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Schedule B-1 (Form 1065) (Rev. 9-2017) Page 2
General Instructions Example 1. Corporation A owns, directly, an interest of 50%
in the profit, loss, or capital of Partnership B. Corporation A
Section references are to the Internal Revenue Code unless also owns, directly, an interest of 15% in the profit, loss, or
otherwise noted. capital of Partnership C. Partnership B owns, directly, an
interest of 70% in the profit, loss, or capital of Partnership C.
Future Developments Therefore, Corporation A owns, directly or indirectly, an
For the latest information about developments related to interest of 50% in the profit, loss, or capital of Partnership C
Schedule B-1 (Form 1065) and its instructions, such as (15% directly and 35% indirectly through Partnership B). On
legislation enacted after the form and instructions were Partnership C’s Form 1065, it must answer “Yes” to question
published, go to www.irs.gov/Form1065. 3a of Schedule B. Partnership C must also complete Part I of
Schedule B-1. In Part I, Partnership C must identify Corporation
Purpose of Form A, which includes entering “50%” in column (v) (its maximum
percentage owned). It also must identify Partnership B, and
Use Schedule B-1 (Form 1065) to provide the information enter “70%” in column (v).
applicable to certain entities, individuals, and estates that own,
directly or indirectly, an interest of 50% or more in the profit, Part II
loss, or capital of the partnership.
Complete Part II if the partnership answered “Yes” to Form
Who Must File 1065, Schedule B, question 3b. List each individual or estate
owning, directly or indirectly, an interest of 50% or more in the
Schedule B-1 (Form 1065) must be filed by all partnerships that profit, loss, or capital of the partnership at the end of the tax
answer “Yes” to question 3a or question 3b on Schedule B of year. Enter the name, social security or employer identification
Form 1065. Attach Schedule B-1 to Form 1065. number, country of citizenship (for an estate, the citizenship of
the decedent), and the maximum percentage interests owned,
Specific Instructions directly or indirectly, in the profit, loss, or capital of the
partnership.
Part I Example 2. A owns, directly, 50% of the profit, loss, or capital
Complete Part I if the partnership answered “Yes” to Form of Partnership X. B, the daughter of A, does not own, directly,
1065, Schedule B, question 3a. List each corporation, any interest in X and does not own, indirectly, any interest in X
partnership, trust, tax-exempt organization, or foreign through any entity (corporation, partnership, trust, or estate).
government owning, directly or indirectly, an interest of 50% or Because family attribution rules apply only when an individual
more in the profit, loss, or capital of the partnership at the end (in this example, B) owns a direct interest in the partnership or
of the tax year. Enter the name, EIN, type of entity (corporation, an indirect interest through another entity, A’s interest in
partnership, trust, tax-exempt organization, or foreign Partnership X is not attributable to B. On Partnership X’s Form
government), country of organization, and the maximum 1065, it must answer “Yes” to question 3b of Schedule B.
percentage interests owned, directly or indirectly, in the profit, Partnership X must also complete Part II of Schedule B-1. In
loss, or capital of the partnership. For an affiliated group filing a Part II, Partnership X must identify A, which includes entering
consolidated tax return, list the parent corporation rather than “50%” in column (iv). Partnership X will not identify B in Part II.
the subsidiary members. List the entity owner of a disregarded
entity rather than the disregarded entity. If the owner of a
disregarded entity is an individual rather than an entity, list the
individual in Part II. In the case of a tax-exempt organization,
enter “tax-exempt organization” in column (iii).
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