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IRS Instructions for Form 8865 - 2010

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IRS Instructions for Form 8865 - 2010 Powered By Docstoc
					2010                                                                                                                              Department of the Treasury
                                                                                                                                  Internal Revenue Service

Instructions for Form 8865
Return of U.S. Persons With Respect to Certain Foreign Partnerships
Section references are to the Internal                    Contents                                           Page      schedules of Form 1065 (or Form 1065-B,
Revenue Code unless otherwise noted.                      Schedule P — Acquisitions,                                   U.S. Return of Income for Electing Large
Contents                                         Page       Dispositions, and Changes of                               Partnerships, if the foreign partnership is
Reminder . . . . . . . . . . . . . . . . . . . . . 1        Interests in a Foreign                                     an electing large partnership). See the
                                                            Partnership . . . . . . . . . . . . . .       ..... 9      general instructions for these schedules,
General Instructions . . . . . . . . . . . . . 1                                                                       beginning on page 6, for more
  Purpose of Form . . . . . . . . . . . . . . . 1           Part I — Acquisitions . . . . . . .           ..... 9
                                                            Part II — Dispositions . . . . . . .          ..... 9      information.
  Who Must File . . . . . . . . . . . . . . . . 1
  Categories of Filers . . . . . . . . . . . . . 2          Part III — Change in
                                                                                                                       If you are completing Then use the
                                                             Proportional Interest . . . . . .            ..... 9      Form 8865             instructions for
  Exceptions to Filing . . . . . . . . . . . . . 2
                                                            Part IV — Supplemental                                                           Forms 1065/1065-B:
  Relief for Category 1 and 2                                Information Required To Be
    Filers When the Foreign                                                                                            Schedule B            Form 1065, Page 1/
                                                             Reported . . . . . . . . . . . . . .         ..... 9                            Parts I and II of Form
    Partnership Files Form 1065                           Paperwork Reduction Act Notice                   . . . 10                          1065-B
    or Form 1065-B . . . . . . . . . . . . . . . 3        Codes for Principal Business                                 Schedule D            Schedule D
  When To File . . . . . . . . . . . . . . . . . 3          Activity and Principal Product                             Schedules K and K-1 Schedules K and K-1
  Definitions . . . . . . . . . . . . . . . . . . . 3       or Service . . . . . . . . . . . . . .        . . . . 10   Schedule L            Schedule L
  Penalties . . . . . . . . . . . . . . . . . . . . 4     Index . . . . . . . . . . . . . . . . . . . .   . . . . 14   Schedule M-1          Schedule M-1
  Corrections to Form 8865 . . . . . . . . 4                                                                           Schedule M-2          Schedule M-2
Specific Instructions . . . . . . . . . . . . 4           Reminder                                                     Purpose of Form
  Tax Year . . . . . . . . . . . . . . . . . . . . 5      Section 108(i) provides an election in
  Identifying Numbers and                                 which cancelled debt income from debt                        Use Form 8865 to report the information
    Addresses . . . . . . . . . . . . . . . . . . 5       cancellations occurring after December                       required under section 6038 (reporting
Schedule A — Constructive                                 31, 2008, and before January 1, 2011, is                     with respect to controlled foreign
  Ownership of Partnership                                includible in gross income ratably over a                    partnerships), section 6038B (reporting of
  Interest . . . . . . . . . . . . . . . . . . . . . 6    5-year period, beginning with the fourth or                  transfers to foreign partnerships), or
                                                          fifth tax year following the tax year of the                 section 6046A (reporting of acquisitions,
Schedule A-1 — Certain Partners                                                                                        dispositions, and changes in foreign
  of Foreign Partnership . . . . . . . . . . . 6          reacquisition. The election must be
                                                          attached to Form 1065, U.S. Return of                        partnership interests).
Schedule A-2 — Affiliation
  Schedule . . . . . . . . . . . . . . . . . . . . 6      Partnership Income, and annual reporting                     Who Must File
                                                          must be made on Schedule K-1 (Form
Schedule B — Income                                                                                                    A U.S. person qualifying under one or
                                                          1065), Partner’s Share of Income,
  Statement — Trade or                                    Deductions, Credits, etc., and the                           more of the Categories of Filers (see
  Business Income . . . . . . . . . . . . . . 6           accompanying Form 1065. See the                              below) must complete and file Form 8865.
Schedule D — Capital Gains and                            Instructions for Form 1065, Temporary                        These instructions and the Filing
  Losses . . . . . . . . . . . . . . . . . . . . . . 6    Regulations section 1.108(i)-2T, and                         Requirements for Categories of Filers
Schedules K and K-1 —                                     Revenue Procedure 2009-37 for more                           chart below explain the information,
  Partners’ Distributive Share                            information. Revenue Procedure 2009-37                       statements, and schedules required for
  Items . . . . . . . . . . . . . . . . . . . . . . . 6   is available at                                              each category of filer. If you qualify under
                                                          www.irs.gov/irb/2009-36_IRB/ar07.html.                       more than one category for a particular
Schedule L — Balance Sheets
                                                          For information on the validity of entity                    foreign partnership, you must submit all
  per Books . . . . . . . . . . . . . . . . . . . 7                                                                    the items required for each category
Schedule M — Balance Sheets                               classification elections made by certain
                                                          foreign eligible entities under Regulations                  under which you qualify.
  for Interest Allocation . . . . . . . . . . . 7
Schedule M-1 — Reconciliation of                          section 301.7701-3(c) where there is                             Example. If you qualify as a Category
  Income (Loss) per Books With                            uncertainty regarding the number of                          2 and a Category 3 filer, you must submit
                                                          owners of the foreign eligible entity on the                 all the schedules required of Category 2
  Income (Loss) per Return . . . . . . . . 7
                                                          effective date of the election, see                          filers (page 1 of Form 8865, Schedules A,
Schedule M-2 — Analysis of                                Revenue Procedure 2010-32. Revenue                           A-2, N, and K-1) plus any additional
  Partners’ Capital Accounts . . . . . . . . 7            Procedure 2010-32 is available at www.                       schedules that Category 3 filers are
Schedule N — Transactions                                 irs.gov/irb/2010-36_IRB/ar09.html.                           required to submit (Schedules A-1 and
  Between Controlled Foreign                                                                                           O).
                                                              For information on filing a late entity
  Partnership and Partners or                             classification election under section 7701,                     Complete a separate Form 8865 and
  Other Related Entities . . . . . . . . . . . 8          see Revenue Procedure 2009-41 and the                        the applicable schedules for each foreign
Schedule O — Transfer of                                  instructions for Form 8832, Entity                           partnership.
  Property to a Foreign                                   Classification Election. Revenue
  Partnership . . . . . . . . . . . . . . . . . . . 8                                                                     File the 2010 Form 8865 with your
                                                          Procedure 2009-41 is available at
  Part I — Transfers Reportable                                                                                        income tax return for your tax year
                                                           www.irs.gov/irb/2009-39_IRB/ar17.html.
    Under Section 6038B . . . . . . . . . . 8                                                                          beginning in 2010.
  Part II — Dispositions                                  General Instructions                                             If a Form 8832 was filed for this entity
    Reportable Under Section                              The specific instructions for Schedules B,                   for the current tax year, see Where to File
    6038B . . . . . . . . . . . . . . . . . . . . . 8     D, K, K-1, M-1, and M-2 are not included                     in the instructions for Form 8832 to
  Part III — Gain Recognition                             in these instructions. If you are required to                determine if you are required to attach a
    Under Section 904(f)(3) or                            complete these schedules for Form 8865,                      copy of the Form 8832 to the tax return to
    (f)(5)(F) . . . . . . . . . . . . . . . . . . . . 9   use the instructions for the corresponding                   which the Form 8865 is being attached.

                                                                            Cat. No. 26053N
                                                                                                               Category of Filers
                         Filing Requirements for Categories of Filers
                                                                                                 1             2              3             4
 Identifying information — (page 1 of Form 8865)
 Schedule A — Constructive Ownership of Partnership Interest
 Schedule A-1 — Certain Partners of Foreign Partnership
 Schedule A-2 — Affiliation Schedule
 Schedule B — Income Statement — Trade or Business Income
 Schedule D — Capital Gains and Losses (or Schedule D-1 — Continuation Sheet for Schedule D
 (Form 1065, 1065-B, or 8865))
 Schedule K — Partners’ Distributive Share Items
 Schedule L — Balance Sheets per Books
 Schedule M — Balance Sheets for Interest Allocation
 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 K-1 — Partner’s Share of Income, Deductions, Credits, etc. (direct partners only)
 Schedule O — Transfer of Property to a Foreign Partnership
 Schedule P — Acquisitions, Dispositions, and Changes of Interests in a Foreign Partnership



Categories of Filers                                      proportionate share of the contributed        the disposition and as a result of the
                                                          property to the foreign partnership.          disposition the person owns less than a
Category 1 filer. A Category 1 filer is a                 However, if the domestic partnership files    10% direct interest (for example, from
U.S. person who controlled the foreign                    Form 8865 and properly reports all the        10% to 8%). For purposes of this rule, a
partnership at any time during the                        required information with respect to the      disposition includes a decrease in a
partnership’s tax year. Control of a                      contribution, its partners will not be        person’s direct proportional interest; or
partnership is ownership of more than a
50% interest in the partnership. See the
                                                          required to report the transfer.              • Compared to the person’s direct
                                                              Category 3 also includes a U.S.           interest when the person last had a
definition of 50% interest on page 4.
There may be more than one Category 1                     person that previously transferred            reportable event, after the disposition the
filer for a partnership for a particular                  appreciated property to the partnership       person’s direct interest has decreased by
partnership tax year.                                     and was required to report that transfer      at least a 10% interest (for example, from
                                                          under section 6038B, if the foreign           21% to 11%).
Category 2 filer. A Category 2 filer is a                 partnership disposed of such property
U.S. person who at any time during the                    while the U.S. person remained a direct          Changes in proportional interests.
tax year of the foreign partnership owned                 or indirect partner in the partnership.       A U.S. person has a reportable event if
a 10% or greater interest in the                                                                        compared to the person’s direct
                                                          Category 4 filer. A Category 4 filer is a     proportional interest the last time the
partnership while the partnership was                     U.S. person that had a reportable event
controlled by U.S. persons each owning                                                                  person had a reportable event, the
                                                          under section 6046A during that person’s      person’s direct proportional interest has
at least 10% interests. However, if the                   tax year. There are three categories of
foreign partnership had a Category 1 filer                                                              increased or decreased by at least the
                                                          reportable events under section 6046A:        equivalent of a 10% interest in the
at any time during that tax year, no                      acquisitions, dispositions, and changes in
person will be considered a Category 2                                                                  partnership.
                                                          proportional interests.
filer. See the definition of a 10% interest                                                                 Special rule for a partnership
on page 4.                                                    Acquisitions. A U.S. person that
                                                          acquires a foreign partnership interest       interest owned on December 31, 1999.
Category 3 filer. A Category 3 filer is a                 has a reportable event if:                    If the U.S. person owned at least a 10%
U.S. person who contributed property                      • The person did not own a 10% or             direct interest in the foreign partnership
during that person’s tax year to a foreign                greater direct interest in the partnership    on December 31, 1999, then comparisons
partnership in exchange for an interest in                and as a result of the acquisition, the       should be made to the person’s direct
the partnership (a section 721 transfer), if              person owns a 10% or greater direct           interest on December 31, 1999. Once the
that person either:                                       interest in the partnership (for example,     person has a reportable event after
    1. Owned directly or constructively at                from 9% to 10%). For purposes of this         December 31, 1999, future comparisons
least a 10% interest in the foreign                       rule, an acquisition includes an increase     should be made by reference to the last
partnership immediately after the                         in a person’s direct proportional interest    reportable event.
contribution, or                                          (see Change in a proportional interest on
    2. The value of the property                          page 4); or                                   Exceptions to Filing
contributed (when added to the value of                   • Compared to the person’s direct             Multiple Category 1 filers. If during the
any other property contributed to the                     interest when the person last had a           tax year of the partnership more than one
partnership by such person, or any                        reportable event, after the acquisition the   U.S. person qualifies as a Category 1
related person, during the 12-month                       person’s direct interest has increased by     filer, only one of these Category 1
period ending on the date of transfer)                    at least a 10% interest (for example, from    partners is required to file Form 8865. A
exceeds $100,000.                                         11% to 21%).                                  U.S. person with a controlling interest in
                                                              Dispositions. A U.S. person that          the losses or deductions of the
   If a domestic partnership contributes                  disposes of a foreign partnership interest    partnership is not permitted to be the filer
property to a foreign partnership, the                    has a reportable event if:                    of Form 8865 if another U.S. person has
domestic partnership’s partners are                       • The person owned a 10% or greater           a controlling interest in capital or profits;
considered to have transferred a                          direct interest in the partnership before     only the latter may file the return. The

