Dairy Product Mfg
Component Mfg
Fishing, Hunting, and Trapping
114110 Fishing
326100 Plastics Product Mfg
326200 Rubber Product Mfg
311610 Animal Slaughtering and
Transportation Equipment
Manufacturing
Processing
114210 Hunting & Trapping
Nonmetallic Mineral Product
311710 Seafood Product Preparation
& Packaging
336100 Motor Vehicle Mfg
Manufacturing
Support Activities for Agriculture
336210 Motor Vehicle Body & Trailer
and Forestry
327100 Clay Product & Refractory
Mfg
311800 Bakeries, Tortilla & Dry Pasta
Mfg
Mfg
115110 Support Activities for Crop
Production (including cotton
ginning, soil preparation,
336300 Motor Vehicle Parts Mfg
327210 Glass & Glass Product Mfg
311900 Other Food Mfg (including
coffee, tea, flavorings, &
seasonings)
336410 Aerospace Product & Parts
327300 Cement & Concrete Product
Mfg
planting, & cultivating)
Mfg
336510 Railroad Rolling Stock Mfg
336610 Ship & Boat Building
115210 Support Activities for Animal
Production (including
Farriers)
Beverage and Tobacco Product
327400 Lime & Gypsum Product Mfg
Manufacturing
327900 Other Nonmetallic Mineral
336990 Other Transportation
312110 Soft Drink & Ice Mfg
312120 Breweries
Product Mfg
115310 Support Activities for Forestry
Equipment Mfg
Primary Metal Manufacturing
Furniture and Related Product
Manufacturing
Mining
312130 Wineries
331110 Iron & Steel Mills & Ferroalloy
Mfg
312140 Distilleries
211120 Crude Petroleum Extraction
211130 Natural Gas Extraction
212110 Coal Mining
337000 Furniture & Related Product
331200 Steel Product Mfg From
Purchased Steel
312200 Tobacco Manufacturing
Manufacturing
Textile Mills and Textile Product
Miscellaneous Manufacturing
331310 Alumina & Aluminum
Mills
212200 Metal Ore Mining
339110 Medical Equipment &
Production & Processing
313000 Textile Mills
Supplies Mfg
212310 Stone Mining & Quarrying
331400 Nonferrous Metal (except
Aluminum) Production &
Processing
314000 Textile Product Mills
Apparel Manufacturing
315100 Apparel Knitting Mills
339900 Other Miscellaneous
Manufacturing
212320 Sand, Gravel, Clay, &
Ceramic & Refractory
Minerals Mining & Quarrying
331500 Foundries
Wholesale Trade
212390 Other Nonmetallic Mineral
315210 Cut & Sew Apparel
Fabricated Metal Product
Merchant Wholesalers, Durable
Mining & Quarrying
Contractors
Manufacturing
Goods
213110 Support Activities for Mining
315250 Cut & Sew Apparel Mfg
(except Contractors)
332110 Forging & Stamping
423100 Motor Vehicle & Motor Vehicle
Parts & Supplies
332210 Cutlery & Handtool Mfg
Utilities
315990 Apparel Accessories & Other
332300 Architectural & Structural
423200 Furniture & Home Furnishings
221100 Electric Power Generation,
Apparel Mfg
Metals Mfg
Transmission, & Distribution
423300 Lumber & Other Construction
Leather and Allied Product
Manufacturing
332400 Boiler, Tank, & Shipping
Container Mfg
Materials
221210 Natural Gas Distribution
423400 Professional & Commercial
Equipment & Supplies
221300 Water, Sewage, & Other
316110 Leather & Hide Tanning &
332510 Hardware Mfg
Systems
Finishing
332610 Spring & Wire Product Mfg
423500 Metal & Mineral (except
221500 Combination Gas & Electric
Construction
316210 Footwear Mfg (including
rubber & plastics)
Petroleum)
332700 Machine Shops; Turned
Product; & Screw, Nut, & Bolt
Mfg
423600 Household Appliances &
Electrical & Electronic Goods
316990 Other Leather & Allied
Construction of Buildings
Product Mfg
332810 Coating, Engraving, Heat
423700 Hardware, & Plumbing &
Heating Equipment &
Supplies
236110 Residential Building
Wood Product Manufacturing
Treating, & Allied Activities
Construction
321110 Sawmills & Wood
332900 Other Fabricated Metal
Product Mfg
236200 Nonresidential Building
Construction
Preservation
423800 Machinery, Equipment, &
321210 Veneer, Plywood, &
Engineered Wood Product
Mfg
Supplies
Machinery Manufacturing
Heavy and Civil Engineering
423910 Sporting & Recreational
Goods & Supplies
333100 Agriculture, Construction, &
Construction
Mining Machinery Mfg
237100 Utility System Construction
321900 Other Wood Product Mfg
333200 Industrial Machinery Mfg
27
Codes for Principal Business Activity and Principal Product or Service (Continued)
423920 Toy & Hobby Goods &
