언어 선택

양식 8986 관련 기사

양식 8986의 지침, 파트너십 평가 항목 ( 섹션 6226 및 6227)에 조정 (s)의 파트너 공유

1월 2024일 개정

세부
파일 형식 PDF
크기 189.6 KB
다운로드
Department of the Treasury  
Internal Revenue Service  
Instructions for Form 8986  
Partner’s Share of Adjustment(s) to Partnership-Related Item(s)  
(January 2024)  
(Required Under Sections 6226 and 6227) For use with Form 8986 (December 2019)  
pass-through partner to which the adjustments in the statement  
relate.  
Contents  
Page  
Reminder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1  
Purpose of Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1  
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1  
General Instructions . . . . . . . . . . . . . . . . . . . . . . . . . 2  
Who Should Prepare Form 8986 . . . . . . . . . . . . . 2  
Where To Submit Form 8986 . . . . . . . . . . . . . . . . 2  
Due Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2  
Withholding for Foreign Partners . . . . . . . . . . . . . 2  
Audited partnership, for purposes of Form 8986, is a BBA  
partnership that made the election under section 6226 to have its  
partners report their share of adjustments to partnership-related  
items.  
Audited partnership’s adjustment year is the year that  
includes the date the court decision became final, if the  
partnership filed a petition under section 6234. Otherwise, it is  
the year that includes the date the final partnership adjustment  
(FPA) letter was mailed, or the FPA waiver was executed by the  
IRS.  
Instructions for Partners That Receive Form  
Adjustments that do not result in an IU. A partnership  
adjustment does not result in an imputed underpayment (IU) if  
the result of netting with respect to any grouping or subgrouping  
that includes the particular partnership adjustment is zero or less  
than zero. Adjustments do not result in an IU if the calculation of  
the IU on those adjustments results in an amount that is zero or  
less than zero. Any adjustment to an item which is not a  
monetary item (for example, an election made by the  
partnership) is an adjustment that does not result in an IU.  
BBA AAR is an administrative adjustment request filed by a BBA  
partnership.  
8986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2  
Specific Instructions . . . . . . . . . . . . . . . . . . . . . . . . . 3  
Part I—Information About the Entity  
Submitting This Form . . . . . . . . . . . . . . . . . . . 3  
Part II—Information About the Audited  
Partnership or the Partnership That Filed  
an AAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3  
Part III—Information About the Pass-Through  
Partner Issuing and Submitting This Form  
8986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3  
BBA partnership is a partnership that is subject to the  
centralized partnership audit regime that was enacted into law by  
section 1101 of the Bipartisan Budget Act of 2015 (BBA). The  
BBA is generally effective for tax years beginning on or after  
January 1, 2018.  
Part IV—Information About the Partner  
Receiving This Form 8986 . . . . . . . . . . . . . . . . 3  
Part V—Partner’s Total Reviewed Year  
Income, Gain, Loss, Deductions, Credits,  
Designated individual (DI) is the individual through whom an  
entity partnership representative acts.  
and Other Items . . . . . . . . . . . . . . . . . . . . . . . 4  
Part VI—Statements . . . . . . . . . . . . . . . . . . . . . . 6  
Section references are to the Internal Revenue Code unless  
otherwise noted.  
Extended due date of the partnership’s adjustment year  
return is, for purposes of Form 8986, the extended due date of  
the AAR or audited partnership’s adjustment year return  
regardless of whether the partnership is required to file a return  
for the adjustment year or timely filed a request for an extension.  
Finally determined. The partnership adjustment(s) becomes  
finally determined upon the later of the expiration of the time to  
file a petition under section 6234 or, if a petition is filed under  
section 6234, the date when the court’s decision becomes final  
or the date the closing agreement is entered into between the  
IRS and the partnership.  
Future Developments  
For the latest information about developments related to Form  
8986 and its instructions, such as legislation enacted after they  
were published, go to IRS.gov/Form8986.  
Reminder  
The Bipartisan Budget Act of 2015 (BBA) created a centralized  
partnership audit regime that replaced the partnership audit  
procedures under the Tax Equity and Fiscal Responsibility Act of  
1982 (TEFRA). Form 8986 was created for partnerships to show  
each partner’s share of adjustments to partnership-related items  
as a result of a BBA audit or BBA administrative adjustment  
request (AAR).  