                                                                                  -2-                          Instructions for Form 8865 (2010)
U.S. person that files the Form 8865 must       a statement entitled “Controlled Foreign        Relief for Category 1 and 2
complete Item E on page 1.                      Partnership Reporting.”                         Filers When the Foreign
     The single Form 8865 to be filed must
                                                    This statement must contain the             Partnership Files Form 1065 or
contain all of the information that would                                                       Form 1065-B
be required if each Category 1 filer filed a    following information:
                                                    1. A statement that the indirect            If a foreign partnership files Form 1065 or
separate Form 8865. Specifically,
                                                partner was required to file Form 8865,         Form 1065-B for its tax year, Category 1
separate Schedules N and K-1 must be
                                                but is not doing so under the constructive      and 2 filers may use a copy of the
attached to the Form 8865 for each
                                                owners exception;                               completed Form 1065 or 1065-B
Category 1 filer. Also, Items B, C, and D
                                                                                                schedules in place of the equivalent
on page 1 and Schedule A on page 2 of               2. The names and addresses of the           schedules of Form 8865.
Form 8865 must be completed for each            U.S. persons whose interests the indirect
Category 1 filer not filing the form. Attach    partner constructively owns; and                    If you file Form 8865 with an
a separate statement listing this                   3. The name and address of the              electronically filed income tax return, see
information to the single Form 8865.            foreign partnership for which the indirect      the electronic filing publications identified
                                                                                                in the instructions for your income tax
     A Category 1 filer not filing Form 8865    partner would have had to have filed
                                                                                                return for more information.
must attach a statement entitled                Form 8865, but for this exception.
“Controlled Foreign Partnership                                                                     See page 1 for the Form 1065/1065-B
Reporting” to that person’s income tax                                                          schedules that are equivalent to the Form
                                                Members of an affiliated group of               8865 schedules.
return.                                         corporations filing a consolidated
     The statement must include the             return. If one or more members of an                Example. Partner A is a Category 1
following information:                          affiliated group of corporations filing a       filer with respect to FPS, a foreign
• A statement that the person qualified         consolidated return qualify as Category 1       partnership during the 2010 tax year. FPS
as a Category 1 filer, but is not submitting    or 2 filers for a particular foreign            completes and files a Form 1065 for its
Form 8865 under the multiple Category 1         partnership, the common parent                  2010 tax year. Instead of completing
filers exception.                               corporation may file one Form 8865 on           Schedules B, D, K, L, M-1, M-2, and K-1
• The name, address, and identifying            behalf of all of the members of the group
                                                                                                of Form 8865, Partner A may attach to its
number (if any) of the foreign partnership                                                      Form 8865 page 1 of Form 1065 and
                                                required to report. Except for group
of which the person qualified as a                                                              Form 1065 Schedules D, K, L, M-1, M-2,
                                                members who also qualify under the              and K-1 (including the Schedules K-1 for
Category 1 filer.                               constructive owners exception, the Form
• A statement that the filing requirement       8865 must contain all the information that
                                                                                                Partner A and all other U.S. persons
has been or will be satisfied.                                                                  owning 10% or greater direct interests in
                                                would have been required to be submitted
• The name and address of the person            if each group member filed its own Form
                                                                                                FPS). Partner A must complete the
filing Form 8865 for this partnership.                                                          following items and schedules on Form
                                                8865.
• The Internal Revenue Service Center                                                           8865:
where the Form 8865 must be filed (or           Exception for certain trusts. Trusts
                                                                                                • The first page,
indicate “e-file” if the Form 8865 has been                                                     • Schedule A,
                                                relating to state and local government          • Schedule A-1,
or will be filed electronically).               employee retirement plans are not               • Schedule A-2,
         A U.S. person who qualifies for        required to file Form 8865.                     • Schedule M, and
  !      this exception to the Category 1
                                                Exception for certain Category 4 filers.
                                                                                                • Schedule N.
 CAUTION
         filing requirement would still have                                                        Example. Partner A is a Category 2
to file a separate Form 8865 if that person     If you qualify as a Category 3 and 4 filer
                                                because you contributed property to a           filer with respect to FPS, a foreign
is also subject to the filing requirements of                                                   partnership. If FPS completes and files a
Category 3 or 4. This separate Form 8865        foreign partnership in exchange for a 10%
                                                or greater interest in that partnership, you    Form 1065 for its 2010 tax year, Partner
would include all the information required                                                      A may file with Form 8865 the Schedule
for a Category 3 or 4 filer in addition to      are not required to report this transaction
                                                under both Category 3 and 4 filing              K-1 (Form 1065) that it receives from the
the Controlled Foreign Partnership                                                              partnership instead of Schedule K-1
Reporting statement.                            requirements. If you properly report the
                                                contribution of property under the              (Form 8865). Partner A must complete
Constructive owners. See the definition                                                         the following items and schedules on
of constructive ownership on page 4. A          Category 3 rules, you are not required to
                                                                                                Form 8865:
                                                report it as a Category 4 filer. However,
Category 1 or 2 filer that does not own a
                                                the acquisition will count as a reportable
                                                                                                • The first page,
direct interest in the partnership and that
                                                event to determine if a later change in
                                                                                                • Schedule A,
is required to file this form solely because                                                    • Schedule A-2, and
of constructive ownership from a U.S.           your partnership interest qualifies as a        • Schedule N.
person(s) is not required to file Form 8865     reportable event under Category 4.
if:                                                                                             When To File
                                                    Example. Partner A does not own an          Attach Form 8865 to your income tax
     1. Form 8865 is filed by the U.S.          interest in FPS, a foreign partnership.
person(s) through which the indirect                                                            return (or, if applicable, partnership or
                                                Partner A transfers property to FPS in          exempt organization return) and file both
partner constructively owns an interest in      exchange for a 15% direct interest.
the foreign partnership,                                                                        by the due date (including extensions) for
                                                Partner A qualifies as a Category 3 filer       that return. If you do not have to file an
     2. The U.S. person through which the
                                                because he transferred property to a            income tax return, you must file Form
indirect partner constructively owns an
                                                foreign partnership and owned at least a        8865 separately with the IRS at the time
interest in the foreign partnership is also a
constructive owner and meets all the            10% interest in FPS immediately after the       and place you would be required to file an
requirements of this constructive               contribution. Partner A is also a Category      income tax return (or, if applicable, a
ownership filing exception, or                  4 filer because he did not own a 10% or         partnership or exempt organization
     3. Form 8865 is filed for the foreign      greater direct interest in FPS and as a         return). See below for penalties that may
partnership by another Category 1 filer         result of the acquisition now owns a 10%        apply if you do not file Form 8865 on time.
under the multiple Category 1 filers            or greater direct interest in FPS. If Partner
                                                A properly reports the contribution on          Definitions
exception.
                                                Form 8865 as a Category 3 filer, Partner        Partnership. A partnership is the
   To qualify for the constructive              A is not required to report his acquisition     relationship between two or more persons
ownership filing exception, the indirect        of the 15% interest in FPS as a Category        who join to carry on a trade or business,
partner must file with its income tax return    4 filer.                                        with each person contributing money,
Instructions for Form 8865 (2010)                                   -3-
property, labor, or skill and each             combined voting power, or more than             market value (FMV) of the property at the
expecting to share in the profits and          50% of the total value of shares of all         time of the contribution. This penalty is
losses of the business whether or not a        classes of stock of the corporation. For        subject to a $100,000 limit, unless the
formal partnership agreement is made.          rules concerning indirect ownership and         failure is due to intentional disregard. In
   The term “partnership” includes a           attribution, see Regulations section            addition, the transferor must recognize
limited partnership, syndicate, group,         1.6038-2(c).                                    gain on the contribution as if the
pool, joint venture, or other                  Change in a proportional interest. A            contributed property had been sold for its
unincorporated organization, through or        partner’s proportional interest in a foreign    FMV.
by which any business, financial               partnership can change as a result of           Failure to file information required of
operation, or venture is carried on, that is   changes in other partners’ interests, for       Category 4 filers. Any person who fails
not, within the meaning of the regulations     example, when another partner withdraws         to properly report all the information
under section 7701, a corporation, trust,      from the partnership. A partner’s               requested by section 6046A is subject to
estate, or sole proprietorship.                proportional interest can also change, for      a $10,000 penalty. If the failure continues
   A joint undertaking merely to share         example, by operation of the partnership        for more than 90 days after the IRS mails
expenses is not a partnership. Mere            agreement (for example, if the partnership      notice of the failure, an additional $10,000
co-ownership of property that is               agreement provides that a partner’s             penalty will apply for each 30-day period
maintained and leased or rented is not a       interest in profits will change on a set date   (or fraction thereof) during which the
partnership. However, if the co-owners         or when the partnership has earned a            failure continues after the 90-day period
provide services to the tenants, a             specified amount of profits, then the           has expired. The additional penalty shall
partnership exists.                            partner’s proportional interest changes         not exceed $50,000.
Foreign partnership. A foreign                 when the set date or specified amount of
                                               profits is reached).                            Treaty-based return positions. File
partnership is a partnership that is not                                                       Form 8833, Treaty-Based Return Position
created or organized in the United States      Penalties                                       Disclosure Under Section 6114 or
or under the law of the United States or of                                                    7701(b), to report a return position that a
any state.                                     Failure to timely submit all information        treaty of the United States (such as an
                                               required of Category 1 and 2 filers.            income tax treaty, an estate and gift tax
50% interest. A 50% interest in a              • A $10,000 penalty is imposed for each
partnership is an interest equal to:                                                           treaty, or a friendship, commerce, and
                                               tax year of each foreign partnership for
• 50% of the capital,                          failure to furnish the required information
                                                                                               navigation treaty):
• 50% of the profits, or                       within the time prescribed. If the
                                                                                               • Overrides or modifies any provision of
• 50% of the deductions or losses.             information is not filed within 90 days after
                                                                                               the Internal Revenue Code and
For purposes of determining a 50%              the IRS has mailed a notice of the failure
                                                                                               • Causes (or potentially causes) a
interest, the constructive ownership rules                                                     reduction of any tax incurred at any time.
                                               to the U.S. person, an additional $10,000
described below apply.                         penalty (per foreign partnership) is               Failure to make such a report may
10% interest. A 10% interest in a              charged for each 30-day period, or              result in a $1,000 penalty ($10,000 in the
partnership is an interest equal to:           fraction thereof, during which the failure      case of a C corporation). See section
• 10% of the capital,                          continues after the 90-day period has           6712.
• 10% of the profits, or                       expired. The additional penalty is limited
• 10% of the deductions or losses.             to a maximum of $50,000 for each failure.       Corrections to Form 8865
For purposes of determining a 10%              • Any person who fails to furnish all of        If you file a Form 8865 that you later
interest, the constructive ownership rules     the information required within the time        determine is incomplete or incorrect, file a
described below apply.                         prescribed will be subject to a reduction of    corrected Form 8865 with an amended
Constructive ownership. For purposes           10% of the foreign taxes available for          tax return following the instructions for the
of determining an interest in a                credit under sections 901, 902, and 960.        return with which you originally filed Form
partnership, the constructive ownership        If the failure continues 90 days or more        8865. Write “corrected” at the top of the
rules of section 267(c) (excluding section     after the date the IRS mails notice of the      form and attach a statement identifying
267(c)(3)) apply, taking into account that     failure, an additional 5% reduction is          and explaining the changes.
such rules refer to corporations and not to    made for each 3-month period, or fraction
partnerships. Generally, an interest           thereof, during which the failure continues
owned directly or indirectly by or for a
corporation, partnership, estate, or trust
                                               after the 90-day period has expired. See
                                               section 6038(c)(2) for limits on the
                                                                                               Specific Instructions
shall be considered as being owned             amount of this penalty.                         Important: All information must be in
proportionately by its owners, partners, or    • Criminal penalties under sections 7203,       English. All amounts must be stated in
beneficiaries.                                 7206, and 7207 may apply for failure to         U.S. dollars.
   Also, an individual is considered to        file or for filing false or fraudulent             If the information required in a given
own an interest owned directly or              information.                                    section exceeds the space provided
indirectly by or for his or her family. The        Additionally, any person that files         within that section, attach separate sheets
family of an individual includes only that     under the constructive owners exception         to provide the remaining information,
individual’s spouse, brothers, sisters,        may be subject to these penalties if all the    using the same size and format as the
ancestors, and lineal descendants. An          requirements of the exception are not           printed forms.
interest will be attributed from a             met. Any person required to file Form           Fill in all applicable lines and
nonresident alien individual under the         8865 who does not file under the multiple       schedules. All categories of filers must
family attribution rules only if the person    Category 1 filers exception may be              complete all items on page 1, with three
to whom the interest is attributed owns a      subject to the above penalties if the other     exceptions. Complete Item E only if, in
direct or indirect interest in the foreign     person does not file a correctly completed      addition to filing the form on your own
