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                                                                                                   Department of the Treasury
                                                                                                   Internal Revenue Service
2022

Instructions for Form 8865

Return of U.S. Persons With Respect to Certain Foreign Partnerships

Section references are to the Internal             Future Developments                     an eligible partner to claim a foreign 
Revenue Code unless otherwise noted.                                                       tax credit.
                                                   For the latest information about 
Contents                                    Page   developments related to Form 8865, 
General Instructions .  . . . . . . . . . . . . 1  its schedules, and its instructions,    General Instructions
Specific Instructions . . . . . . . . . . . . . 7  such as legislation enacted after they  Only the general instructions for 
Schedule A. Constructive                           were published, go to IRS.gov/          Schedules B, K, K-1, M-1, and M-2 
Ownership of Partnership                           Form8865.                               are included later in these 
Interest .    . . . . . . . . . . . . . . . .   10                                         instructions. If you are required to 
Schedule A-1. Certain Partners of                                                          complete these schedules for Form 
Foreign Partnership .         . . . . . . . .   10 What’s New
Schedule A-2. Foreign Partners of                  See What’s New in the Instructions for  8865, use the specific instructions for 
Section 721(c) Partnership .            . . .   10 Form 1065 for changes and new           the corresponding schedules of Form 
Schedule A-3. Affiliation                          Internal Revenue Code sections that     1065, U.S. Return of Partnership 
Schedule .      . . . . . . . . . . . . . . .   10 may affect foreign partnerships with    Income.
Schedule B. Income                                 fiscal years, corporate partners, or 
Statement—Trade or 
Business Income           . . . . . . . . . .   10 certain impacted activities.            IF you are          THEN use the 
Schedule D. Capital Gains and                                                              completing Form     instructions for 
Losses .      . . . . . . . . . . . . . . . .   11 Reminders                               8865...             Form 1065...
Schedule G (Form 8865).                            Schedules K-2 (Form 8865) and           Schedule B          page 1 (income and 
Statement of Application of                        K-3 (Form 8865) for partnerships.                           deductions).
the Gain Deferral Method                           For tax years beginning after 2020,     Schedules K and K-1 Schedules K and K-1.
Under Section 721(c) .          . . . . . . .   11
Schedule H (Form 8865).                            most items of international tax 
Acceleration Events and                            relevance are reported on Schedules     Schedule K-3        Schedule K-3.
Exceptions Reporting                               K-2 and K-3, replacing prior reporting  Schedule L          Schedule L.
Relating to Gain Deferral                          on Form 8865, Schedules K and K-1,      Schedule M-1        Schedule M-1.
Method Under Section                               line 16, Foreign transactions, and 
721(c) .    . . . . . . . . . . . . . . . . .   13                                         Schedule M-2        Schedule M-2.
Schedules K, Partners' Distributive                certain reporting on Form 8865, 
Share Items, and K-1 (Form                         Schedules K and K-1, line 20, Other 
8865), Partner’s Share of                          information.
Income, Deductions, Credits,                                                               Note. If you are reporting capital 
etc.    . . . . . . . . . . . . . . . . . . .   15    The schedules are designed to 
                                                                                           gains and losses, use Schedule D 
Schedules K-2 (Form 8865),                         provide greater clarity for partners on 
                                                                                           (Form 1065). See the Instructions for 
Partners’ Distributive Share                       how to compute their U.S. income tax 
                                                                                           Schedule D (Form 1065).
Items—International, and K-3                       liability regarding items of 
(Form 8865), Partner’s Share 
of Income, Deductions,                             international tax relevance, including  Purpose of Form
Credits, etc.—International  .          . . .   16 claiming deductions and credits. Go     Use Form 8865 to report the 
Schedule L. Balance Sheets per                     to IRS.gov for the schedules and the    information required under section 
Books .     . . . . . . . . . . . . . . . . .   16 Instructions for Schedules K-2 and      6038 (reporting with respect to 
Schedule M. Balance Sheets for                     K-3 (Form 8865) for more information.   controlled foreign partnerships), 
Interest Allocation .       . . . . . . . . .   17 Form 8865, Schedules K and K-1,         section 6038B (reporting of transfers 
Schedule M-1. Reconciliation of                    retain line 16 for the partnership to   to foreign partnerships), or section 
Income (Loss) per Books With 
Income (Loss) per Return .            . . . .   17 check a box indicating that it has      6046A (reporting of acquisitions, 
Schedule M-2. Analysis of                          items of international tax relevance    dispositions, and changes in foreign 
Partners' Capital Accounts            . . . .   17 and that it completed Schedules K-2     partnership interests).