Supplies
Health and Personal Care Retailers
Scenic & Sightseeing
Transportation
Activities Related to Credit
Intermediation
456110 Pharmacies & Drug Retailers
423930 Recyclable Materials
487000 Scenic & Sightseeing
522300 Activities Related to Credit
Intermediation (including loan
brokers, check clearing, &
money transmitting)
456120 Cosmetics, Beauty Supplies,
Transportation
423940 Jewelry, Watch, Precious
& Perfume Retailers
Stone, & Precious Metals
Support Activities for
Transportation
456130 Optical Goods Retailers
423990 Other Miscellaneous Durable
Goods
446190 Other Health & Personal Care
Securities, Commodity Contracts,
and Other Financial Investments
and Related Activities
488100 Support Activities for Air
Retailers
Transportation
Merchant Wholesalers, Nondurable
Gasoline Stations & Fuel Dealers
Goods
488210 Support Activities for Rail
Transportation
457100 Gasoline Stations (including
523150 Investment Banking &
424100 Paper & Paper Products
convenience stores with gas)
Securities Intermediation
488300 Support Activities for Water
424210 Drugs & Druggists' Sundries
457210 Fuel Dealers (including
Heating Oil & Liquefied
Petroleum)
523160 Commodity Contracts
Intermediation
Transportation
424300 Apparel, Piece Goods, &
488410 Motor Vehicle Towing
Notions
523210 Securities & Commodity
488490 Other Support Activities for
424400 Grocery & Related Products
424500 Farm Product Raw Materials
424600 Chemical & Allied Products
Clothing & Accessories Retailers
Exchanges
Road Transportation
458110 Clothing & Clothing
523900 Other Financial Investment
Activities (including portfolio
management & investment
advice)
488510 Freight Transportation
Arrangement
Accessories Retailers
458210 Shoe Retailers
424700 Petroleum & Petroleum
488990 Other Support Activities for
Products
458310 Jewelry Retailers
Transportation
Insurance Carriers and Related
424800 Beer, Wine, & Distilled
Alcoholic Beverages
458320 Luggage & Leather Goods
Couriers and Messengers
Activities
Retailers
492110 Couriers & Express Delivery
524110 Direct Life, Health, & Medical
Insurance Carriers
424910 Farm Supplies
Sporting, Hobby, Book, Musical
Instrument, & Miscellaneous
Retailers
Services
424920 Book, Periodical, &
492210 Local Messengers & Local
Delivery
524120 Direct Insurance (except Life,
Newspapers
Health, & Medical) Carriers
459110 Sporting Goods Retailers
424930 Flower, Nursery Stock, &
Florists' Supplies
Warehousing and Storage
524210 Insurance Agencies &
Brokerages
459120 Hobby, Toy, & Game Retailers
493100 Warehousing & Storage
424940 Tobacco Products &
459130 Sewing, Needlework, & Piece
(except lessors of
524290 Other Insurance Related
Electronic Cigarettes
Goods Retailers
mini-warehouses &
Activities (including
424950 Paint, Varnish, & Supplies
459140 Musical Instrument &
Supplies Retailers
self-storage units)
third-party administration of
insurance and pension funds)
424990 Other Miscellaneous
Information
Nondurable Goods
459210 Book Retailers & News
Funds, Trusts, and Other Financial
Dealers (including
Motion Picture and Sound
Wholesale Trade Agents & Agents
and Brokers
Vehicles
newsstands)
Recording Industries
525100 Insurance & Employee
Benefit Funds
459310 Florists
512100 Motion Picture & Video
Industries (except video
rental)
425120 Wholesale Trade Agents &
Brokers
459410 Office Supplies & Stationery
525910 Open-End Investment Funds
Retailers
(Form 1120-RIC,)
Retail Trade
Motor Vehicle and Parts Dealers
441110 New Car Dealers
512200 Sound Recording Industries
Publishing Industries
459420 Gift, Novelty, & Souvenir
Retailers
525920 Trusts, Estates, & Agency
Accounts
459510 Used Merchandise Retailers
459910 Pet & Pet Supplies Retailers
459920 Art Dealers
513110 Newspaper Publishers
513120 Periodical Publishers
513130 Book Publishers
525990 Other Financial Vehicles
(including mortgage REITs
and closed-end investment
funds)
441120 Used Car Dealers
441210 Recreational Vehicle Dealers
441222 Boat Dealers
459930 Manufactured (Mobile) Home
513140 Directory & Mailing List
“Offices of Bank Holding Companies”
and “Offices of Other Holding
Companies” are located under
Management of Companies
(Holding Companies) below.