partnership under section 267(c)(1) or (5).    form and schedules. See Exceptions to           behalf, you are reporting information
U.S. person. A U.S. person is a citizen        Filing on page 2.                               about other Category 1 filers under the
or resident of the United States, a            Failure to file information required of         multiple Category 1 filing exception, or
domestic partnership, a domestic               Category 3 filers. Any person that fails        you are reporting information about
corporation, and any estate or trust that is   to properly report a contribution to a          members of your affiliated group of
not foreign.                                   foreign partnership that is required to be      corporations under the consolidated
Control of a corporation. Control of a         reported under section 6038B and the            return exception. Only Category 1 and 2
corporation is ownership of stock              regulations under that section is subject       filers are required to complete Item G6.
possessing more than 50% of the total          to a penalty equal to 10% of the fair           See Exceptions to Filing on page 2.
                                                                   -4-                               Instructions for Form 8865 (2010)
Answer Items G8 and G9 only if you are a         Item E                                        required, all exchange rates must be
Category 1 filer.                                                                              reported using a “divide-by convention”
                                                 Information about certain partners. If        rounded to at least four places. That is,
Tax Year                                         you are reporting information about other     the exchange rate must be reported in
Enter in the space below the title of Form       persons under the multiple Category 1         terms of the amount by which the
8865 the tax year of the foreign                 filers exception, or are reporting            functional currency amount must be
partnership that ended with or within the        information about members of your             divided in order to reflect an equivalent
tax year of the person filing this form.         affiliated group of corporations under the    amount of U.S. dollars. As such, the
Category 1 or 2 filers must report               consolidated return exception (see            exchange rate must be reported as the
information for the tax year of the foreign      Exceptions to Filing on page 2), identify     units of foreign currency that equal one
partnership that ends with or within their       each such person in Item E. List their        U.S. dollar, rounded to at least four
tax years. A Category 3 or 4 filer must          names, addresses, and identifying             places. Do not report the exchange rate
report on Schedules O or P, respectively,        numbers. Also, indicate whether each          as the number of U.S. dollars that equal
transactions that occurred during that           person is a Category 1 filer or Category 2    one unit of foreign currency.
filer’s tax year (rather than during the         filer, and whether such person
                                                 constructively owned an interest in the       Note. You must round the result to more
partnership’s tax year).
                                                 foreign partnership during the tax year of    than four places if failure to do so would
Identifying Numbers and                          the partnership listed at the top of page 1   materially distort the exchange rate or the
Addresses                                        of Form 8865. See Constructive                equivalent amount of U.S. dollars.
Enter the identifying number of the person       ownership on page 4.
                                                                                               Item G2
filing this return. Use an employer              Item F1
identification number (EIN) to identify                                                        If the foreign partnership was required to
partnerships, corporations, and estates or       For the foreign partnership’s address,        file Form 1065 or Form 1065-B for the
trusts. For individuals, use a social            enter the city, province or state, and the    partnership’s tax year listed at the top of
security number (SSN) or individual              foreign country in that order. Follow the     page 1 (Form 8865), check the applicable
taxpayer identification number (ITIN).           foreign country’s practice in placing the     box and enter the IRS Service Center
                                                 postal code in the address. Do not            where the form was or will be filed (or
     Include the suite, room, or other unit      abbreviate the country name. If the           enter “e-file” if the form was or will be filed
number after the street address. If the          partnership receives its mail in care of a    electronically). Also, check the applicable
Post Office does not deliver mail to the         third party (such as an accountant or         box(es) if the foreign partnership was
street address and the U.S. person has a         attorney), enter “C/O” followed by the        required to file (for the calendar year
P.O. box, show the box number instead.           third party’s name and street address or      ending with or within the foreign
Foreign address. Enter the information           P.O. box.                                     partnership’s tax year) Form 8804,
in the following order: city, province or                                                      Annual Return for Partnership
state, and country. Follow the country’s         Item F6—Principal Business                    Withholding Tax (Section 1446), or Form
practice for entering the postal code, if        Activity Code                                 1042, Annual Withholding Tax Return for
any. Do not abbreviate the country name.         If the foreign partnership filed Form         U.S. Source Income of Foreign Persons.
Item A—Category of Filer                         1065 or 1065-B. Enter the business            Item G6
                                                 code shown in Item C of the Form 1065
Check the box for each category that             or 1065-B filed by the partnership.           Note. Only Category 1 and 2 filers are
describes the person filing the form. If                                                       required to complete Item G6.
more than one category applies, check all        If the foreign partnership did not file
                                                 Form 1065 or 1065-B. Enter the                   Enter the number of Forms 8858,
boxes that apply. See Categories of Filers                                                     Information Return of U.S. Persons With
beginning on page 2.                             applicable business code from the list
                                                 beginning on page 10. If the information      Respect To Foreign Disregarded Entities,
Item C                                           necessary to apply the total receipts test    attached to Form 8865. A disregarded
Enter the filer’s share of nonrecourse           is not available, pick a principal business   entity is an entity that is disregarded as
liabilities, partnership-level qualified         activity code using the information you       an entity separate from its owner under
nonrecourse financing, and other                 have about the partnership.                   Regulations section 301.7701-3. The
liabilities. Nonrecourse liabilities are those                                                 partnership is the tax owner of the foreign
                                                 Item F8a—Functional Currency                  disregarded entity if it owns the assets
liabilities of the partnership for which no
partner bears the economic risk of loss.         Enter the foreign partnership’s functional    and liabilities of the foreign disregarded
The extent to which a partner bears the          currency. See sections 985 through 989        entity for purposes of U.S. income tax
economic risk is determined under the            and the regulations thereunder. If the        law.
rules of Regulations section 1.752-2.            partnership had more than one qualified          If the foreign partnership is the tax
                                                 business unit (QBU), attach a statement       owner of a foreign disregarded entity and
    ‘‘Qualified nonrecourse financing’’          identifying each QBU, its country of
generally includes financing:                                                                  you are a Category 1 or 2 filer of Form
                                                 operation, and its functional currency. A     8865, complete and attach Form 8858 to
• For which no one is personally liable for      QBU is any separate and clearly identified
repayment,                                                                                     Form 8865. For more information, see the
                                                 unit of a trade or business of the            instructions for Form 8858.
• That is borrowed for use in an activity        partnership which maintains separate
of holding real property, and                    books and records.                            Item G8—Separate Units
• That is borrowed from a qualified              Hyperinflationary exception. A
person (defined in section 49(a)(1)(D)(iv))                                                    Note. Only Category 1 filers are required
                                                 partnership that has a hyperinflationary      to answer Item G8.
or is lent or guaranteed by a federal,
                                                 currency as its functional currency is
state, or local government.                                                                        Indicate whether the partnership
                                                 subject to special rules set forth in
    See section 465(b)(6) for more               Regulations section 1.985-3. Under these      owned any interest in a separate unit. In
information on qualified nonrecourse             rules, a partnership must use the U.S.        general, a separate unit is:
financing.                                       dollar as its functional currency.                1. A foreign branch that is owned
                                                                                               either directly by a domestic corporation
Item D—Identification of                         Item F8b—Exchange Rate                        or indirectly by a domestic corporation
Common Parent                                    When translating functional currency to       through ownership of a partnership or
If the person filing the form is a member        U.S. dollars, you must use the method         trust interest,
of a consolidated group, but not the             specified in sections 985 through 989 and         2. An interest in a partnership,
parent, list the name, address, and EIN of       the regulations thereunder. But,                  3. An interest in a trust, or
the filer’s common parent.                       regardless of the specific method                 4. An interest in a hybrid entity.
Instructions for Form 8865 (2010)                                    -5-
See Regulations section                        not required to be listed again on                  You can view or download the
1.1503-2(c)(3),(4), or 1.1503(d)-1(b)(4) for   Schedule A-1.                                 TIP instructions for Form 1065 or
more information on separate units.            Category 1 filers. Category 1 filers must           Form 1065-B at www.irs.gov/
Attach a statement identifying each            list all U.S. persons who owned at least a   formspubs/. Also, these instructions can
separate unit and its country of operation.    10% direct interest in the foreign           be ordered by calling 1-800-829-3676
                                                                                            (1-800-TAX-FORM).
Item G9                                        partnership during the partnership’s tax
Note. Only Category 1 filers are required      year listed at the top of page 1 of Form
                                               8865.
to answer Item G9.
                                               Category 3 filers. Category 3 filers must
                                                                                            Schedule D—Capital
     Answer “Yes” to Item G9 if the
partnership meets both of the                  list:                                        Gains and Losses
requirements shown on the form. Total          • Each U.S. person that owned a 10% or       Important: You do not need to complete
receipts is defined as the sum of gross        greater direct interest in the foreign       Schedule D (or Schedule D-1
receipts or sales (Schedule B, line 1a); all   partnership during the Category 3 filer’s    Continuation Sheet for Schedule D (Form
other income reported on Schedule B            tax year, and                                1065, 1065-B, or 8865)) if you have
(lines 4 through 7); income reported on        • Any other person related to the            attached to Form 8865 a copy of the
Schedule K, lines 3a, 5, 6a, and 7;            Category 3 filer that was a direct partner   Schedule D from Form 1065 or Form
income or net gain reported on Schedule        in the foreign partnership during that tax   1065-B filed by the foreign partnership.
K, lines 8, 9a, 10 and 11; and income or       year.
                                               See Regulations section 1.6038B-2(i)(4)         All Category 1 filers must complete
net gain reported on Form 8825, Rental                                                      Schedule D to report sales or exchanges
Real Estate Income and Expenses of a           for the definition of a related person.
                                                                                            of capital assets, capital gain
Partnership or an S Corporation, lines 2,          Exception. Category 3 filers who only    distributions, and nonbusiness bad debts.
19, and 20a.                                   transferred cash and did not own a 10%
                                               or greater interest in the transferee        Specific Instructions for
Signature                                      partnership after the transfer are not       Schedule D
Filer. Do not sign Form 8865 if you are        required to complete Schedule A-1.           For the specific instructions for Schedule
filing it as an attachment to your income                                                   D, see the Instructions for Schedule D
tax return. Sign the return only if you are                                                 (Form 1065), Capital Gains and Losses.
filing Form 8865 separately because you        Schedule A-2—Affiliation                     Schedule D and its separate instructions
are not required to file a U.S. income tax                                                  are separate products for Form 1065. If
return. See When To File on page 3 for         Schedule                                     the foreign partnership files Form 1065-B,
more information.                              All filers must complete Schedule A-2.       use the instructions for Schedule D in the
Paid preparer. Do not sign Form 8865           List on Schedule A-2 all partnerships        Instructions for Form 1065-B.
or complete the paid preparer section at       (foreign or domestic) in which the foreign
                                               partnership owned a direct interest, or a            You can view or download the
the bottom of the form if Form 8865 is                                                       TIP instructions for Schedule D (Form
filed as an attachment to an income tax        10% indirect interest (under the rules of
                                               section 267(c)(1) and (5)) during the                1065) or the Instructions for Form
return. Sign Form 8865 and complete the                                                     1065-B at www.irs.gov/formspubs/. Also,
paid preparer section only if Form 8865 is     partnership tax year listed at the top of
                                               page 1, Form 8865.                           these instructions can be ordered by
filed separately.                                                                           calling 1-800-829-3676
                                               Category 1 filers. Only Category 1 filers    (1-800-TAX-FORM).
                                               must complete the ordinary income or
Schedule A—Constructive                        loss column. In that column, report the
Ownership of Partnership                       foreign partnership’s share of ordinary
                                               income (even if not received) or loss from
                                                                                            Schedules K and
Interest                                       partnerships in which the foreign            K-1—Partners’ Distributive
                                               partnership owns a direct interest. The
All filers must complete Schedule A.
                                               total amount of ordinary income or loss      Share Items
Check box a if the person filing the return                                                 Important: You do not need to complete
owns a direct interest in the foreign          from each partnership must also be
                                               included on line 4 of Schedule B.            Schedules K or K-1 if you have attached
partnership. Check box b if the person                                                      to Form 8865 a copy of the Schedules K
filing the return constructively owns an                                                    or K-1 from Form 1065 or Form 1065-B
interest in the foreign partnership. See                                                    filed by the foreign partnership.
Constructive ownership on page 4.              Schedule B—Income
Category 1 and 2 filers. Category 1 and        Statement—Trade or                           Schedule K
2 filers must list the persons (U.S. and                                                    Schedule K is a summary schedule of all
foreign) whose interests in the foreign        Business Income                              of the partners’ shares of the partnership
partnership they constructively owned          Important: You do not need to complete       income, credits, deductions, etc. Only
during the partnership tax year.               Schedule B if you have attached a copy       Category 1 filers must complete Schedule
Category 3 and 4 filers. Category 3 and        of page 1 from Form 1065, or Parts I and     K.
4 filers must list the persons (U.S. and       II of Form 1065-B, filed by the foreign
foreign) whose interests in the foreign        partnership.                                 Schedule K-1
partnership they constructively owned                                                       Schedule K-1 is used to report a specific
                                                 All Category 1 filers must complete        partner’s share of the partnership income,
during the filer’s tax year that the           Schedule B.
reportable transfer or “reportable event”                                                   deductions, credits, etc.
occurred.                                      Specific Instructions for                       All Category 1 and 2 filers must
                                               Schedule B                                   complete Schedule K-1 for any direct
                                               For specific instructions for Schedule B,    interest they hold in the partnership. A
Schedule A-1—Certain                           see the Instructions for Form 1065. Use      Category 1 or 2 filer that does not own a
                                                                                            direct interest is not required to complete
Partners of Foreign                            the specific instructions for Page 1 of
                                                                                            Schedule K-1.
                                               Form 1065, Income and Deductions. If
Partnership                                    the foreign partnership files Form 1065-B,       Category 1 filers must also complete
All Category 1 and certain Category 3          use the specific instructions for Parts I    Schedule K-1 for each U.S. person that