First affected year is the partner’s tax year that includes the  
end of the audited or AAR partnership’s reviewed year(s). Each  
reviewed year of an audited partnership should have a  
corresponding first affected year for each partner.  
Imputed underpayment (IU) is the amount determined under  
sections 6225, 6226, and 6227, and the regulations thereunder.  
Partnership representative (PR) is the person designated by  
the partnership or by the IRS under section 6223 and the  
regulations thereunder to act on behalf of the BBA partnership.  
Pass-through partner is a pass-through entity that holds an  
interest, either directly or indirectly, in a partnership.  
Pass-through entities include partnerships, S corporations,  
trusts, and decedents’ estates. For purposes of Form 8986, a  
pass-through entity is not a wholly owned entity disregarded as  
separate from its owner for federal tax purposes or a trust that is  
wholly owned by only one person.  
Purpose of Form  
Form 8986 is used by BBA partnerships to furnish and transmit  
each partner’s share of adjustments to partnership-related items.  
Definitions  
AAR partnership is a BBA partnership (see below) that has  
filed an administrative adjustment request (AAR) under section  
6227.  
AAR partnership’s adjustment year is the partnership tax year  
that includes the year the AAR was filed with the IRS.  
Affected partner is a partner that held an interest in a  
pass-through partner at any time during the tax year of the  
Pass-through partner’s tax year end to which the  
adjustments relate is the end of the pass-through partner's tax  
year which includes the audited or AAR partnership's reviewed  
year end date.  
Jan 16, 2024  
Cat. No. 69668G  
     
Note. Certain entity partners can be both a non-pass-through  
partner and a pass-through partner. To the extent the  
adjustments an entity partner received on a Form 8986 relate to  
items that are taxable at the entity level, it is considered a  
non-pass-through partner, and with regard to adjustments that  
pass through to its owners/beneficiaries it is considered a  
pass-through partner.  
An audited partnership can submit corrected Forms 8986,  
along with Form 8985, within 60 days of the original due date  
without IRS permission. If corrected forms need to be submitted  
after the 60-day correction period, the audited partnership must  
contact the IRS for permission to submit.  
AAR partnerships. An AAR partnership that either elects to  
push out the resulting adjustments to its partners or has  
adjustments that do not result in an IU must furnish Forms 8986  
to all partners and include them with their AAR, along with Form  
8985.  
Reporting year is the partner’s tax year(s) that includes the date  
the audited or AAR partnership furnished the Forms 8986 to its  
partners.  
Reviewed year is the audited or AAR partnership’s tax year to  
which the partnership adjustment(s) relates.  
Pass-through partners. Direct and indirect pass-through  
partners must furnish Forms 8986 to their partners and submit  
them to the IRS, along with Form 8985, by the extended due  
date of the audited partnership’s adjustment year return (or the  
extended due date of the AAR partnership’s adjustment year  
return). This date can be found in Part II, item F, of the Form 8986  
that was received by the pass-through partner. Failure to submit  
these forms by the due date results in the pass-through partner  
being liable for an IU.  
A pass-through partner who receives a Form 8986 related to  
an audited partnership can submit corrected Forms 8986, along  
with Form 8985, within 60 days of the original due date without  
IRS permission. If corrected forms need to be submitted after the  
60-day correction period, the pass-through partner must contact  
the IRS for permission to submit.  
Reviewed year adjustments are adjustments originating from  
the AAR or audited partnership’s reviewed year(s).  
Reviewed year partner is any person that held an interest in  
the audited or AAR partnership at any time during the  
partnership’s reviewed year.  
General Instructions  
Who Should Prepare Form 8986  
The following persons or entities should prepare Form 8986.  
Audited partnerships that have made an election under  
section 6226.  
Direct or indirect pass-through partners that receive a Form  
8986 related to an audited partnership if they choose to furnish  
statements to their partners to further push out the adjustments.  
Direct or indirect pass-through partners that receive a Form 8986  
related to an AAR partnership, if the direct or indirect  
pass-through partner chooses to furnish statements to its  
partners to further push out adjustments or have adjustments  
that do not result in an IU.  