Schedule N. Transactions                           and K-3. For purposes of basis 
Between Controlled Foreign                         adjustments and to reconcile income,    Who Must File
Partnership and Partners or                        Form 8865 retains total foreign taxes   A U.S. person qualifying under one or 
Other Related Entities          . . . . . . .   17
Schedule O (Form 8865). Transfer                   paid or accrued but moves this          more of the Categories of Filers (see 
of Property to a Foreign                           reporting to Schedule K, line 21. See   below) must complete and file Form 
Partnership .       . . . . . . . . . . . . .   17 the Instructions for Form 1065 for      8865. These instructions and the 
Schedule P (Form 8865).                            amounts to report on line 21.           Filing Requirements for Categories of 
Acquisitions, Dispositions,                                                                Filers chart, later, explain the 
and Changes of Interests in a                      Important.  Foreign taxes paid or 
Foreign Partnership .         . . . . . . . .   19 accrued must be reported on             information, statements, and 
List of Codes . . . . . . . . . . . . . . . .   21 Schedules K-2 and K-3 for purposes      schedules required for each category 
Index . . . . . . . . . . . . . . . . . . . . . 27 of reporting information necessary for  of filer. If you qualify under more than 
                                                                                           one category for a particular foreign 

Feb 6, 2023                                                  Cat. No. 26053N

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partnership, you must submit all the                 required to attach a copy of the Form      and 1.721(c)-6(c)(2). See U.S. 
items required for each category                     8832 to the tax return to which the        transferor, later.
under which you qualify.                             Form 8865 is being attached.
Example.        If you qualify as a                                                             Categories of Filers
                                                          If a domestic section 721(c) 
Category 2 and a Category 3 filer, you                                                          Category 1 filer. A Category 1 filer is 
                                                     partnership is formed on or after 
must submit all the schedules                                                                   a U.S. person who controlled the 
                                                     January 18, 2017, and the gain 
required of Category 2 filers (page 1                                                           foreign partnership at any time during 
                                                     deferral method is applied, then a 
of Form 8865, and Schedules A, A-2,                                                             the partnership's tax year. Control of a 
                                                     U.S. transferor must file Form 8865 
N, K-1, and K-3) plus any additional                                                            partnership is ownership of more than 
                                                     with respect to that partnership. See 
schedules that Category 3 filers are                                                            a 50% interest in the partnership. See 
                                                     Regulations section 1.721(c)-6(b)(4). 
required to submit (Schedules A-1                                                               the definition of 50% interest, later. 
                                                     See Section 721(c) partnership Gain , 
and O).                                                                                         There may be more than one 
                                                     deferral method, and U.S. transferor, 
Complete a separate Form 8865                        later.                                     Category 1 filer for a partnership for a 
and the applicable schedules for each                                                           particular partnership tax year. See 
foreign partnership.                                      A U.S. transferor that is required to U.S. person and Foreign partnership, 
                                                     provide information with respect to a      later.
File the 2022 Form 8865 with your                    partnership under Regulations              A Category 1 filer also includes a 
income tax return for your tax year                  sections 1.721(c)-6(b)(2)(iv) and          U.S. transferor who must report 
beginning in 2022.                                   1.721(c)-6(b)(3)(xi) must file a           certain information with respect to a 
If a Form 8832, Entity Classification                separate Form 8865 (along with all         section 721(c) partnership for the tax 
Election, was filed for this entity for the          necessary schedules and                    year of contribution and subsequent 
current tax year, see When To File                   attachments) for each partnership          years, pursuant to Regulations 
and Where To File in the instructions                treated as a U.S. transferor under         section 1.721(c)-6. A Category 1 filer 
for Form 8832 to determine if you are                Regulations sections 1.721(c)-3(d)         fulfills this reporting requirement by 
Filing Requirements for Categories of Filers
                                                                                                      Category of Filers
                                  Filing Requirements
                                                                                            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-3—Affiliation Schedule
 Schedule B—Income Statement—Trade or Business Income
 Schedule G (Form 8865)—Statement of Application of the Gain Deferral Method Under Section 
721
 Schedule H (Form 8865)—Acceleration Events and Exceptions Reporting Relating to Gain 
Deferral Method Under Section 721(c)
 Schedule K—Partners' Distributive Share Items
 Schedule K-2 (Form 8865)—Partners’ Distributive Share Items—International
 Schedule K-3 (Form 8865)—Partner’s Share of Income, Deductions, Credits, etc.—International
 Schedule L—Balance Sheets per Books
 Schedule M—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 D—Schedule D (Form 1065), Capital Gains and Losses
 Schedule K-1 (Form 8865)—Partner's Share of Income, Deductions, Credits, etc. (direct 
partners only)
 Schedule O (Form 8865)—Transfer of Property to a Foreign Partnership
 Schedule P (Form 8865)—Acquisitions, Dispositions, and Changes of Interests in a Foreign 
Partnership

                                                                          -2-                         Instructions for Form 8865 (2022)

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filing Schedule G and, in certain that transfer under section 6038B, if decreased by at least a 10% interest
circumstances, Schedule H. See the foreign partnership disposed of (for example, from 21% to 11%).
Section 721(c) partnership and U.S. such property while the U.S. person A disposition of a section 721(c)
transferor, later. remained a direct or indirect partner in partnership interest may be an
the partnership.