filers must complete Schedule A-1. Any         and II of Form 1065-B in the Instructions    directly owns a 10% or greater direct
person already listed on Schedule A is         for Form 1065-B.                             interest in the partnership.
                                                                   -6-                            Instructions for Form 8865 (2010)
    Provide the partner’s beginning and            More than one attached statement can      1.861-12T. Assets should be
year-end percentage interest in                be placed on the same sheet of paper          characterized as U.S. assets or foreign
partnership profits, losses, capital, or       and should be identified in alphanumeric      assets in one or more separate limitation
deductions. These percentages should           order by box number followed by the           categories as provided in Temporary
include any interest constructively owned      letter code (if any). For example: “Box 20,   Regulations sections 1.861-9T(g)(3) and
by the filer.                                  Code T — Depletion information — oil and      1.861-12T. The balance sheets should be
    Complete boxes 1 through 20 for any        gas” (followed by the information the         prepared in U.S. dollars under Temporary
direct interest that the partner owns in the   partner needs).                               Regulations section 1.861-9T(g)(2)(ii).
partnership.                                   Too few entry spaces on Schedule                 Exception. If the partnership or any
                                               K-1? If there are more coded items than       qualified business unit of the partnership
    Example. Partner A owns a 45%
                                               the number of spaces in box 11 or boxes       uses DASTM, Schedule M should reflect
direct interest in foreign partnership
                                               13 through 20, do not enter a code or         the tax balance sheet prepared in U.S.
(FPS). Partner A also owns 100% of the
                                               dollar amount in the last entry space of      dollars under Regulations section
stock of a domestic corporation (DC),
                                               the box. In the last entry space, enter an    1.985-3(d). See Temporary Regulations
which owns a 10% direct interest in FPS.
                                               asterisk in the left column and enter         section 1.861-9T(g)(2)(ii)(A)(2) for more
Therefore, Partner A is considered to own
                                               “STMT” in the entry space to the right.       information on DASTM.
a 55% interest in FPS and is thus a
                                               Report the additional items on an
Category 1 filer. When Partner A                                                             Line 2. Enter the partnership’s foreign
                                               attached statement and provide the box
completes Schedule K-1 for itself, Partner                                                   assets according to the following income
                                               number, the code, description, and dollar
A must report the distributive share of                                                      limitation categories:
                                               amount or information for each additional
items allocated to Partner A’s direct
                                               item. For example: “Box 15, Code              • Passive category.
interest of 45% but not any items
                                               J — Work opportunity credit — $1,000.”        • General category.
allocated to DC’s 10% interest. When                                                         • Other (attach statement).
Partner A completes Schedule K-1 for DC        Specific Instructions for                        See the instructions for line 16 of
(which Partner A must do because DC            Schedules K and K-1                           Schedule K and section 904(d) for more
owns a direct 10% interest), Partner A                                                       information.
                                               For the specific instructions for Schedules
must report on DC’s Schedule K-1 only
                                               K and K-1, see the Instructions for Form
items allocated to DC’s direct 10%
                                               1065. If the foreign partnership files Form
interest.
    Although the partnership is not subject
                                               1065-B, use the specific instructions for     Schedule
                                               Schedules K and K-1 of Form 1065-B in
to income tax, the partners are liable for     the Instructions for Form 1065-B.             M-1—Reconciliation of
tax on their shares of the partnership                                                       Income (Loss) per Books
income, whether or not distributed, and
must include their share of such items on      Schedule L—Balance                            With Income (Loss) per
their tax returns.
                                               Sheets per Books                              Return
    Allocations of income, gains, losses,                                                    Important: You do not need to complete
deductions, or credits among the partners      Important: You do not need to complete
                                               Schedule L if you have attached to Form       Schedule M-1 if you have attached to
generally should be made according to                                                        Form 8865 a copy of the Schedule M-1
the partnership agreement. See section         8865 a copy of the Schedule L from Form
                                               1065 or Form 1065-B filed by the foreign      from Form 1065 or Form 1065-B filed by
704 and the regulations thereunder.                                                          the foreign partnership.
                                               partnership.
General Reporting Instructions for                 The balance sheets should agree with         Form 8865 filers are not required to
Schedule K-1                                   the partnership’s books and records.          complete Schedule M-3 (Form 1065), Net
On each Schedule K-1, enter the                Attach a statement explaining any             Income (Loss) Reconciliation for Certain
information about the partnership and the      differences.                                  Partnerships.
partner in Parts I and II of the schedule          Only Category 1 filers are required to       Only Category 1 filers are required to
(Items A through F). For Items E and F in      complete Schedule L.                          complete Schedule M-1. If you answered
Part II of Schedule K-1, see the                                                             ‘‘Yes’’ to Item G9 on page 1 of Form
instructions for the corresponding Items J         If you answered ‘‘Yes’’ to Item G9 on
                                               page 1 of Form 8865, you do not have to       8865, you do not have to complete
and L of Schedule K-1 (Form 1065) in the                                                     Schedule M-1.
instructions for Form 1065 under the           complete Schedule L.
heading Specific Instructions (Schedule            Schedule L requires balance sheets        Specific Instructions for
K-1 Only). In Part III, enter the partner’s    prepared and translated into U.S. dollars     Schedule M-1
distributive share of each item of income,     in accordance with U.S. generally
deduction, and credit and any other            accepted accounting principles (GAAP).        For the specific instructions for Schedule
information the partner needs to prepare                                                     M-1, see the Instructions for Form 1065. If
                                                   Exception. If the partnership or any      the foreign partnership files Form 1065-B,
the partner’s tax return.                      qualified business unit of the partnership    use the specific instructions for Schedule
Codes. In box 11 and boxes 13 through          uses the dollar approximate separate          M-1 of Form 1065-B in the Instructions for
20, identify each item by entering a code      transactions method (DASTM), Schedule         Form 1065-B.
in the column to the left of the dollar        L should reflect the tax balance sheets
amount entry space. These codes are            prepared and translated into U.S. dollars
identified on the back of Schedule K-1.        according to Regulations section
                                               1.985-3(d).                                   Schedule M-2—Analysis
Attached statements. Enter an asterisk
(*) after the code, if any, in the column to                                                 of Partners’ Capital
the left of the dollar amount entry space
                                               Schedule M—Balance                            Accounts
for each item for which you have attached                                                    Important: You do not need to complete
a statement providing additional               Sheets for Interest                           Schedule M-2 if you have attached to
information. For those informational items
that cannot be reported as a single dollar     Allocation                                    Form 8865 a copy of the Schedule M-2
                                                                                             from Form 1065 or Form 1065-B filed by
amount, enter the code and asterisk in         All Category 1 filers must complete           the foreign partnership.
the left column and write “STMT” in the        Schedule M. Schedule M should reflect
dollar amount entry space to indicate the      the book values of the partnership’s             Only Category 1 filers are required to
information is provided on an attached         assets, as described in Temporary             complete Schedule M-2. If you answered
statement.                                     Regulations sections 1.861-9T(g)(2) and       ‘‘Yes’’ to Item G9 on page 1 of Form
Instructions for Form 8865 (2010)                                  -7-
8865, you do not have to complete             Part I—Transfers Reportable                    required to report a transfer of
Schedule M-2.                                 Under Section 6038B                            appreciated property to the partnership,
                                                                                             and the partnership disposes of the
Specific Instructions for                     Part I is used to report the transfer of       property while you are still a direct or
Schedule M-2                                  property to a foreign partnership. Provide
                                                                                             constructive partner, you must report that
For the specific instructions for Schedule    the information required in columns (a)
                                                                                             disposition in Part II. If the partnership
M-2, see the Instructions for Form 1065. If   through (g) with respect to each
                                                                                             disposes of the property in a
the foreign partnership files Form 1065-B,    contribution of property to the foreign
                                                                                             nonrecognition transaction and receives
use the specific instructions for Schedule    partnership that must be reported. If you
                                              contributed property with a FMV greater        in exchange substituted basis property,
M-2 of Form 1065-B in the Instructions for                                                   report the subsequent disposition of the
Form 1065-B.                                  than its tax basis (appreciated property),
                                              or intangible property, provide the            substituted basis property in the same
                                              information required in columns (a)            manner as provided for the contributed
                                              through (g) separately with respect to         property. See section 7701(a)(42) for the
Schedule N—Transactions                       each item of property transferred (except      definition of substituted basis property
Between Controlled                            to the extent you are allowed to               and Regulations section 1.704-3(a)(8) for
                                              aggregate the property under Regulations       more information.
Foreign Partnership and                       sections 1.704-3(e)(2), (3), and (4)).         Column (a). Provide a brief description
Partners or Other Related                     Provide a general description of each          of the property disposed of by the
                                              item of property in the Supplemental
Entities                                      Information Required To Be Reported
                                                                                             partnership. If you are reporting the
                                                                                             disposition of substituted basis property
All Category 1 filers must complete           section. For all other property contributed,   received by the partnership in a
Schedule N and report all transactions of     aggregate by the categories listed in Part
                                                                                             nonrecognition transaction in exchange
the foreign partnership during the tax year   I.
                                                                                             for appreciated property contributed by
of the partnership listed on the top of       Column (a). Enter the date of the              you, enter “See Attached.” Attach a
page 1 of Form 8865. A Category 1 filer       transfer. If the transfer was composed of      statement providing brief descriptions of
filing a Form 8865 for other Category 1       a series of transactions over multiple         both the property contributed by you to
filers under the multiple Category 1 filers   dates, enter the date the transfer was         the partnership and the substituted basis
exception must complete a Schedule N          completed.                                     property received by the partnership in
for itself and a separate Schedule N for
each Category 1 filer not filing Form 8865.   Column (b). Enter the number of items          exchange for that property.
                                              of property transferred.
     Category 2 filers are required to                                                       Column (b). Enter the date that you
complete columns (a), (b), and (c) of         Column (c). Enter the FMV of the
                                                                                             transferred this property to the
Schedule N. Category 2 filers do not have     property contributed (measured as of the
                                                                                             partnership. If you are reporting the
to complete column (d).                       date of the transfer).
                                                                                             disposition of substituted basis property
Column (a). Use column (a) to report          Column (d). Enter your adjusted basis in       received by the partnership in a
transactions between the foreign              the property contributed on the date of the    nonrecognition transaction in exchange
partnership and the person filing the Form    transfer. See sections 1011 through 1016       for property previously contributed by you,
8865.                                         for more information on the determination      enter “See Attached.” Attach a statement
                                              of adjusted basis.                             showing both the date you transferred the
Column (d). Use column (d) to report
transactions between the foreign              Column (e). If you contributed                 appreciated property to the partnership
partnership and any U.S. person with a        appreciated property, enter the method         and the date the partnership exchanged
10% or more direct interest in the foreign    (traditional, traditional with curative        the property for substituted basis property
partnership. If such person also qualifies    allocations, or remedial) used by the          in a nonrecognition transaction. See
under column (b), do not report               partnership to make section 704(c)             Regulations section 1.6038B-2.
transactions between the foreign              allocations with respect to each item of
partnership and that person under column      property. See Regulations section              Column (c). Enter the date that the
(d). Report the transactions only under       1.704-3(b), (c), and (d) for more              partnership disposed of the property.
column (b).                                   information on these allocation methods.
                                                                                             Column (d). Briefly describe how the
Lines 6 and 16. Enter distributions           Column (f). Enter the amount of gain, if       partnership disposed of the property (for
received from other partnerships and          any, recognized on the transfer. See           example, by sale or exchange).
distributions from the foreign partnership    sections 721(b) and 904(f)(3).
for which this form is being completed.       Column (g). Enter your percentage              Column (e). Enter the amount of gain, if
Lines 20 and 21. Enter the largest            interest in the partnership immediately        any, recognized by the partnership on the
outstanding balances during the year of       after the transfer. To the extent your         disposition of property.
gross amounts borrowed from, and gross        percentage interest in the partnership
amounts lent to, the related parties          differs among capital, profits, losses, or     Column (f). Enter the amount of
described in columns (a) through (d). Do      deductions, enter “See Below” and state        depreciation recapture, if any, recognized
not enter aggregate cash flows, year-end      the different percentages.                     by the partnership on the disposition of
loan balances, average balances, or net                                                      property. See Regulations section
                                              Supplemental information required to           1.1245-1(e) and 1.1250-1(f).
balances. Do not include open account         be reported. Enter any information from
balances resulting from sales and             Part I that is required to be reported in      Column (g). Enter the amount of gain
purchases reported under other items          greater detail. Identify the applicable        from column (e) allocated to you.
listed on Schedule N that arise and are       column number next to the information
collected in full in the ordinary course of   entered in this section. In addition, if you   Column (h). Enter the amount of
business.                                     contributed property to a foreign              depreciation recapture from column (f)
                                              partnership as part of a wider transaction,    allocated to you. See Regulations
                                              briefly describe the entire transaction.       sections 1.1245-1(e) and 1.1250-1(f). If
Schedule O—Transfer of                                                                       you recognize any section 1254 recapture
                                              Part II—Dispositions
Property to a Foreign                         Reportable Under Section
                                                                                             on the partnership’s disposition of natural
                                                                                             resource recapture property, enter “See
Partnership                                   6038B                                          Attached” and attach a statement
Note. Category 3 filers must complete         Use Part II to report certain dispositions     calculating the amount of recapture. See
Schedule O.                                   by a foreign partnership. If you were          Regulations section 1.1254-5.