Withholding for Foreign Partners  
An audited partnership may have withholding and reporting  
obligations if it furnishes a Form 8986 to a reviewed year partner  
that includes an adjustment subject to withholding under  
chapter 3 (Withholding of Tax on Nonresident Aliens and Foreign  
Corporations) or chapter 4 (Taxes To Enforce Reporting on  
Certain Foreign Accounts). In those cases, the audited  
Partnerships that file an AAR under section 6227 and either  
elect to push out the resulting adjustments to their partners or  
have adjustments that do not result in an IU.  
partnership must pay the amount of tax required to be withheld  
under chapter 3 or chapter 4 before the due date of the audited  
partnership's adjustment year return (without regard to  
Where To Submit Form 8986  
extension) or the extended due date of the audited partnership's  
adjustment year return in the case of a pass-through partner.  
See Instructions for Form 1042, Annual Withholding Tax Return  
for U.S. Source Income of Foreign Persons; or Form 8804,  
Annual Return for Partnership Withholding Tax (Section 1446),  
for deposit procedures. The audited partnership must also file an  
applicable withholding tax return, Form 1042 or Form 8804, and  
the associated information returns, Forms 1042-S, Foreign  
Person's U.S. Source Income Subject to Withholding; or Forms  
8805, Foreign Partner's Information Statement of Section 1446  
Withholding Tax, for the calendar year (if filing Forms  
Audited partnerships and pass-through partners of audi-  
ted partnerships. Section 6241(10) gives the IRS authority to  
require electronic submission of anything required to be filed or  
submitted under section 6226(a). Audited BBA Partnerships and  
their pass-through partners are required to submit Forms 8985,  
Pass-Through Statement—Transmittal/Partnership Tracking  
Report, and 8986 electronically. See IRS.gov/BBAeSubmit for  
steps required to register and submit electronically.  
AAR partnerships. AAR partnerships that are electing to push  
out adjustments to their partners or have adjustments that do not  
result in an imputed underpayment must include Form 8985 with  
their AAR along with Forms 8986. The Forms 8985 and 8986  
must be filed with, and in the same manner as, the AAR.  
1042/1042-S) or tax year (if filing Forms 8804/8805) that  
includes the date on which the Form 8986 was furnished.  
Instructions for Partners That Receive Form  
8986  
Pass-through partners. In general, a pass-through partner that  
receives a Form 8986 should take into account the adjustments  
reflected on the form by either:  
Pass-through partners of an AAR partnership. Pass-through  
partners of an AAR partnership must submit Form 8985 to the  
IRS by fax at 888-981-6982, with or without Forms 8986, as  
applicable. This fax number is not for general use. Taxpayers  
should not use this for anything besides Forms 8985 and 8986.  
Illegible or other submissions received via this fax number will  
not be processed. See IRS.gov/BBAAAR for additional  
information.  
Furnishing Forms 8986 to its own partners and submitting  
those forms, along with Form 8985, to the IRS or  
Figuring and paying an IU and submitting Form 8985 to the  
IRS, where the adjustments result in an IU to the pass-through  
entity. See Form 8985 and its instructions.  
Due Dates  
One of these two options must be completed by the extended  
due date of the audited partnership’s adjustment year return (or  
the extended due date of the AAR partnership’s adjustment year  
return).  
Audited partnerships. An audited partnership that has made  
an election under section 6226 must furnish Forms 8986 to its  
partners and submit them to the IRS, along with Form 8985, no  
later than 60 days after the date on which the partnership  
adjustments are finally determined. Failure to furnish and submit  
by the due date may result in the audited partnership being liable  
for the IU.  
2
Instructions for Form 8986 (January 2024)  
           
If a pass-through partner fails to timely furnish and  
submit the relevant statements, the pass-through partner  
may be liable for an IU as well as any penalties and  
if you entered XYZ LLC on the Form 8985, you must enter XYZ  
LLC on the Form 8986. In the state field, enter the two-letter  
abbreviation or the full name of the foreign province. U.S.  
partnerships leave the country code field blank. Foreign  
partnerships enter the country code found at Foreign Country  
Codes.  
!
CAUTION  
interest with respect to the adjustments reflected on the Form  
8986 received by the pass-through partner.  
Other partners. All other partners that receive Form 8986  
should report the information on Form 8978, Partner’s Additional  
Reporting Year Tax, and attach the Form 8978 to the partner’s  
reporting year tax return. For more information, see Form 8978  
and its instructions.  
Item C—Enter the partnership's tax identification number. This  
number must be entered exactly as it appears on the Form 8985  
associated with this Form 8986.  
Item D—Enter the tax year end date of the reviewed year of the  
partnership. Each reviewed year should have a separate Form  
8986. This form must be completed for reviewed years that have  
adjustments related to an audit or an AAR.  