Category 2 filer. A Category 2 filer is acceleration event for purposes of
a U.S. person who at any time during Category 4 filer. A Category 4 filer is applying the gain deferral method.
the tax year of the foreign partnership a U.S. person that had a reportable The U.S. transferor may be required
owned a 10% or greater interest in the event under section 6046A during that to recognize gain in an amount equal
partnership while the partnership was person's tax year. There are three to the remaining built-in gain on the
controlled by U.S. persons each categories of reportable events under section 721(c) property previously
owning at least a 10% interest. section 6046A: acquisitions, contributed to the section 721(c)
However, if the foreign partnership dispositions, and changes in partnership. See Regulations section
had a Category 1 filer at any time proportional interests. 1.721(c)-4. For acceleration events
during that tax year, no person will be exceptions, see Regulations section
Acquisitions. A U.S. person that
considered a Category 2 filer. See the 1.721(c)-5. See the specific
acquires a foreign partnership interest
definition of a 10% interest, later. instructions for Schedule H, later.
has a reportable event if:
Category 3 filer. A Category 3 filer is • The person didn’t own a 10% or Changes in proportional
a U.S. person who contributed greater direct interest in the interests. A U.S. person has a
property during that person's tax year partnership and, as a result of the reportable event if compared to the
to a foreign partnership in exchange acquisition, the person owns a 10% or person's direct proportional interest
for an interest in the partnership (a greater direct interest in the the last time the person had a
section 721 transfer), if that person partnership (for example, from 9% to reportable event, the person's direct
either: 10%). For purposes of this rule, an proportional interest has increased or
1. Owned directly or constructively acquisition includes an increase in a decreased by at least the equivalent
at least a 10% interest in the foreign person's direct proportional interest of a 10% interest in the partnership.
partnership immediately after the (see Changes in proportional Special rule for a partnership
contribution, or interests, later); or interest owned on December 31,
2. The value of the property • Compared to the person's direct 1999. If the U.S. person owned at
interest when the person last had a
contributed (when added to the value least a 10% direct interest in the
reportable event, after the acquisition
of any other property contributed to foreign partnership on December
the person's direct interest has
the partnership by such person, or 31,1999, then comparisons should be
increased by at least a 10% interest
any related person, during the made to the person's direct interest on
(for example, from 11% to 21%).
12-month period ending on the date of December 31,1999. Once the person
An acquisition of a section 721(c)
transfer) exceeds $100,000. has a reportable event after
partnership interest may be an December 31,1999, future
If a domestic partnership acceleration event exception under comparisons should be made by
contributes property to a foreign the gain deferral method. See reference to the last reportable event.
partnership, the domestic Regulations section 1.721(c)-5. In this
partnership's partners are considered case, the acquirer may become a Exceptions to Filing
to have transferred a proportionate successor U.S. transferor and may Multiple Category 1 filers. If during
share of the contributed property to have a reporting requirement under the tax year of the partnership more
the foreign partnership. However, if Regulations section 1.721(c)-6. See than one U.S. person qualifies as a
the domestic partnership files Form the specific instructions for Category 1 filer, only one of these
8865 and properly reports all the Schedule H, later. Category 1 partners is required to file
required information with respect to Form 8865. A U.S. person with a
the contribution, its partners will not Dispositions. A U.S. person that
disposes of a foreign partnership controlling interest in the losses or
be required to report the transfer. deductions of the partnership isn’t
interest has a reportable event if:
A Category 3 filer includes a U.S. • The person owned a 10% or permitted to be the filer of Form 8865
transferor who (i) contributes section greater direct interest in the if another U.S. person has a
721(c) property to a section 721(c) partnership before the disposition controlling interest in capital or profits;
partnership, and (ii) has reporting and, as a result of the disposition, the only the latter may file the return. The
requirements pursuant to Regulations person owns less than a 10% direct U.S. person that files the Form 8865
section 1.721(c)-6(b)(2). The interest (for example, from 10% to must complete item F on page 1.
Category 3 filer fulfills this reporting 8%). For purposes of this rule, a The single Form 8865 to be filed
requirement by filing Schedule G, in disposition includes a decrease in a must contain all of the information that
addition to Schedule O, and, in certain person's direct proportional interest; would be required if each Category 1
circumstances, Schedule H. See or filer filed a separate Form 8865.
Section 721(c) property, later. • Compared to the person's direct Specifically, separate Schedules N,
Category 3 also includes a U.S. interest when the person last had a K-1, and K-3 (if applicable) must be
person that previously transferred reportable event, after the disposition attached to the Form 8865 for each
appreciated property to the the person's direct interest has Category 1 filer. Also, items B, C, and
partnership and was required to report D on page 1 and Schedule A on

Instructions for Form 8865 (2022) -3-

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page 2 of Form 8865 must be 2. The U.S. person through which Exception for certain Category 4
completed for each Category 1 filer the indirect partner constructively filers. If you qualify as a Category 3
not filing the form. Attach a separate owns an interest in the foreign and 4 filer because you contributed
statement listing this information to partnership is also a constructive property to a foreign partnership in
the single Form 8865. owner and meets all the requirements exchange for a 10% or greater interest
A Category 1 filer not filing Form of this constructive ownership filing in that partnership, you aren’t required
8865 must attach a statement entitled exception, or to report this transaction under both
“Controlled Foreign Partnership 3. Form 8865 is filed for the Category 3 and 4 filing requirements.
Reporting” to that person's income tax foreign partnership by another If you properly report the contribution
return. Category 1 filer under the multiple of property under the Category 3
The statement must include the Category 1 filers exception. rules, you aren’t required to report it
as a Category 4 filer. However, the
following information. To qualify for the constructive
acquisition will count as a reportable
• A statement that the person ownership filing exception, the indirect
event to determine if a later change in
qualified as a Category 1 filer, but is partner must file with its income tax
your partnership interest qualifies as a
not submitting Form 8865 under the return a statement entitled “Controlled
reportable event under Category 4.
multiple Category 1 filers exception. Foreign Partnership Reporting.”