                                                                  -8-                              Instructions for Form 8865 (2010)
Part III—Gain Recognition                        Columns (e) and (f). Enter your total         percentage interest in the partnership
Under Section 904(f)(3) or                       direct percentage interest in the             differs among capital, profits, losses, or
(f)(5)(F)                                        partnership both before and immediately       deductions, enter “See Below” and state
                                                 after the acquisition. To the extent your     the different percentages in Part IV.
If gain recognition was required with            direct percentage interest in the
respect to any transfer reported in Part I       partnership differs among capital, profits,   Part III—Change in
under section 904(f)(3) and (f)(5)(F),           losses, or deductions, enter “See Below”      Proportional Interest
attach a statement identifying the transfer      and state the different percentages in Part
and the amount of gain recognized.                                                             This section is completed by U.S. persons
                                                 IV.                                           who are Category 4 filers because their
                                                 Part II—Dispositions                          direct proportional interest in the foreign
Schedule P—Acquisitions,                                                                       partnership changed. See Categories of
                                                 This section is completed by U.S. persons     Filers beginning on page 2 for more
Dispositions, and Changes                        who are Category 4 filers because they
                                                 disposed of an interest in a foreign
                                                                                               details about which changes in
                                                                                               proportional interest must be reported.
of Interests in a Foreign                        partnership. See Categories of Filers
                                                 beginning on page 2 for more details          Column (a). Briefly describe the event
Partnership                                      about what types of dispositions must be      that caused your interest in the
Use Schedule P to report the acquisition,        reported. For each disposition reported in    partnership to change (for example, the
disposition, and change of interest in a         Part II, indicate in Part IV whether a        admission of a new partner).
foreign partnership.                             statement is required by Regulations
                                                 section 1.751-1(a)(3) to be filed with        Column (b). Enter the date of the
   Every Category 4 filer must complete                                                        change. If the change resulted from a
Schedule P.                                      respect to the disposition.
                                                                                               series of transactions over multiple dates,
Part I—Acquisitions                              Column (a). Unless you disposed of the        enter the date the change was completed.
                                                 interest by withdrawing, in whole or in
Part I is completed by Category 4 filers                                                       Column (c). Enter the FMV of your
                                                 part, from the partnership, enter the
required to report an acquisition of an                                                        interest in the partnership immediately
                                                 name, address, and identifying number (if
interest in a foreign partnership. See                                                         before the change.
                                                 any) of the person to whom you
Categories of Filers beginning on page 2
                                                 transferred the interest in the foreign       Column (d). Enter your basis in your
for more details about which types of
                                                 partnership.                                  partnership interest immediately before
acquisitions must be reported.
Column (a). If you acquired the interest         Column (b). Enter the date of the             the change.
in the foreign partnership by purchase,          disposition. If the disposition was
                                                 composed of a series of transactions over     Columns (e) and (f). Enter your direct
gift, inheritance, or in a distribution from a                                                 percentage interest in the partnership
trust, estate, partnership, or corporation,      multiple dates, enter the date the
                                                 disposition was completed.                    both before and immediately after the
enter the name, address, and identifying                                                       change. To the extent your percentage
number (if any) of the person from whom          Column (c). Enter the FMV of the              interest in the partnership differs among
you acquired the interest.                       interest you disposed of in the partnership   capital, profits, losses, or deductions,
Column (b). Enter the date of the                (measured as of the date of disposition).     enter “See Below” and state the different
acquisition. If the acquisition was              If you recognized gain or loss on the         percentages in Part IV.
composed of a series of transactions over        disposition, state the amount of gain or
multiple dates, enter the date the               loss in Part IV. See section 741.             Part IV—Supplemental
acquisition was completed.                       Column (d). Enter your adjusted basis in      Information Required To Be
Column (c). Enter the FMV of the                 the partnership interest disposed of          Reported
interest you acquired in the partnership         immediately before the disposition. See       Enter any information asked for in Part I,
(measured as of the date of acquisition).        section 705.                                  Part II, or Part III that must be reported in
Column (d). Enter your basis in the              Columns (e) and (f). Enter your total         detail. Identify the applicable part number
acquired partnership interest (measured          direct percentage interest in the             and column next to the information
as of the date of acquisition). See              partnership both before and immediately       entered in Part IV.
sections 722 and 742.                            after the disposition. To the extent your