These partners may pay in advance to stop the running of  
interest.  
Item E—Enter the partnership’s adjustment year ending date.  
Item F—Enter the extended due date of the partnership’s  
adjustment year tax return, regardless of whether the partnership  
has filed for an extension. For AAR partnerships, this will be the  
extended due date of the tax year the AAR was filed.  
Item G—Enter the date the partnership furnished the Forms  
8986 to its partners.  
Pay by EFTPS, debit or credit card, or Direct Pay (Forms 1040  
only).  
Select Prepayment on BBA AAR/Exam Push Out as payment  
type.  
As applicable, apply payment to the tax form that will have the  
Form 8978 attached to it.  
Special Instructions for certain entity partners. Certain  
entity partners (such as trusts and estates) that receive a Form  
8986 may have some adjustments that are taxable at the entity  
level, and other adjustments that pass through to the owners and  
beneficiaries of the entity partner. The adjustments taxable to the  
entity partner should be reported on the Form 8978 attached to  
the entity partner’s reporting year tax return. For all other  
adjustments that flow through to its owners or beneficiaries, the  
entity partner should follow the above instructions for  
“pass-through partners.”  
Part III—Information About the Pass-Through  
Partner Issuing and Submitting This Form 8986  
Item A—On lines 1–6, enter the pass-through partner’s name,  
address, city, state, country code, and ZIP code. In the state  
field, enter the two-letter abbreviation or the full name of the  
foreign province. U.S. partnerships leave the country code field  
blank. Foreign pass-through partners enter the country code  
Item B—Enter the pass-through partner’s tax identification  
number.  
Specific Instructions  
Submitting a corrected form due to an incorrect TIN. If  
submitting a corrected form due to an incorrect TIN on a  
previously submitted and accepted original Form 8986, you will  
need to submit two corrected forms:  
Item C—Enter the pass-through partner’s tax year end to which  
the adjustments relate.  
Item D—Enter the name of the entity that issued the Form 8986  
to the pass-through partner, if different from the audited  
partnership or AAR partnership in Part II.  
Item E—Enter the tax identification number of the entity that  
issued the Form 8986 to the pass-through partner, if different  
from the audited partnership or AAR partnership in Part II.  
1. A corrected Form 8986 with the correct TIN, and  
2. A corrected Form 8986 with the incorrect TIN and zeros in  
Part IV, sections E through G, and in Part V. Anytime a corrected  
Form 8986 is submitted, a corrected Form 8985 must also be  
included.  
Part IV—Information About the Partner  
Receiving This Form 8986  
Original or corrected. At the top of the form, check the  
Item A—On lines 1–6, enter the partner’s name, address, city,  
state, country code, and ZIP code. In the state field, enter the  
two-letter abbreviation or the full name of the foreign province.  
U.S. partners leave the country code field blank. Foreign  
partners enter the country code found at Foreign Country Codes.  
Item B—Enter the partner’s tax identification number.  
Item C—Indicate by checking box 1 or 2 if the partner is a  
general partner or LLC member manager, limited partner, or LLC  
member. Indicate by checking box 3 or 4 if the partner is a  
domestic or foreign partner.  
appropriate box to indicate if the form is original or corrected.  
Tracking number. Enter the outgoing tracking number shown  
on the related Form 8985 of a BBA partnership or a pass through  
partner of a BBA partnership.  
Audit control number. Enter the audit control number that is  
provided on correspondence with the IRS. Pass-through  
partners can locate this number at the top of the Form 8986 they  
received. AAR partnerships, including pass-through partners of  
an AAR partnership, should leave this field blank.  
Item D—Indicate if, for tax purposes, the partner is an individual,  
S corporation, C corporation, partnership, or other type of entity  
by checking one of the boxes 1–5. If “Other,indicate what type  
on the line provided. Also indicate if the partner is a retirement  
plan or other tax-exempt entity. Note: If you entered a social  
security number as the partner's tax identification number in box  
B, you should check box 1. You should only select boxes 2–5  
when you have entered an EIN in box B.  
Part I—Information About the Entity Submitting  
This Form  
Item A—Indicate which entity is issuing this form by checking  
one of the boxes.  
Item B—Check the box that corresponds to the type of return  
normally filed by the entity issuing this form. If “Other,also  
indicate the type of return filed on the line provided.  