• The name, address, and identifying Example. Partner A doesn’t own
This statement must contain the
number (if any) of the foreign an interest in FPS, a foreign
following information.
partnership of which the person partnership. Partner A transfers
qualified as a Category 1 filer. 1. A statement that the indirect property to FPS in exchange for a
• A statement that the filing partner was required to file Form 15% direct interest. Partner A qualifies
requirement has been or will be 8865, but isn’t doing so under the as a Category 3 filer because he
satisfied. constructive owners exception. transferred property to a foreign
• The name and address of the 2. The names and addresses of partnership and owned at least a 10%
person filing Form 8865 for this the U.S. persons whose interests the interest in FPS immediately after the
partnership. indirect partner constructively owns. contribution. Partner A is also a
• The Internal Revenue Service 3. The name and address of the Category 4 filer because he didn’t own
Center where the Form 8865 must be foreign partnership for which the a 10% or greater direct interest in FPS
filed (or indicate “electronic filing” if indirect partner would have had to and as a result of the acquisition now
the Form 8865 has been or will be have filed Form 8865 but for this owns a 10% or greater direct interest
filed electronically). exception. in FPS. If Partner A properly reports
the contribution on Form 8865 as a
A U.S. person who qualifies 4. If the indirect partner is a
Category 3 filer, Partner A isn’t
! for this exception to the domestic corporation, a statement
required to report his acquisition of the
CAUTION Category 1 filing requirement setting forth all the information that the
15% interest in FPS as a Category 4
would still have to file a separate Form indirect partner would have had to
filer.
8865 if that person is also subject to provide in response to questions G8a
the filing requirements of Category 3 and G8b on Form 8865. See Item Relief for Category 1 and 2
or 4. This separate Form 8865 would H10. Separate Units Note, later, for Filers When the Foreign
include all the information required for more information. Partnership Files Form 1065
a Category 3 filer, a Category 4 filer,
or a U.S. transferor who must report Members of an affiliated group of If a foreign partnership files Form
certain information with respect to a corporations filing a consolidated 1065 for its tax year, Category 1 and 2
section 721(c) partnership for the year return. If one or more members of an filers may use a copy of the
of contribution and subsequent years, affiliated group of corporations filing a completed Form 1065 schedules in
pursuant to Regulations section consolidated return qualify as place of the equivalent schedules of
1.721(c)-6, in addition to the Category 1 or 2 filers for a particular Form 8865.
“Controlled Foreign Partnership foreign partnership, the common If you file Form 8865 with an
Reporting” statement. parent corporation may file one Form electronically filed income tax return,
8865 on behalf of all of the members see the electronic filing publications
Constructive owners. See of the group required to report. Except identified in the instructions for your
Constructive ownership, later. A for group members who also qualify income tax return for more
Category 1 or 2 filer that doesn’t own under the constructive owners information.
a direct interest in the partnership and exception, the Form 8865 must
See the first paragraph under
that is required to file this form solely contain all the information that would
General Instructions, earlier, for the
because of constructive ownership have been required to be submitted if
Form 1065 schedules that are
from a U.S. person(s) isn’t required to each group member filed its own
equivalent to the Form 8865
file Form 8865 if: Form 8865.
schedules.
1. Form 8865 is filed by the U.S. Exception for certain trusts. Trusts
Example. Partner A is a Category
person(s) through which the indirect relating to state and local government
1 filer with respect to FPS, a foreign
partner constructively owns an employee retirement plans aren’t
partnership, during the 2022 tax year.
interest in the foreign partnership, required to file Form 8865.
FPS completes and files a Form 1065
for its 2022 tax year. Instead of
-4- Instructions for Form 8865 (2022)

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completing Schedules B, K, K-2, L, The term “partnership” includes a of section 721(c) property to a section
M-1, M-2, and K-1 and K-3 of Form limited partnership, syndicate, group, 721(c) partnership with respect to
8865, Partner A may attach to its pool, joint venture, or other which the recognition of gain is
Form 8865 page 1 of Form 1065 and unincorporated organization, through deferred under the gain deferral
Form 1065 Schedules K, K-2, L, M-1, or by which any business, financial method. See Regulations section
M-2, and K-1 and K-3 (including the operation, or venture is carried on, 1.721(c)-1(b)(7).
Schedules K-1 and K-3 for Partner A that isn’t, within the meaning of the
Gain deferral method. The gain
and all other U.S. persons owning regulations under section 7701, a
deferral method is the method
10% or greater direct interests in corporation, trust, estate, or sole
described in Regulations section
FPS). Partner A must complete the proprietorship.
1.721(c)-3(b) applied to avoid the
following items and schedules on A joint undertaking merely to share immediate recognition of gain upon a
Form 8865. expenses isn’t a partnership. Mere contribution of section 721(c) property
• The first and second pages. co-ownership of property that is to a section 721(c) partnership under
• Schedule A. maintained and leased or rented isn’t Regulations section 1.721(c)-2(b).