Instructions for Form 8865 (2010)                                   -9-
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. Sections 6038, 6038B, and 6046A require you to provide this information. 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 Internal Revenue Service 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 possessions 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.
   The time needed to complete and file this form and related schedule will vary depending on individual circumstances. The
estimated burden for individual taxpayers filing this form is approved under OMB control number 1545 – 0074 and is included in the
estimates shown in the instructions for their individual income tax return. The estimated burden for all other taxpayers who file this
form is shown below.
                                                                                                 Learning about the                  Preparing, copying, assembling, and
Form                                                Recordkeeping                                  law or the form                       sending the form to the IRS
8865                                                66 hr., 58 min.                                 23 hr., 11 min.                                  36 hr., 5 min.
Schedule K-1 (Form 8865)                            13 hr., 38 min.                                         41 min.                                         57 min.
Schedule O (Form 8865)                              12 hr., 12 min.                                  2 hr., 22 min.                                  2 hr., 41 min.
Schedule P (Form 8865)                               5 hr., 15 min.                                         35 min.                                         42 min.

   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. See the instructions for the tax return with which this form is filed. If you do
not have to file a tax return, see the instructions for the return you would be required to file.




Codes for Principal Business                                   Using the list of activities and codes below,
                                                             determine from which activity the business derives
                                                                                                                         purchases raw materials and supplies them to a
                                                                                                                         subcontractor to produce the finished product, but
Activity and Principal Product                               the largest percentage of its “total receipts.” Total       retains title to the product, the business is
                                                             receipts is defined as the sum of gross receipts or         considered a manufacturer and must use one of the
or Service                                                   sales (Schedule B, line 1a); all other income               manufacturing codes (311110 – 339900).
                                                             reported on Schedule B, lines 4 through 7; income
This list of Principal Business Activities and their                                                                       Once the Principal Business Activity is
                                                             reported on Schedule K, lines 3a, 5, 6a, and 7;
associated codes is designed to classify an                                                                              determined, enter the six-digit code from the list
                                                             income or net gain reported on Schedule K, lines 8,
enterprise by the type of activity in which it is                                                                        below on page 1, Item F6. Also enter a brief
                                                             9a, 10, and 11; and income or net gain reported on
engaged to facilitate the administration of the                                                                          description of the business activity in Item F7.
                                                             Form 8825, lines 2, 19, and 20a. If the business
Internal Revenue Code. These Principal Business
Activity Codes are based on the North American
Industry Classification System.

Code                                         Code                                         Code                                        Code
Agriculture, Forestry, Fishing               Support Activities for Agriculture           Heavy and Civil Engineering                 311610 Animal Slaughtering and
and Hunting                                  and Forestry                                 Construction                                         Processing
                                             115110 Support Activities for Crop           237100 Utility System Construction          311710 Seafood Product Preparation
Crop Production                                      Production (including cotton                                                              & Packaging
                                                                                          237210 Land Subdivision
111100 Oilseed & Grain Farming                       ginning, soil preparation,                                                       311800 Bakeries & Tortilla Mfg
                                                                                          237310 Highway, Street, & Bridge
111210 Vegetable & Melon Farming                     planting, & cultivating)                      Construction                       311900 Other Food Mfg (including
         (including potatoes & yams)         115210 Support Activities for Animal                                                              coffee, tea, flavorings &
                                                                                          237990 Other Heavy & Civil
111300 Fruit & Tree Nut Farming                      Production                                    Engineering Construction                    seasonings)
111400 Greenhouse, Nursery, &                115310 Support Activities For                                                            Beverage and Tobacco Product
         Floriculture Production                                                          Specialty Trade Contractors
                                                     Forestry                                                                         Manufacturing
111900 Other Crop Farming                                                                 238100 Foundation, Structure, &
                                                                                                   Building Exterior Contractors      312110 Soft Drink & Ice Mfg
         (including tobacco, cotton,         Mining                                                (including framing carpentry,      312120 Breweries
         sugarcane, hay, peanut,             211110 Oil & Gas Extraction
         sugar beet & all other crop                                                               masonry, glass, roofing, &         312130 Wineries
         farming)                            212110 Coal Mining                                    siding)                            312140 Distilleries
                                             212200 Metal Ore Mining                      238210 Electrical Contractors               312200 Tobacco Manufacturing
Animal Production
                                             212310 Stone Mining & Quarrying              238220 Plumbing, Heating, &                 Textile Mills and Textile Product
112111 Beef Cattle Ranching &                                                                      Air-Conditioning Contractors
         Farming                             212320 Sand, Gravel, Clay, &                                                             Mills
                                                    Ceramic & Refractory                  238290 Other Building Equipment             313000 Textile Mills
112112 Cattle Feedlots                                                                             Contractors
                                                    Minerals Mining & Quarrying
112120 Dairy Cattle & Milk                                                                                                            314000 Textile Product Mills
                                             212390 Other Nonmetallic Mineral             238300 Building Finishing
         Production                                                                                Contractors (including             Apparel Manufacturing
                                                    Mining & Quarrying
112210 Hog & Pig Farming                                                                           drywall, insulation, painting,     315100 Apparel Knitting Mills
                                             213110 Support Activities for Mining
112300 Poultry & Egg Production                                                                    wallcovering, flooring, tile, &    315210 Cut & Sew Apparel
112400 Sheep & Goat Farming                                                                        finish carpentry)                           Contractors
                                             Utilities
112510 Aquaculture (including                                                             238900 Other Specialty Trade                315220 Men’s & Boys’ Cut & Sew
                                             221100 Electric Power Generation,                     Contractors (including site
         shellfish & finfish farms &                Transmission & Distribution                                                                Apparel Mfg
         hatcheries)                                                                               preparation)                       315230 Women’s & Girls’ Cut & Sew
                                             221210 Natural Gas Distribution
112900 Other Animal Production                                                                                                                 Apparel Mfg
                                             221300 Water, Sewage & Other                 Manufacturing
Forestry and Logging                                Systems                                                                           315290 Other Cut & Sew Apparel Mfg
113110 Timber Tract Operations                                                            Food Manufacturing                          315990 Apparel Accessories & Other
                                             221500 Combination Gas & Electric
113210 Forest Nurseries & Gathering                                                       311110 Animal Food Mfg                               Apparel Mfg
         of Forest Products                                                               311200 Grain & Oilseed Milling              Leather and Allied Product
                                             Construction                                                                             Manufacturing
113310 Logging                                                                            311300 Sugar & Confectionery
                                             Construction of Buildings                           Product Mfg                          316110 Leather & Hide Tanning &
Fishing, Hunting and Trapping
                                             236110 Residential Building                  311400 Fruit & Vegetable Preserving                  Finishing
114110 Fishing                                       Construction
114210 Hunting & Trapping                                                                        & Specialty Food Mfg                 316210 Footwear Mfg (including
                                             236200 Nonresidential Building               311500 Dairy Product Mfg                             rubber & plastics)
                                                     Construction