Item E—Enter the partner’s percentage share of partnership  
profits, losses, and capital as originally reported on  
Schedule K-1, the change per audit or AAR (if none, enter zero),  
and the corrected percentage.  
Part II—Information About the Audited  
Partnership or the Partnership That Filed an  
AAR  
Item F—Enter the partner’s share of total liabilities—recourse  
and nonrecourse—as originally reported on Schedule K-1, the  
change per audit or AAR (if none, enter zero), and the corrected  
amounts.  
Items A and B—On lines 1–6, enter the name and address of  
the partnership. The name must be entered exactly as it appears  
on the Form 8985 associated with this Form 8986. For example,  
3
Instructions for Form 8986 (January 2024)  
         
Item G—Enter the components of the partner’s capital account  
as originally reported on Schedule K-1, the change per audit or  
AAR (if none, enter zero), and the corrected amounts.  
Schedule K-3. For each item that was adjusted, enter the  
following.  
Column (a), Line number—The Schedule K-1 line number that  
was adjusted. If you have changes to Schedule K-3, enter “K3”  
(no dash).  
Note. If the partner in the partnership is an entity, such as  
single-member limited liability company (LLC), that is a  
Column (b), Line title—The title of the Schedule K-1 item that  
was adjusted. For adjustments to Schedule K-3, enter the part,  
section (if applicable), line, and column reference.  
Column (c), Code—If applicable, use the code letters listed in  
the Schedule K-1 instructions that correspond to the line number  
shown in column (a). For adjustments to Schedule K-3, if  
applicable, enter the country code. See the Schedule K-3  
instructions. If no specific code applies, enter “NA.”  
Column (d), As reported—Enter the original amount reported  
to the partner on their Schedule K-1 or as previously corrected  
by the partnership. For adjustments to Schedule K-3, do not  
enter amounts on column (d).  
disregarded entity (DE) for federal income tax purposes, in item  
A, enter the name and address of the beneficial owner of the DE  
partner. The beneficial owner is the taxpayer who owns the DE  
partner. Enter the TIN of the beneficial owner of the DE partner in  
item B rather than the TIN of the DE partner. In addition to the  
beneficial owner information reported in Part IV, list the name  
and TIN of the DE partner in Part VI of the Form 8986.  
Part V—Partner’s Total Reviewed Year Income,  
Gain, Loss, Deductions, Credits, and Other  
Items  
Column (e), Check if statement in Part VI—Check the box in  
this column if the item shown in column (a) has a corresponding  
statement in Part VI. For adjustments to Schedule K-3, enter an  
explanation of the adjustment on Part VI of Form 8986 with  
reference to the entry on Part V, column (b).  
Note. Adjustments that increase a schedule K-1 item as  
originally reported or as corrected should be shown as positive  
amounts; adjustments that decrease schedule K-1 items should  
be shown as negative amounts.  
For columns (a)–(c), refer to the relevant Schedule K-1 and  
instructions. See special instructions for changes to  
Example 1  
On its filed 2024 return, partnership ABC reported $1,000 of general category foreign source interest income with respect to  
Country Y on Partner A’s Schedule K-3. Partnership ABC later determined that the amount should have been reported as passive  
category foreign source interest income on Schedule K-3. To make the correction to the 2024 return, ABC filed an AAR on  
November 10, 2025, attaching Forms 8985 and 8986. The two-letter code from the list at Foreign Country Codes for Country Y is  
YY. Partnership ABC includes in Part V of the Form 8986 sent to Partner A the information as follows.  
Example 1. Form 8986, Part V. Partner’s Total Reviewed Year Income, Gain, Loss, Deduction, Credits, and  
Other Items  
Schedule K-1  
(f)  
(e)  
(a)  
(b)  
Line title  
(c)  
Code*  
(d)  
Reviewed year  
adjustments as  
finally determined  
Check if statement  
in Part VI  
Line number  
As reported  
K-3  
K-3  
Part II, Sec. 1, Line 6A,  
column (e)  
YY  
YY  
Part II, Sec. 1, Line 6A,  
column (c)  
Partnership ABC includes in Part VI of the Form 8986 sent to Partner A the information as follows.  