• Schedule A-1. a partnership. However, if the
• Schedule A-2. co-owners provide services to the 50% interest. A 50% interest in a
• Schedule A-3. tenants, a partnership exists. partnership is an interest equal to:
• Schedule G (Form 8865). • 50% of the capital,
• Schedule H (Form 8865). Foreign partnership. A foreign • 50% of the profits, or
• Schedule M. partnership is a partnership that isn’t • 50% of the deductions or losses.
• Schedule N. created or organized in the United For purposes of determining a 50%
States or under the law of the United interest, the constructive ownership
Example. Partner A is a Category States or of any state or the District of rules described below apply.
2 filer with respect to FPS, a foreign Columbia. If a domestic section
partnership. If FPS completes and 721(c) partnership is formed on or 10% interest. A 10% interest in a
files a Form 1065 for its 2022 tax year, after January 18, 2017, and the gain partnership is an interest equal to:
Partner A may file with Form 8865 the deferral method is applied, then the • 10% of the capital,
Schedules K-1 and K-3 (Form 1065) section 721(c) partnership is treated • 10% of the profits, or
that it receives from the partnership as a foreign partnership for purposes • 10% of the deductions or losses.
instead of Schedules K-1 and K-3 of Form 8865 and these instructions. For purposes of determining a 10%
(Form 8865). Partner A must See Regulations section 1.721(c)-6(b) interest, the constructive ownership
complete the following items and (4). rules described below apply.
schedules on Form 8865. Constructive ownership. For
• The first and second pages. Section 721(c) partnership. A
• Schedule A. partnership (domestic or foreign) is a purposes of determining an interest in
• Schedule A-2. section 721(c) partnership if there is a a partnership, the constructive
• Schedule N. contribution of section 721(c) property ownership rules of section 267(c)
to the partnership and, after the (excluding section 267(c)(3)) apply,
When and Where To File contribution (and all transactions taking into account that such rules
Attach Form 8865 to your income tax related to the contribution), (A) a refer to corporations and not to
return (or, if applicable, partnership or related foreign person with respect to partnerships. Generally, an interest
exempt organization return) and file the U.S. transferor is a direct or owned directly or indirectly by or for a
both by the due date (including indirect partner in the partnership; and corporation, partnership, estate, or
extensions) for that return. If you don’t (B) the U.S. transferor and related trust shall be considered as being
have to file an income tax return, you persons own 80% or more of the owned proportionately by its owners,
must file Form 8865 separately with interests in partnership capital, profits, partners, or beneficiaries.
the IRS at the time and place you deductions, or losses. See Also, an individual is considered to
would be required to file an income Regulations section 1.721(c)-1(b)(14). own an interest owned directly or
tax return (or, if applicable, a indirectly by or for their family. The
U.S. transferor. A U.S. transferor is
partnership or exempt organization family of an individual includes only
a U.S. person other than a domestic
return). See below for penalties that that individual's spouse, siblings,
partnership. See Regulations section
may apply if you don’t file Form 8865 ancestors, and lineal descendants. An
1.721(c)-1(b)(18).
on time. interest will be attributed from a
Section 721(c) property. Section nonresident alien individual under the
Definitions 721(c) property is property (other than family attribution rules only if the
Partnership. A partnership is the excluded property) with built-in gain person to whom the interest is
relationship between two or more that is contributed to a partnership by attributed owns a direct or indirect
persons who join to carry on a trade or a U.S. transferor, including pursuant interest in the foreign partnership
business, with each person to a contribution described in under section 267(c)(1) or (5).
contributing money, property, labor, or Regulations section 1.721(c)-2(d)
U.S. person. A U.S. person is a
skill and each expecting to share in (partnership look-through rule). See citizen or resident of the United
the profits and losses of the business Regulations section 1.721(c)-1(b)(15). States, a domestic partnership, a
whether or not a formal partnership Gain deferral contribution. A gain domestic corporation, and any estate
agreement is made. deferral contribution is a contribution

Instructions for Form 8865 (2022) -5-

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or trust that isn’t foreign. See section   expired. See section 6038 (and the          States (such as an income tax treaty, 
7701(a)(30).                               underlying regulations) for the             an estate and gift tax treaty, or a 
                                           maximum reduction, the exception            friendship, commerce, and navigation 
Control of a corporation.  For 
                                           due to reasonable cause, and the            treaty):
purposes of Schedule N, control of a 
                                           limits on the amount of these 
corporation is ownership of stock                                                      • Overrides or modifies any provision 
                                           penalties.                                  of the Internal Revenue Code, and
possessing more than 50% of the total 
combined voting power, or more than        • Criminal penalties under sections         • Causes (or potentially causes) a 
                                           7203, 7206, and 7207 may apply for          reduction of any tax incurred at any 
50% of the total value of shares of all 
                                           failure to file or for filing false or      time.
classes of stock of the corporation. 
                                           fraudulent information.
For rules concerning indirect                                                            Failure to make such a report may 
ownership and attribution, see               Additionally, any person that files       result in a $1,000 penalty ($10,000 in 
Regulations section 1.6038-2(c).           under the constructive owners               the case of a C corporation). See 
                                           exception may be subject to these           section 6712.