Dealers
Publishers
441227 Motorcycle, ATV, & All Other
Motor Vehicle Dealers
459990 All Other Miscellaneous
Retailers (including tobacco,
candle, & trophy retailers)
513190 Other Publishers
441300 Automotive Parts,
Accessories, & Tire Retailers
513210 Software Publishers
Broadcasting & Content Providers
Nonstore Retailers
Building Material and Garden
& Telecommunications
Real Estate and Rental and
Leasing
Equipment and Supplies Dealers
Nonstore retailers sell all
types of merchandise using
such methods as Internet,
mail-order catalogs,
516100 Radio & Television
Broadcasting Stations
444110 Home Centers
444120 Paint & Wallpaper Stores
444140 Hardware Retailers
516210 Media Streaming, Social
Networks, & Other Content
Providers
Real Estate
interactive television, or direct
sales. These types of
531110 Lessors of Residential
444180 Other Building Material
Buildings & Dwellings
Retailers should select the
PBA associated with their
primary line of products sold.
For example, establishments
primarily selling prescription
and non-prescription drugs,
select PBA code 456110
Pharmacies & Drug Retailers.
517000 Telecommunications
(including Wired, Wireless,
Satellite, Cable & Other
Program Distribution,
Dealers
(including equity REITs)
444200 Lawn & Garden Equipment &
Supplies Retailers
531120 Lessors of Nonresidential
Buildings (except
Mini-Warehouses) (including
equity REITs)
Food and Beverage Retailers
Resellers, Agents, Other
Telecommunications, &
Internet Service Providers)
445110 Supermarkets and Other
531130 Lessors of Mini-Warehouses
Grocery (except
& Self-Storage Units
Convenience) Retailers
Data Processing, Web Search
Portals, & Other Information
Services
(including equity REITs)
445131 Convenience Retailers
445132 Vending Machine Operators
445230 Fruit & Vegetable Retailers
445240 Meat Retailers
Transportation and
Warehousing
531190 Lessors of Other Real Estate
Property (including equity
REITs)
518210 Computing Infrastructure
Providers, Data Processing,
Web Hosting, & Related
Services
Air, Rail, and Water Transportation
481000 Air Transportation
482110 Rail Transportation
483000 Water Transportation
Truck Transportation
531210 Offices of Real Estate Agents
445250 Fish & Seafood Retailers
445291 Baked Goods Retailers
445292 Confectionery & Nut Retailers
& Brokers
531310 Real Estate Property
Managers
519200 Web Search Portals,
Libraries, Archives, & Other
Info. Services
Finance and Insurance
531320 Offices of Real Estate
445298 All Other Specialty Food
Appraisers
Retailers
484110 General Freight Trucking,
Local
531390 Other Activities Related to
Real Estate
445320 Beer, Wine, & Liquor
Retailers
Depository Credit Intermediation
522110 Commercial Banking
522130 Credit Unions
484120 General Freight Trucking,
Long-Distance
Rental and Leasing Services
Furniture and Home Furnishings
Retailers
484200 Specialized Freight Trucking
532100 Automotive Equipment Rental
& Leasing
522180 Savings Institutions & Other
449110 Furniture Retailers
Transit and Ground Passenger
Depository Credit
Transportation
532210 Consumer Electronics &
Appliances Rental
449121 Floor Covering Retailers
449122 Window Treatment Retailers
Intermediation
485110 Urban Transit Systems
Nondepository Credit
532281 Formal Wear & Costume
485210 Interurban & Rural Bus
449129 All Other Home Furnishings
Intermediation
Rental
Transportation
Retailers
522210 Credit Card Issuing
522220 Sales Financing
522291 Consumer Lending
532282 Video Tape & Disc Rental
485310 Taxi Service
Electronics and Appliance Retailers
532283 Home Health Equipment
485320 Limousine Service
449210 Electronics & Appliance
Rental
Retailers (including
485410 School & Employee Bus
532284 Recreational Goods Rental
522292 Real Estate Credit (including
computers)
Transportation
mortgage bankers &
532289 All Other Consumer Goods
General Merchandise Retailers
485510 Charter Bus Industry
originators)
Rental
455110 Department Stores
485990 Other Transit & Ground
522299 Intl, Secondary Market, &
Other Nondepo. Credit
Intermediation
532310 General Rental Centers
Passenger Transportation
455210 Warehouse Clubs,
Supercenters, & Other Merch