Example 1. Form 8986, Part VI. Statements  
(a)  
Line no./  
code  
(b)  
Statement  
Line title  
Code  
As reported  
Review year adjustments  
As corrected  
Part II, Sec. 1, Line 6A,  
column (e)  
K-3  
YY  
$1,000  
$(1,000)  
$0  
Part II, Sec. 1, Line 6A,  
column (c)  
YY  
$0  
$1,000  
$1,000  
4
Instructions for Form 8986 (January 2024)  
 
Example 2  
On its filed return, Partnership ABC reported on Partner A’s Schedule K-3, Part VIII, as follows.  
Example 2. Schedule K-3 (Form 1065), Part VIII.  
Line  
A
B
Entry  
1234  
PAS  
C
iii  
Unit  
1a1i  
1a1ii  
Euro QBU1  
YY  
1000  
Subsequent to filing its return, Partnership ABC determines that the amount reported on Line 1a1ii of Partner A’s Schedule K-3, Part  
VIII, should have been €1,500. Partnership ABC makes the correction by filing an AAR with Forms 8985 and 8986 attached. It  
includes the following information in Part V of the Form 8986.  
Example 2. Form 8986, Part V. Partner’s Total Reviewed Year Income, Gain, Loss, Deduction, Credits, and  
Other Items  
Schedule K-1  
(f)  
(e)  
(a)  
(b)  
Line title  
(c)  
Code*  
(d)  
Reviewed year  
adjustments as  
finally determined  
Check If statement  
in Part VI  
Line number  
As reported  
K-3  
Part VIII, Line 1a1  
YY  
Partnership ABC must report the adjustment amount with respect to Partner A in Part VI of Form 8986 as follows.  
Example 2. Form 8986, Part VI. Statements  
(a)  
(b)  
Statement  
Line number/code  
Part VIII, K-3 Line  
As reported  
1234  
Adjustments  
As corrected  
K-3  
A
B
PAS  
C
iii  
1a1ii  
1,000  
500  
1,500  
Note. Although the first three lines are not adjusted, they are necessary to identify the adjustment line, because there might be more  
than one Part VIII.  
Column (f), Reviewed year adjustments as finally  
determined—Enter the partner’s share of reviewed year  
adjustments that corresponds to the line item in column (a). For  
adjustments to Schedule K-3, do not enter amounts on column  
(f).  
should not be shown in this column. For adjustments to  
Schedule K-3, do not enter amounts on column (g).  
Column (h), Net (column (f) minus column (g))—Enter the  
amount in column (f) less the amount in column (g). For  
adjustments to Schedule K-3, do not enter amounts on column  
(h).  
Column (g), Approved modifications—Enter the partner’s  
share of the total modifications approved by the IRS with respect  
to the item adjusted. Modifications related to the filing of an AAR  
Loans and other items recharacterized as distributions to  
partners. If a reviewed year adjustment has been made to  
change a partner loan or other item to a partner distribution, this  
5
Instructions for Form 8986 (January 2024)  
adjustment should be reported with the column (a) line number  
that corresponds to the Schedule K-1 “Distributions” category  
and with column (c), code A, for cash distributions if the partner  
received money, and as a code C if the partner received property  
other than money.  
statements section can be used to add an “As Corrected”  
column to the amounts reported in Part V. If doing so be sure to  
complete the line number field in column (a) which is a  
mandatory field for all items entered in Part VI (Statements).  
Statements related to section 199A information.  
Disguised sale adjustments. Distributions to a partner that  
were changed as part of an audit proceeding to disguised sale  
proceeds under section 707 should be reported with the column  
(a) line number that corresponds to the Schedule K-1 “Other”  
category and with column (c), code DS. The partnership should  
also include a statement in Part VI describing the asset that was  
sold, the proceeds, and the tax basis of the asset at the time of  
the contribution.  
Note. Because section 199A dividends are reported as a  
cumulative amount and not per qualified trade or business, these  
should only be included once in the first section 199A statement  
attached to Form 8986, regardless of how many statements may  
be necessary.  
Adjustments that increase or decrease section 199A  
information reported to the partners must be shown in a separate  
statement for each trade or business or each aggregated trade  
or business. See below for an example of the information that  
should be included in Part VI of the Form 8986.  
Note. Column (f) amounts should correspond to the partner’s  
distributive share of audit adjustments as finally determined (or  
AAR adjustments). Column (g) amounts should only include  
approved modifications with respect to the partner receiving the  
Form 8986. Only approved amended return and closing  
agreement modifications should be included in column (g)  
above. All other modifications should be included in a separate  
statement in Part VI.  
Note. Section 199A dividends should only be included in the  
first section 199A statement attached to Form 8986.  