Change in a proportional interest.         penalties if all the requirements of the 
                                                                                       Section 6662(j).  Penalties may be 
A partner's proportional interest in a     exception aren’t met. Any person 
                                                                                       imposed for underpayment 
foreign partnership can change as a        required to file Form 8865 who 
                                                                                       attributable to undisclosed foreign 
result of changes in other partners'       doesn’t file under the multiple 
                                                                                       financial asset understatements. The 
interests, for example, when another       Category 1 filers exception may be 
                                                                                       term “undisclosed foreign financial 
partner withdraws from the                 subject to the above penalties if the 
                                                                                       asset” with respect to any tax year 
partnership. A partner's proportional      other person doesn’t file a correctly 
                                                                                       includes any asset with respect to 
interest can also change, for example,     completed form and schedules. See 
                                                                                       which required information was not 
by operation of the partnership            Exceptions to Filing, earlier.
agreement (for example, if the                                                         provided. An "undisclosed foreign 
partnership agreement provides that a      Failure to file information required        financial asset understatement" 
partner's interest in profits will change  of Category 3 filers.  Any person           means for any tax year, the portion of 
on a set date or when the partnership      that fails to properly report a             the understatement for that tax year 
has earned a specified amount of           contribution to a foreign partnership       which is attributable to any transaction 
profits, then the partner's proportional   that is required to be reported under       involving an undisclosed foreign 
interest changes when the set date or      section 6038B and the regulations           financial asset. No penalty will be 
specified amount of profits is             under that section is subject to a          imposed with respect to any portion of 
reached).                                  penalty equal to 10% of the fair            an underpayment if the taxpayer can 
                                           market value (FMV) of the property at       demonstrate that the failure to comply 
Penalties                                  the time of the contribution. This          was due to reasonable cause with 
Failure to timely submit all infor-        penalty is subject to a $100,000 limit,     respect to such portion of the 
mation required of Category 1 and          unless the failure is due to intentional    underpayment and the taxpayer acted 
2 filers.                                  disregard. In addition, the transferor      in good faith with respect to such 
• A $10,000 penalty is imposed for         must recognize gain on the                  portion of the underpayment. See 
each tax year of each foreign              contribution as if the contributed          sections 6662(j) and 6664(c) for 
partnership for failure to furnish the     property had been sold for its FMV.         additional information.
required information within the time       See section 6038B for the exception 
                                                                                       Failure to comply with a require-
prescribed. If the information isn’t filed due to reasonable cause.
                                                                                       ment of the gain deferral method. 
within 90 days after the IRS has           Failure to file information required        Failure to comply with a requirement 
mailed a notice of the failure to the      of Category 4 filers.  Any person           of the gain deferral method, including 
U.S. person, an additional $10,000         who fails to properly report all the        a failure to comply with the procedural 
penalty (per foreign partnership) is       information requested by section            and reporting requirements imposed 
charged for each 30-day period, or         6046A is subject to a $10,000 penalty,      under Regulations sections 1.721(c)-3 
fraction thereof, during which the         in addition to the section 7203             and 1.721(c)-6 and section 6038B, 
failure continues after the 90-day         criminal penalty, unless it is shown        may result in an acceleration event 
period has expired. The additional         that such failure is due to reasonable      under Regulations section 
penalty is limited to a maximum of         cause. If the failure continues for more    1.721(c)-4(b)(2) and a penalty under 
$50,000 for each failure.                  than 90 days after the IRS mails            section 6038B. See the specific 
• Any person who fails to furnish all of   notice of the failure, an additional        instructions for Schedule G and 
the information required within the        $10,000 penalty will apply for each         Schedule H, later.
time prescribed will be subject to a       30-day period (or fraction thereof) 
reduction of 10% of the foreign taxes      during which the failure continues          Corrections to Form 8865
available for credit under sections 901    after the 90-day period has expired.        If you file a Form 8865 that you later 
and 960. If the failure continues 90       The additional penalty shall not            determine is incomplete or incorrect, 
days or more after the date the IRS        exceed $50,000.                             file a corrected Form 8865 with an 
mails notice of the failure, an                                                        amended tax return following the 
additional 5% reduction is made for        Treaty-based return positions.         File instructions for the return with which 
each 3-month period, or fraction           Form 8833, Treaty-Based Return              you originally filed Form 8865. Enter 
thereof, during which the failure          Position Disclosure Under Section           “corrected” at the top of the form and 
continues after the 90-day period has      6114 or 7701(b), to report a return 
                                           position that a treaty of the United 

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attach a statement identifying and Foreign address. Enter the other persons under the multiple
explaining the changes. information in the following order: city Category 1 filers exception, or are
or town, state or province, and reporting information about members
Specific Instructions country. Follow the country's practice of your affiliated group of corporations
for entering the postal code, if any. under the consolidated return
Important: All information must be in Don’t abbreviate the country name. exception (see Exceptions to Filing,
earlier), identify each such person in
English. All amounts must be stated in Item A. Category of Filer item F. List their names, addresses,
U.S. dollars.