Retailers
532400 Commercial & Industrial
Machinery & Equipment
Rental & Leasing
Pipeline Transportation
486000 Pipeline Transportation
28
Codes for Principal Business Activity and Principal Product or Service (Continued)
Lessors of Nonfinancial Intangible
Assets (except copyrighted works)
561210 Facilities Support Services
561300 Employment Services
Home Health Care Services
Other Services
621610 Home Health Care Services
Repair and Maintenance
533110 Lessors of Nonfinancial
Intangible Assets (except
copyrighted works)
561410 Document Preparation
Other Ambulatory Health Care
811110 Automotive Mechanical &
Services
561420 Telephone Call Centers
Services
Electrical Repair &
621900 Other Ambulatory Health
Care Services (including
ambulance services & blood
& organ banks)
Maintenance
Professional, Scientific, and
Technical Services
561430 Business Service Centers
(including private mail centers
& copy shops)
811120 Automotive Body, Paint,
Interior, & Glass Repair
811190 Other Automotive Repair &
Maintenance (including oil
change & lubrication shops &
car washes)
Hospitals
Legal Services
561440 Collection Agencies
561450 Credit Bureaus
622000 Hospitals
541110 Offices of Lawyers
541190 Other Legal Services
Nursing and Residential Care
561490 Other Business Support
Facilities
Services (including
Accounting, Tax Preparation,
811210 Electronic & Precision
Equipment Repair &
Maintenance
repossession services, court
reporting, & stenotype
services)
623000 Nursing & Residential Care
Facilities
Bookkeeping, and Payroll Services
541211 Offices of Certified Public
Social Assistance
Accountants
811310 Commercial & Industrial
Machinery & Equipment
(except Automotive &
Electronic) Repair &
561500 Travel Arrangement &
624100 Individual & Family Services
541213 Tax Preparation Services
541214 Payroll Services
Reservation Services
624200 Community Food & Housing,
& Emergency & Other Relief
Services
561600 Investigation & Security
Services
541219 Other Accounting Services
Maintenance
Architectural, Engineering, and
811410 Home & Garden Equipment &
561710 Exterminating & Pest Control
624310 Vocational Rehabilitation
Related Services
Appliance Repair &
Services
Services
Maintenance
541310 Architectural Services
561720 Janitorial Services
624410 Childcare Services
Arts, Entertainment, and
Recreation
811420 Reupholstery & Furniture
541320 Landscape Architecture
561730 Landscaping Services
Repair
Services
561740 Carpet & Upholstery Cleaning
811430 Footwear & Leather Goods
Repair
541330 Engineering Services
541340 Drafting Services
Services
561790 Other Services to Buildings &
Dwellings
Performing Arts, Spectator Sports,
811490 Other Personal & Household
541350 Building Inspection Services
and Related Industries
Goods Repair & Maintenance
541360 Geophysical Surveying &
561900 Other Support Services
(including packaging &
labeling services, &
711100 Performing Arts Companies
Personal and Laundry Services
812111 Barber Shops
Mapping Services
711210 Spectator Sports (including
541370 Surveying & Mapping (except
Geophysical) Services
sports clubs & racetracks)
convention & trade show
organizers)
812112 Beauty Salons
812113 Nail Salons
711300 Promoters of Performing Arts,
Sports, & Similar Events
541380 Testing Laboratories &
Waste Management and
Services
812190 Other Personal Care Services
711410 Agents & Managers for
Artists, Athletes, Entertainers,
& Other Public Figures
Remediation Services
(including diet & weight
Specialized Design Services
562000 Waste Management &
Remediation Services
reducing centers)
541400 Specialized Design Services
(including interior, industrial,
graphic, & fashion design)
812210 Funeral Homes & Funeral
711510 Independent Artists, Writers,
Services
Educational Services
611000 Educational Services
(including schools, colleges,
& universities)
Health Care and Social
Assistance
& Performers
812220 Cemeteries & Crematories
Computer Systems Design and
Museums, Historical Sites, and
Similar Institutions
Related Services
812310 Coin-Operated Laundries &
Drycleaners
541511 Custom Computer
Programming Services
712100 Museums, Historical Sites, &