                                                                                     -10-
Codes for Principal Business Activity and Principal Product or Service (continued)
Code                                        Code                                   Code                                  Code
316990 Other Leather & Allied               333200 Industrial Machinery Mfg        Merchant Wholesalers, Nondurable      Gasoline Stations
          Product Mfg                       333310 Commercial & Service            Goods                                 447100 Gasoline Stations (including
Wood Product Manufacturing                            Industry Machinery Mfg       424100 Paper & Paper Products                  convenience stores with gas)
321110 Sawmills & Wood                      333410 Ventilation, Heating,           424210 Drugs & Druggists’ Sundries    Clothing and Clothing Accessories
          Preservation                                Air-Conditioning, &          424300 Apparel, Piece Goods, &        Stores
321210 Veneer, Plywood, &                             Commercial Refrigeration             Notions                       448110 Men’s Clothing Stores
          Engineered Wood Product                     Equipment Mfg                424400 Grocery & Related Products     448120 Women’s Clothing Stores
          Mfg                               333510 Metalworking Machinery Mfg      424500 Farm Product Raw Materials     448130 Children’s & Infants’ Clothing
321900 Other Wood Product Mfg               333610 Engine, Turbine & Power         424600 Chemical & Allied Products              Stores
Paper Manufacturing                                   Transmission Equipment Mfg                                         448140 Family Clothing Stores
                                                                                   424700 Petroleum & Petroleum
322100 Pulp, Paper, & Paperboard            333900 Other General Purpose                   Products                      448150 Clothing Accessories Stores
          Mills                                       Machinery Mfg
                                                                                   424800 Beer, Wine, & Distilled        448190 Other Clothing Stores
322200 Converted Paper Product Mfg          Computer and Electronic Product                Alcoholic Beverages
                                            Manufacturing                                                                448210 Shoe Stores
Printing and Related Support                                                       424910 Farm Supplies                  448310 Jewelry Stores
Activities                                  334110 Computer & Peripheral
                                                      Equipment Mfg                424920 Book, Periodical, &            448320 Luggage & Leather Goods
323100 Printing & Related Support                                                          Newspapers                             Stores
          Activities                        334200 Communications Equipment
                                                      Mfg                          424930 Flower, Nursery Stock, &       Sporting Goods, Hobby, Book, and
Petroleum and Coal Products                                                                Florists’ Supplies            Music Stores
Manufacturing                               334310 Audio & Video Equipment
                                                      Mfg                          424940 Tobacco & Tobacco Products     451110 Sporting Goods Stores
324110 Petroleum Refineries                                                        424950 Paint, Varnish, & Supplies     451120 Hobby, Toy, & Game Stores
          (including integrated)            334410 Semiconductor & Other
                                                      Electronic Component Mfg     424990 Other Miscellaneous            451130 Sewing, Needlework, & Piece
324120 Asphalt Paving, Roofing, &                                                          Nondurable Goods                       Goods Stores
          Saturated Materials Mfg           334500 Navigational, Measuring,
                                                      Electromedical, & Control    Wholesale Electronic Markets and      451140 Musical Instrument &
324190 Other Petroleum & Coal                         Instruments Mfg              Agents and Brokers                             Supplies Stores
          Products Mfg                                                             425110 Business to Business
                                            334610 Manufacturing & Reproducing                                           451211 Book Stores
Chemical Manufacturing                                Magnetic & Optical Media             Electronic Markets            451212 News Dealers & Newsstands
325100 Basic Chemical Mfg                   Electrical Equipment, Appliance, and   425120 Wholesale Trade Agents &       451220 Prerecorded Tape, Compact
325200 Resin, Synthetic Rubber, &           Component Manufacturing                        Brokers                                Disc, & Record Stores
          Artificial & Synthetic Fibers &   335100 Electric Lighting Equipment
          Filaments Mfg                                                                                                  General Merchandise Stores
                                                      Mfg                          Retail Trade                          452110 Department Stores
325300 Pesticide, Fertilizer, & Other       335200 Household Appliance Mfg         Motor Vehicle and Parts Dealers
          Agricultural Chemical Mfg                                                                                      452900 Other General Merchandise
                                            335310 Electrical Equipment Mfg        441110 New Car Dealers                         Stores
325410 Pharmaceutical & Medicine
          Mfg                               335900 Other Electrical Equipment &    441120 Used Car Dealers               Miscellaneous Store Retailers
                                                      Component Mfg                441210 Recreational Vehicle Dealers   453110 Florists
325500 Paint, Coating, & Adhesive
          Mfg                               Transportation Equipment               441221 Motorcycle Dealers             453210 Office Supplies & Stationery
                                            Manufacturing                          441222 Boat Dealers                            Stores
325600 Soap, Cleaning Compound, &
          Toilet Preparation Mfg            336100 Motor Vehicle Mfg               441229 All Other Motor Vehicle        453220 Gift, Novelty, & Souvenir
325900 Other Chemical Product &             336210 Motor Vehicle Body & Trailer             Dealers                               Stores
          Preparation Mfg                             Mfg                          441300 Automotive Parts,              453310 Used Merchandise Stores
Plastics and Rubber Products                336300 Motor Vehicle Parts Mfg                  Accessories, & Tire Stores   453910 Pet & Pet Supplies Stores
Manufacturing                               336410 Aerospace Product & Parts       Furniture and Home Furnishings        453920 Art Dealers
326100 Plastics Product Mfg                           Mfg                          Stores
                                                                                                                         453930 Manufactured (Mobile) Home
326200 Rubber Product Mfg                   336510 Railroad Rolling Stock Mfg      442110 Furniture Stores                        Dealers
Nonmetallic Mineral Product                 336610 Ship & Boat Building            442210 Floor Covering Stores          453990 All Other Miscellaneous Store
Manufacturing                               336990 Other Transportation            442291 Window Treatment Stores                 Retailers (including tobacco,
327100 Clay Product & Refractory                      Equipment Mfg                442299 All Other Home Furnishings              candle, & trophy shops)
          Mfg                               Furniture and Related Product                   Stores                       Nonstore Retailers
327210 Glass & Glass Product Mfg            Manufacturing                          Electronics and Appliance Stores      454110 Electronic Shopping &
327300 Cement & Concrete Product            337000 Furniture & Related Product     443111 Household Appliance Stores              Mail-Order Houses
          Mfg                                         Manufacturing                443112 Radio, Television, & Other     454210 Vending Machine Operators
327400 Lime & Gypsum Product Mfg            Miscellaneous Manufacturing                     Electronics Stores           454311 Heating Oil Dealers
327900 Other Nonmetallic Mineral            339110 Medical Equipment &             443120 Computer & Software Stores     454312 Liquefied Petroleum Gas
          Product Mfg                                 Supplies Mfg                 443130 Camera & Photographic                   (Bottled Gas) Dealers
Primary Metal Manufacturing                 339900 Other Miscellaneous                      Supplies Stores              454319 Other Fuel Dealers
                                                      Manufacturing                Building Material and Garden
331110 Iron & Steel Mills & Ferroalloy                                                                                   454390 Other Direct Selling
          Mfg                                                                      Equipment and Supplies Dealers                 Establishments (including
331200 Steel Product Mfg from               Wholesale Trade                        444110 Home Centers                            door-to-door retailing, frozen
          Purchased Steel                   Merchant Wholesalers, Durable          444120 Paint & Wallpaper Stores                food plan providers, party
331310 Alumina & Aluminum                   Goods                                                                                 plan merchandisers, &
                                                                                   444130 Hardware Stores
          Production & Processing           423100 Motor Vehicle & Motor                                                          coffee-break service
                                                                                   444190 Other Building Material                 providers)
331400 Nonferrous Metal (except                     Vehicle Parts & Supplies
                                                                                            Dealers
          Aluminum) Production &            423200 Furniture & Home
                                                                                   444200 Lawn & Garden Equipment &      Transportation and
          Processing                                Furnishings
                                                                                            Supplies Stores
331500 Foundries                            423300 Lumber & Other Construction
                                                                                   Food and Beverage Stores
                                                                                                                         Warehousing
Fabricated Metal Product                            Materials                                                            Air, Rail, and Water Transportation
                                            423400 Professional & Commercial       445110 Supermarkets and Other
Manufacturing                                                                               Grocery (except              481000 Air Transportation
332110 Forging & Stamping                           Equipment & Supplies                                                 482110 Rail Transportation
                                                                                            Convenience) Stores
332210 Cutlery & Handtool Mfg               423500 Metal & Mineral (except                                               483000 Water Transportation
                                                    Petroleum)                     445120 Convenience Stores
332300 Architectural & Structural                                                  445210 Meat Markets                   Truck Transportation
          Metals Mfg                        423600 Electrical & Electronic Goods
                                                                                   445220 Fish & Seafood Markets         484110 General Freight Trucking,
332400 Boiler, Tank, & Shipping             423700 Hardware, & Plumbing &                                                           Local
                                                    Heating Equipment &            445230 Fruit & Vegetable Markets
          Container Mfg                                                                                                  484120 General Freight Trucking,
                                                    Supplies                       445291 Baked Goods Stores
332510 Hardware Mfg                                                                                                                 Long-distance
                                            423800 Machinery, Equipment, &         445292 Confectionery & Nut Stores
332610 Spring & Wire Product Mfg                    Supplies                                                             484200 Specialized Freight Trucking
                                                                                   445299 All Other Specialty Food
332700 Machine Shops; Turned                423910 Sporting & Recreational                  Stores                       Transit and Ground Passenger
          Product; & Screw, Nut, & Bolt             Goods & Supplies                                                     Transportation
                                                                                   445310 Beer, Wine, & Liquor Stores
          Mfg                                                                                                            485110 Urban Transit Systems
                                            423920 Toy & Hobby Goods &             Health and Personal Care Stores
332810 Coating, Engraving, Heat                     Supplies                                                             485210 Interurban & Rural Bus
          Treating, & Allied Activities                                            446110 Pharmacies & Drug Stores
                                            423930 Recyclable Materials                                                             Transportation
332900 Other Fabricated Metal                                                      446120 Cosmetics, Beauty Supplies,
                                            423940 Jewelry, Watch, Precious                 & Perfume Stores             485310 Taxi Service
          Product Mfg                                                                                                    485320 Limousine Service
                                                    Stone, & Precious Metals       446130 Optical Goods Stores
Machinery Manufacturing                                                                                                  485410 School & Employee Bus
                                            423990 Other Miscellaneous Durable     446190 Other Health & Personal
333100 Agriculture, Construction, &                 Goods                                                                           Transportation
          Mining Machinery Mfg                                                              Care Stores
                                                                                                                         485510 Charter Bus Industry