Check the box for each category that and identifying numbers. Also,
If the information required in a describes the person filing the form. If indicate whether each person is a
given section exceeds the space more than one category applies, Category 1 filer or Category 2 filer,
provided within that section, attach a check all boxes that apply. See and whether such person
separate statement(s) to provide the Categories of Filers, earlier. constructively owned an interest in the
remaining information, using the same foreign partnership during the tax year
size and format as the printed forms. Item C of the partnership listed at the top of
Fill in all applicable lines and Enter the filer's share of nonrecourse Form 8865, page 1. See Constructive
schedules. All categories of filers liabilities, partnership-level qualified ownership, earlier.
must complete all items on pages 1 nonrecourse financing, and other
and 2, with three exceptions. liabilities. Nonrecourse liabilities are Item G1
Complete item E only if, in addition to those liabilities of the partnership for For the foreign partnership's address,
filing the form on your own behalf, you which no partner bears the economic enter the city or town, state or
are reporting information about other risk of loss. The extent to which a province, and the foreign country in
Category 1 filers under the multiple partner bears the economic risk is that order. Follow the foreign country's
Category 1 filers exception, or you are determined under the rules of practice in placing the postal code in
reporting information about members Regulations section 1.752-2. the address. Don’t abbreviate the
country name. If the partnership
of your affiliated group of corporations "Qualified nonrecourse financing" receives its mail in care of a third party
under the consolidated return generally includes financing: (such as an accountant or attorney),
exception. Only Category 1 and 2 • For which no one is personally enter “C/O” followed by the third
filers are required to complete item liable for repayment; party's name and street address or
H8. See Exceptions to Filing, earlier. • That is borrowed for use in an P.O. box.
Answer items H10 and H11 only if you activity of holding real property; and
are a Category 1 filer. • That is borrowed from a qualified Item G2(a)
Tax Year person (defined in section 49(a)(1)(D) If the foreign partnership has an EIN,
(iv)) or is lent or guaranteed by a
Enter in the space below the title of enter it here. Don’t enter FOREIGNUS
federal, state, or local government.
Form 8865 the tax year of the foreign or APPLIED FOR. If the partnership
has no EIN, item G2(b) must be
partnership that ended with or within See section 465(b)(6) for more
completed.
the tax year of the person filing this information on qualified nonrecourse
form. Category 1 or 2 filers must financing. Item G2(b)
report information for the tax year of A reference ID number (defined
the foreign partnership that ends with Item D. Identification of
or within their tax years. A Category 3 Common Parent below) is required on item G2(b) only
in cases where no EIN was entered
or 4 filer must report on Schedule O or If the person filing the form is a on item G2(a) for the foreign
P, respectively, transactions that member of a consolidated group, but partnership. However, filers are
occurred during that filer's tax year not the parent, list the name, address, permitted to enter both an EIN on item
(rather than during the partnership's and EIN of the filer's common parent. G2(a) and a reference ID number on
tax year). item G2(b). If applicable, enter the
Item E
Identifying Numbers and Check the item E checkbox only if the reference ID number you have
Addresses Form 8865 filer also files Form 8938, assigned to the foreign partnership
Enter the identifying number of the Statement of Specified Foreign identified on item G1.
person filing this return. Use an Financial Assets, for the tax year and A “reference ID number” is a
employer identification number (EIN) includes this form in the total number number established by or on behalf of
to identify partnerships, corporations, of Forms 8865 reported on Form the U.S. person identified at the top of
and estates or trusts. For individuals, 8938, Part IV, line 19. For more page 1 of the form that is assigned to
use a social security number (SSN) or information, see the Instructions for a foreign partnership with respect to
other identification number. Form 8938, generally, and in which Form 8865 reporting is
particular, Duplicative reporting and required. These numbers are used to
Include the suite, room, or other Part IV Excepted Specified Foreign . uniquely identify the foreign
unit number after the street address. If Financial Assets. partnership in order to keep track of
the Post Office doesn’t deliver mail to the partnership from tax year to tax
the street address and the U.S. Item F
year.
person has a P.O. box, show the box Information about certain partners.
number instead. If you are reporting information about

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The reference ID number must reference ID number to a foreign Item G8a. Functional Currency
meet the requirements below. Don’t partnership. For example: Enter the foreign partnership's
enter FOREIGNUS or APPLIED FOR • In the case of a merger or functional currency. See sections 985
with respect to the reference ID acquisition, a Form 8865 filer must through 989 and the regulations
number. use a reference ID number which thereunder. If the partnership had
correlates the previous reference ID more than one qualified business unit
Note. Because reference ID numbers number with the new reference ID (QBU), described in Regulations
are established by or on behalf of the number assigned to the foreign section 1.989(a)-1(b)(2)(ii), attach a
U.S. person filing Form 8865, there is partnership; or statement identifying each QBU, its
no need to apply to the IRS to request • In the case of an entity country of operation, and its functional
a reference ID number or for classification election that is made on currency. A QBU under Regulations
permission to use these numbers. behalf of the foreign partnership on section 1.989(a)-1(b)(2)(ii) is any
Form 8832, Regulations section separate and clearly identified unit of
Note. Generally, the reference ID 301.6109-1(b)(2)(v) requires the a trade or business of the partnership
number assigned to a foreign foreign partnership to have an EIN for which maintains separate books and
partnership on Form 8865 has this election. For the first year that records.
relevance only on Form 8865, its Form 8865 is filed after an entity
schedules, and any other form that is classification election is made on Hyperinflationary exception. A
attached to or associated with Form behalf of the foreign partnership on partnership that has a
8865, and should not be used with Form 8832, the new EIN must be hyperinflationary currency as its
respect to that foreign partnership on entered on item G2(a) of Form 8865 functional currency is subject to
other IRS forms. However, the foreign and the old reference ID number must special rules set forth in Regulations
partnership's reference ID number be entered on item G2(b). In section 1.985-3. Generally, under
should also be entered on Form 8858, subsequent years, the filer may these rules, a partnership must use
Information Return of U.S. Persons continue to enter both the EIN on item the U.S. dollar as its functional
With Respect to Foreign Disregarded G2(a) and the reference ID number on currency.