812320 Drycleaning & Laundry
Services (except
Similar Institutions
541512 Computer Systems Design
Amusement, Gambling, and
Recreation Industries
Coin-Operated)
Services
812330 Linen & Uniform Supply
541513 Computer Facilities
Management Services
713100 Amusement Parks & Arcades
713200 Gambling Industries
Offices of Physicians and Dentists
812910 Pet Care (except Veterinary)
621111 Offices of Physicians (except
Services
541519 Other Computer Related
mental health specialists)
713900 Other Amusement &
Services
812920 Photofinishing
Recreation Industries
621112 Offices of Physicians, Mental
Health Specialists
Other Professional, Scientific, and
Technical Services
812930 Parking Lots & Garages
812990 All Other Personal Services
(including golf courses, skiing
facilities, marinas, fitness
centers, & bowling centers)
621210 Offices of Dentists
541600 Management, Scientific, &
Technical Consulting
Services
Religious, Grantmaking, Civic,
Professional, and Similar
Organizations
Offices of Other Health
Practitioners
Accommodation and Food
Services
621310 Offices of Chiropractors
621320 Offices of Optometrists
541700 Scientific Research &
813000 Religious, Grantmaking,
Civic, Professional, & Similar
Organizations (including
condominium and
Development Services
Accommodation
541800 Advertising & Public
Relations, & Related Services
621330 Offices of Mental Health
Practitioners (except
Physicians)
721110 Hotels (except Casino Hotels)
& Motels
homeowners associations)
541910 Marketing Research & Public
721120 Casino Hotels
Opinion Polling
621340 Offices of Physical,
Occupational & Speech
Therapists, & Audiologists
Other
721191 Bed & Breakfast Inns
541920 Photographic Services
999999 Unclassified Establishments
721199 All Other Traveler
541930 Translation & Interpretation
(unable to classify)
Accommodation
621391 Offices of Podiatrists
Services
721210 RV (Recreational Vehicle)
Parks & Recreational Camps
621399 Offices of All Other
Miscellaneous Health
Practitioners
541940 Veterinary Services
541990 All Other Professional,
Scientific, & Technical
Services
721310 Rooming & Boarding Houses,
Dormitories, & Workers’
Camps
Outpatient Care Centers
621410 Family Planning Centers
Management of Companies
(Holding Companies)
Food Services and Drinking Places
621420 Outpatient Mental Health &
722300 Special Food Services
Substance Abuse Centers
(including food service
621491 HMO Medical Centers
621492 Kidney Dialysis Centers
551111 Offices of Bank Holding
contractors & caterers)
Companies
722410 Drinking Places (Alcoholic
551112 Offices of Other Holding
Companies
621493 Freestanding Ambulatory
Surgical & Emergency
Centers
Beverages)
722511 Full Service Restaurants
Administrative and Support and
Waste Management and
Remediation Services
722513 Limited Service Restaurants
621498 All Other Outpatient Care
722514 Cafeterias, Grill Buffets,
Centers
Buffets
Medical and Diagnostic
Laboratories
722515 Snack & Nonalcoholic
Beverage Bars
Administrative and Support
621510 Medical & Diagnostic
Services
Laboratories
561110 Office Administrative
Services
29
Index
Schedule G (Form 8865). Statement of
Application of the Gain Deferral Method
Schedule H (Form 8865). Acceleration
Events and Exceptions Reporting
Relating to Gain Deferral Method Under
G
A
Acquisitions 4
General Reporting Instructions for
Schedule N. Transactions Between
Controlled Foreign Partnership and
H
Schedule O (Form 8865). Transfer of
B
Schedule P (Form 8865). Acquisitions,
Dispositions, and Changes of Interests
I
C
Schedules K-2 (Form 8865), Partners’
Distributive Share Items—International,
and K-3 (Form 8865), Partner’s Share of
Income, Deductions, Credits,
L
List of Codes Used in Schedule K-1 (Form
etc.—International 18
8865) 22
Schedules K, Partners' Distributive Share
Items and K-1 (Form 8865), Partner’s
Share of Income, Deductions, Credits,
Etc. 16
P
Partnership 6
Penalties 7
T
R
D
Definitions 6
Dispositions 4
U
S
Schedule A-1. Certain partners of Foreign
E
Partnership 11
W
Schedule A-2. Foreign Partners of Section
Exceptions for Filing:
Schedule A. Constructive Ownership of
Schedule B. Income Statement–Trade or
F
30