                                                                               -11-
Codes for Principal Business Activity and Principal Product or Service (continued)
Code                                         Code                                        Code                                        Code
485990 Other Transit & Ground                522298 All Other Nondepository              532210 Consumer Electronics &               Administrative and Support
         Passenger Transportation                      Credit Intermediation                      Appliances Rental                  and Waste Management and
Pipeline Transportation                      Activities Related to Credit                532220 Formal Wear & Costume
                                             Intermediation                                       Rental                             Remediation Services
486000 Pipeline Transportation
                                             522300 Activities Related to Credit         532230 Video Tape & Disc Rental             Administrative and Support Services
Scenic & Sightseeing Transportation                                                                                                  561110 Office Administrative
487000 Scenic & Sightseeing                            Intermediation (including loan    532290 Other Consumer Goods
                                                       brokers, check clearing, &                 Rental                                     Services
         Transportation                                                                                                              561210 Facilities Support Services
                                                       money transmitting)               532310 General Rental Centers
Support Activities for Transportation                                                                                                561300 Employment Services
                                             Securities, Commodity Contracts,            532400 Commercial & Industrial
488100 Support Activities for Air            and Other Financial Investments and                                                     561410 Document Preparation
         Transportation                                                                           Machinery & Equipment
                                             Related Activities                                   Rental & Leasing                           Services
488210 Support Activities for Rail           523110 Investment Banking &                                                             561420 Telephone Call Centers
         Transportation                                                                  Lessors of Nonfinancial Intangible
                                                       Securities Dealing                Assets (except copyrighted works)           561430 Business Service Centers
488300 Support Activities for Water          523120 Securities Brokerage                                                                     (including private mail centers
         Transportation                                                                  533110 Lessors of Nonfinancial
                                             523130 Commodity Contracts                           Intangible Assets (except                  & copy shops)
488410 Motor Vehicle Towing                            Dealing                                                                       561440 Collection Agencies
                                                                                                  copyrighted works)
488490 Other Support Activities for          523140 Commodity Contracts                                                              561450 Credit Bureaus
         Road Transportation
488510 Freight Transportation
                                                       Brokerage                         Professional, Scientific, and               561490 Other Business Support
                                             523210 Securities & Commodity               Technical Services                                  Services (including
         Arrangement                                   Exchanges                                                                             repossession services, court
488990 Other Support Activities for                                                      Legal Services
                                             523900 Other Financial Investment                                                               reporting, & stenotype
         Transportation                                Activities (including portfolio   541110 Offices of Lawyers                           services)
Couriers and Messengers                                management & investment           541190 Other Legal Services                 561500 Travel Arrangement &
492110 Couriers                                        advice)                           Accounting, Tax Preparation,                        Reservation Services
492210 Local Messengers & Local              Insurance Carriers and Related              Bookkeeping, and Payroll Services           561600 Investigation & Security
         Delivery                            Activities                                  541211 Offices of Certified Public                  Services
Warehousing and Storage                      524140 Direct Life, Health, & Medical                Accountants                        561710 Exterminating & Pest Control
493100 Warehousing & Storage                           Insurance & Reinsurance           541213 Tax Preparation Services                     Services
         (except lessors of                            Carriers                          541214 Payroll Services                     561720 Janitorial Services
         mini-warehouses &                   524150 Direct Insurance &                   541219 Other Accounting Services            561730 Landscaping Services
         self-storage units)                           Reinsurance (except Life,         Architectural, Engineering, and             561740 Carpet & Upholstery Cleaning
                                                       Health & Medical) Carriers        Related Services                                    Services
Information                                  524210 Insurance Agencies &                 541310 Architectural Services               561790 Other Services to Buildings &
Publishing Industries (except                          Brokerages                                                                            Dwellings
                                                                                         541320 Landscape Architecture
Internet)                                    524290 Other Insurance Related                       Services                           561900 Other Support Services
511110 Newspaper Publishers                            Activities (including                                                                 (including packaging &
                                                       third-party administration of     541330 Engineering Services
511120 Periodical Publishers                                                             541340 Drafting Services                            labeling services, &
                                                       insurance and pension funds)                                                          convention & trade show
511130 Book Publishers                       Funds, Trusts, and Other Financial          541350 Building Inspection Services                 organizers)
511140 Directory & Mailing List              Vehicles                                    541360 Geophysical Surveying &
          Publishers                                                                                                                 Waste Management and
                                             525100 Insurance & Employee                          Mapping Services                   Remediation Services
511190 Other Publishers                                Benefit Funds                     541370 Surveying & Mapping (except          562000 Waste Management &
511210 Software Publishers                   525910 Open-End Investment Funds                     Geophysical) Services                      Remediation Services
Motion Picture and Sound                               (Form 1120-RIC, U.S.              541380 Testing Laboratories
Recording Industries                                   Income Tax Return for             Specialized Design Services                 Educational Services
512100 Motion Picture & Video                          Regulated Investment              541400 Specialized Design Services
                                                       Companies)                                                                    611000 Educational Services
          Industries (except video                                                                (including interior, industrial,          (including schools, colleges,
          rental)                            525920 Trusts, Estates, & Agency                     graphic, & fashion design)                & universities)
512200 Sound Recording Industries                      Accounts                          Computer Systems Design and
Broadcasting (except Internet)               525990 Other Financial Vehicles             Related Services
                                                       (including mortgage REITs                                                     Health Care and Social
515100 Radio & Television                                                                541511 Custom Computer                      Assistance
          Broadcasting                                 and closed-end investment                  Programming Services
                                                       funds)                                                                        Offices of Physicians and Dentists
515210 Cable & Other Subscription                                                        541512 Computer Systems Design
          Programming                        “Offices of Bank Holding Companies”                  Services                           621111 Offices of Physicians (except
                                             and “Offices of Other Holding                                                                    mental health specialists)
Telecommunications                           Companies” are located under                541513 Computer Facilities
                                                                                                  Management Services                621112 Offices of Physicians, Mental
517000 Telecommunications                    Management of Companies (Holding                                                                 Health Specialists
          (including paging, cellular,       Companies) below.                           541519 Other Computer Related
          satellite, cable & other                                                                Services                           621210 Offices of Dentists
          program distribution,                                                          Other Professional, Scientific, and         Offices of Other Health Practitioners
          resellers, & other                 Real Estate and Rental and                  Technical Services                          621310 Offices of Chiropractors
          telecommunications, and            Leasing                                     541600 Management, Scientific, &            621320 Offices of Optometrists
          Internet service providers)        Real Estate                                          Technical Consulting               621330 Offices of Mental Health
 Data Processing Services                    531110 Lessors of Residential                        Services                                    Practitioners (except
518210 Data Processing, Hosting, &                    Buildings & Dwellings              541700 Scientific Research &                         Physicians)
          Related Services                            (including equity REITs)                    Development Services               621340 Offices of Physical,
Other Information Services                   531114 Cooperative Housing                  541800 Advertising & Related                         Occupational & Speech
519100 Other Information Services                     (including equity REITs)                    Services                                    Therapists, & Audiologists
          (including news syndicates &       531120 Lessors of Nonresidential            541910 Marketing Research & Public          621391 Offices of Podiatrists
          libraries, Internet publishing &            Buildings (except                           Opinion Polling                    621399 Offices of All Other
          broadcasting)                               Mini-warehouses) (including        541920 Photographic Services                         Miscellaneous Health
                                                      equity REITs)                                                                           Practitioners
                                                                                         541930 Translation & Interpretation
Finance and Insurance                        531130 Lessors of Mini-warehouses                    Services                           Outpatient Care Centers
                                                      & Self-Storage Units
Depository Credit Intermediation                      (including equity REITs)           541940 Veterinary Services                  621410 Family Planning Centers
522110 Commercial Banking                    531190 Lessors of Other Real Estate         541990 All Other Professional,              621420 Outpatient Mental Health &
522120 Savings Institutions                           Property (including equity                  Scientific, & Technical                     Substance Abuse Centers
522130 Credit Unions                                  REITs)                                      Services                           621491 HMO Medical Centers
522190 Other Depository Credit               531210 Offices of Real Estate Agents                                                    621492 Kidney Dialysis Centers
        Intermediation                                & Brokers                          Management of Companies                     621493 Freestanding Ambulatory
Nondepository Credit Intermediation          531310 Real Estate Property                 (Holding Companies)                                  Surgical & Emergency
522210 Credit Card Issuing                            Managers                           551111 Offices of Bank Holding                       Centers
522220 Sales Financing                       531320 Offices of Real Estate                      Companies                            621498 All Other Outpatient Care
                                                      Appraisers                         551112 Offices of Other Holding                      Centers
522291 Consumer Lending
                                             531390 Other Activities Related to                 Companies                            Medical and Diagnostic Laboratories
522292 Real Estate Credit (including
        mortgage bankers &                            Real Estate                                                                    621510 Medical & Diagnostic
        originators)                         Rental and Leasing Services                                                                      Laboratories
522293 International Trade Financing         532100 Automotive Equipment Rental
522294 Secondary Market Financing                     & Leasing

                                                                                     -12-
Codes for Principal Business Activity and Principal Product or Service (continued)
Code                                       Code                                        Code                                    Code
Home Health Care Services                  711510 Independent Artists, Writers,        722410 Drinking Places (Alcoholic       Personal and Laundry Services
621610 Home Health Care Services                     & Performers                             Beverages)                       812111 Barber Shops
Other Ambulatory Health Care               Museums, Historical Sites, and                                                      812112 Beauty Salons
Services                                   Similar Institutions                        Other Services                          812113 Nail Salons
621900 Other Ambulatory Health             712100 Museums, Historical Sites, &         Repair and Maintenance                  812190 Other Personal Care
           Care Services (including                  Similar Institutions              811110 Automotive Mechanical &                   Services (including diet &
           ambulance services & blood      Amusement, Gambling, and                             Electrical Repair &                     weight reducing centers)
           & organ banks)                  Recreation Industries                                Maintenance                    812210 Funeral Homes & Funeral
Hospitals                                  713100 Amusement Parks & Arcades            811120 Automotive Body, Paint,                   Services
622000 Hospitals                           713200 Gambling Industries                           Interior, & Glass Repair       812220 Cemeteries & Crematories
Nursing and Residential Care               713900 Other Amusement &                    811190 Other Automotive Repair &        812310 Coin-Operated Laundries &
Facilities                                           Recreation Industries                      Maintenance (including oil              Drycleaners
623000 Nursing & Residential Care                    (including golf courses, skiing            change & lubrication shops &   812320 Drycleaning & Laundry
           Facilities                                facilities, marinas, fitness               car washes)                             Services (except
                                                     centers, & bowling centers)       811210 Electronic & Precision                    Coin-Operated)
Social Assistance
                                                                                                Equipment Repair &             812330 Linen & Uniform Supply
624100 Individual & Family Services
624200 Community Food & Housing,
                                           Accommodation and Food                               Maintenance
                                                                                                                               812910 Pet Care (except Veterinary)
                                           Services                                    811310 Commercial & Industrial                   Services
           & Emergency & Other Relief                                                           Machinery & Equipment
           Services                        Accommodation                                        (except Automotive &           812920 Photofinishing
624310 Vocational Rehabilitation           721110 Hotels (except Casino Hotels)                 Electronic) Repair &           812930 Parking Lots & Garages
           Services                                & Motels                                     Maintenance                    812990 All Other Personal Services
624410 Child Day Care Services             721120 Casino Hotels                        811410 Home & Garden Equipment &        Religious, Grantmaking, Civic,
                                           721191 Bed & Breakfast Inns                          Appliance Repair &             Professional, and Similar
Arts, Entertainment, and                   721199 All Other Traveler                            Maintenance                    Organizations
Recreation                                         Accommodation                       811420 Reupholstery & Furniture         813000 Religious, Grantmaking,
Performing Arts, Spectator Sports,         721210 RV (Recreational Vehicle)                     Repair                                  Civic, Professional, & Similar
and Related Industries                             Parks & Recreational Camps          811430 Footwear & Leather Goods                  Organizations (including
                                           721310 Rooming & Boarding Houses                     Repair                                  condominium and
711100 Performing Arts Companies                                                                                                        homeowners associations)
711210 Spectator Sports (including         Food Services and Drinking Places           811490 Other Personal & Household
        sports clubs & racetracks)         722110 Full-Service Restaurants                      Goods Repair & Maintenance
711300 Promoters of Performing Arts,       722210 Limited-Service Eating
        Sports, & Similar Events                   Places
711410 Agents & Managers for               722300 Special Food Services
        Artists, Athletes, Entertainers,           (including food service
        & Other Public Figures                     contractors & caterers)




                                                                                   -13-
Index


                                                         Changes in Proportional                                   H                                                            Schedules K and K-1 – Partners’
10% interest . . . . . . . . . . . . . . . . . . 4         Interests . . . . . . . . . . . . . . . . . . . .   2   Hyperinflationary Exception . . . . 5                          Shares of Income, Deductions,
50% interest . . . . . . . . . . . . . . . . . . 4       Consolidated Return . . . . . . . . . . .             5                                                                  Credits, Etc. . . . . . . . . . . . . . . . . . 6
                                                         Constructive Ownership . . . . . . . .                4   I
A                                                        Control of a Corporation . . . . . . .                4   Identifying Numbers and                                      T
Acquisitions . . . . . . . . . . . . . . . . . . . 2     Corrections to Form 8865 . . . . . .                  4     Addresses . . . . . . . . . . . . . . . . . . 5            Tax Year . . . . . . . . . . . . . . . . . . . . . . 5
Analysis of partners’ capital                                                                                                                                                   Treaty-based Return
  accounts . . . . . . . . . . . . . . . . . . . . 7     D                                                                                                                        Positions . . . . . . . . . . . . . . . . . . . . 4
                                                                                                                   P
                                                         Definitions . . . . . . . . . . . . . . . . . . . . 3     Partnership . . . . . . . . . . . . . . . . . . . 3
B                                                        Dispositions . . . . . . . . . . . . . . . . . . . 2      Penalties . . . . . . . . . . . . . . . . . . . . . . 4      U
Balance sheets per books . . . . . . 7                                                                             Purpose of Form . . . . . . . . . . . . . . 1                U.S. Person . . . . . . . . . . . . . . . . . . . 4
                                                         E
C                                                        Exceptions to Filing . . . . . . . . . . . . 2            R                                                            W
Categories of Filers . . . . . . . . . . . . 2                                                                     Relief for Category 1 and 2                                  When To File . . . . . . . . . . . . . . . . . . 3
  Category 1 filer . . . . . . . . . 2, 5, 6             F                                                           filers . . . . . . . . . . . . . . . . . . . . . . . . 3   Who Must File . . . . . . . . . . . . . . . . . 1
  Category 2 filer . . . . . . . . . . . . 2, 5          Foreign Address . . . . . . . . . . . . . . . 5
  Category 3 filer . . . . . . . . . 2, 5, 6                                                                                                                                                                                      s
                                                         Foreign Partnership . . . . . . . . . . . 4               S
  Category 4 filer . . . . . . . . . . . . 2, 5
Change in a Proportional                                                                                           Schedule B – Income
  Interest . . . . . . . . . . . . . . . . . . . . . 4   G                                                           Statement – Trade or Business
                                                         General Reporting Instructions for                          Income . . . . . . . . . . . . . . . . . . . . . 6
                                                           Schedule K-1 . . . . . . . . . . . . . . . 7




                                                                                                               -14-