Each trade or business should indicate if it is a PTP, an  
Aggregated, or an SSTB. See the Instructions for Schedule K-1  
(Form 1065 or Form 1120-S).  
Applicable penalties. The applicability of penalties is  
determined at the audited partnership or AAR partnership level.  
In the penalties section of Part V, enter the penalty code  
sections, descriptions, rates, adjustment line numbers, and total  
adjustment amount to which the penalty applies.  
If the partnership is a patron of a specified agricultural or  
horticultural cooperative, the partnership must also include a  
statement for each trade or business identifying the  
adjustment(s) to qualified items of income, gain, deduction, and  
loss and W-2 wages allocable to qualified payments.  
Part VI—Statements  
Note. Because section 199A(g) deductions are reported as a  
cumulative amount and not per qualified trade or business, these  
should only be included once in the first statement of  
adjustments to items allocable to qualified payments attached to  
Form 8986, regardless of how many statements may be  
necessary.  
Column (a), Line no./code—List the corresponding Part V  
column (a) Schedule K-1 line number and column (c) code (if  
applicable) for each item for which a statement is included.  
Column (b), Statement—Include a detailed explanation of the  
amount(s) that correspond to the item in column (a).  
Supporting schedules and statements should be in a format  
that shows the original amount, the net change, and the correct  
amount for each item listed in the statement. If any column (b)  
statements exceed the space allowable in one box, continue in  
the next box with the same information in column (a).  
Example. Assume Partnership ABC has one trade or  
business that is an SSTB and is not a patron in a specified  
agricultural or horticultural cooperative. On its filed return,  
Partnership ABC reported the items shown in Table 1 on  
Statement A—QBI Pass-Through Entity Reporting, attached to  
Partner A’s Schedule K-1.  
Statements provided in addition to amounts in Part V. To  
further explain the effect of any adjustment, the Part VI  
Table 1. Example of Section 199A Related Amounts Reported to Partner A on Statement A—QBI  
Pass-Through Entity Reporting  
EIN:  
PTP  
Aggregated  
■ SSTB  
Partner A’s share of:  
QBI or qualified PTP items subject to partner-specific determinations:  
Ordinary business income (loss)  
$200,000  
$10,000  
Rental income (loss)  
Royalty income (loss)  
Section 1231 gain (loss)  
Other deductions  
$50,000  
$80,000  
$50,000  
$60,000  
$5,000  
W-2 wages  
UBIA of qualified property  
Section 199A dividends  
6
Instructions for Form 8986 (January 2024)  
 
Assume the adjustments per audit increased Partner A’s share of ordinary income by $10,000 and royalty income by $5,000, and  
decreased other deductions by $20,000. Assume that all of the adjustments are determined to be qualified items of income, gain,  
deduction, and loss at the partnership level.  
Partnership ABC should include in Part VI of the Form 8986 sent to Partner A the information shown in Table 2.  
Table 2. Example of Part VI of Form 8986  
EIN:  
As Reported  
Net Adjustments  
As Corrected  
Partner’s Share:  
PTP  
PTP  
Aggregated  
■ SSTB  
Aggregated  
■ SSTB  
QBI or qualified PTP items subject to  
partner-specific determinations:  
Ordinary business income (loss)  
$200,000  
$10,000  
$10,000  
$5,000  
$210,000  
$10,000  
$5,000  
Rental income (loss)  
Royalty income (loss)  
Section 1231 gain (loss)  
Other deductions  
$50,000  
$80,000  
$50,000  
$60,000  
$5,000  
$50,000  
$60,000  
$50,000  
$60,000  
$5,000  
($20,000)  
W-2 wages  
UBIA of qualified property  
Section 199A dividends  
The time needed to complete and file this form will vary  
depending on individual circumstances. The estimated burden  
for business taxpayers filing this form is approved under OMB  
control number 1545-0123 and is included in the estimates  
shown in the instructions for their business income tax return.  
Paperwork Reduction Act Notice. We ask for the information  
on this form to carry out the Internal Revenue laws of the United  
States. You are required to give us the information. We need it to  
ensure that you are complying with these laws and to allow us to  
figure and collect the right amount of tax.  
If you have comments concerning the accuracy of these time  
estimates or suggestions for making this form simpler, we would  
be happy to hear from you. See the instructions for the tax return  
with which this form is filed.  
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.  
7
Instructions for Form 8986 (January 2024)