Entities, if the foreign partnership is item G2(b), but must enter at least the Item G8b. Exchange Rate
listed as a tax owner of a foreign EIN on item G2(a).
disregarded entity on Form 8858. See When translating functional currency
You must correlate the reference ID
the instructions for Form 8858, to U.S. dollars, you must use the
numbers as follows: New reference ID
line 3c(2), for more information. method specified in sections 985
number (space) Old reference ID
through 989 and the regulations
number. If there is more than one old
thereunder. But, regardless of the
Requirements reference ID number, you must enter
specific method required, all
a space between each such number.
exchange rates must be reported
The reference ID number that is As indicated above, the length of a
using a “divide-by convention”
entered on item G2(b) must be given reference ID number is limited
rounded to at least four places. That
alphanumeric (defined below) and no to 50 characters and each number
is, the exchange rate must be
special characters or spaces are must be alphanumeric and no special
reported in terms of the amount by
permitted. The length of a given characters are permitted.
reference ID number is limited to 50 which the functional currency amount
characters. Note. This correlation requirement must be divided in order to reflect an
applies only to the first year the new equivalent amount of U.S. dollars. As
For these purposes, the term reference ID number is used. such, the exchange rate must be
“alphanumeric” means the entry can reported as the units of foreign
be alphabetical, numeric, or any Item G6. Principal Business currency that equal one U.S. dollar,
combination of the two. Activity Code rounded to at least four places. Don’t
report the exchange rate as the
If the foreign partnership filed
number of U.S. dollars that equal one
The same reference ID number Form 1065. Enter the business code
unit of foreign currency.
must be used consistently from tax number (principal business activity
year to tax year with respect to a given code) shown in item C of the Form Note. You must round the result to
foreign partnership. If for any reason a 1065 filed by the partnership. more than four places if failure to do
reference ID number falls out of use
(for example, the foreign partnership If the foreign partnership did not so would materially distort the
no longer exists due to disposition or file Form 1065. Enter the applicable exchange rate or the equivalent
liquidation), the reference ID number principal business activity code from amount of U.S. dollars.
used for that foreign partnership Codes for Principal Business Activity Item H2
cannot be used again for another and Principal Product or Service near
foreign partnership for purposes of the end of these instructions. If the If the foreign partnership was required
Form 8865 reporting. information necessary to apply the to file Form 1065 for the partnership's
total receipts test is not available, pick tax year listed at the top of page 1 of
There are some situations that a principal business activity code Form 8865, check the applicable box
warrant correlation of a new reference using the information you have about and enter the Internal Revenue
ID number with a previous reference the partnership. Service Center where the form was or
will be filed (or enter “electronic filing”
ID number when assigning a new
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if the form was or will be filed Enter the number of Forms 8858 and (2) the amount of the dual
electronically). Also, check the attached to Form 8865. A disregarded consolidated loss. See Regulations
applicable box(es) if the foreign entity is an entity that is disregarded section 1.1503(d)-5 for rules on
partnership was required to file (for its as an entity separate from its owner determining the amount of a dual
tax year) Form 8804, Annual Return under Regulations section consolidated loss attributable to a
for Partnership Withholding Tax 301.7701-2(c)(2). The partnership is separate unit.
(Section 1446); or (for the calendar the tax owner of the foreign
year ending with or within the foreign disregarded entity if it is treated as Item H11
partnership's tax year) Form 1042, owning the assets and liabilities of the Note. Only Category 1 filers are
Annual Withholding Tax Return for foreign disregarded entity for required to answer item H11.
U.S. Source Income of Foreign purposes of U.S. income tax law. Answer “Yes” to item H11 if the
Persons. If the foreign partnership is the tax partnership meets both of the
Item H5 owner of a foreign disregarded entity requirements shown on the form.
or operates a foreign branch and you Total receipts is defined as the sum of
Section 267A disallows a deduction are a Category 1 or 2 filer of Form gross receipts or sales (Schedule B,
for certain interest or royalty paid or 8865, complete and attach Form 8858 line 1a); all other income reported on
accrued in agreement with a hybrid to Form 8865. For more information, Schedule B (lines 4 through 7);
arrangement, to the extent that, under see the Instructions for Form 8858. income reported on Schedule K, lines
the foreign tax law, there isn’t a 3a, 5, 6a, and 7; income or net gain
corresponding income inclusion Item H10. Separate Units reported on Schedule K, lines 8, 9a,
(including long-term deferral). In the Note. Only Category 1 filers (or 10, and 11; and income or net gain
case of a filer that is a tax resident of indirect partners that are filing the reported on Form 8825, Rental Real
the United States (for example, a constructive ownership exception Estate Income and Expenses of a
domestic corporation or citizen of the statement) are required to answer Partnership or an S Corporation, lines
United States), report in Question H5 items H10a and H10b, if applicable. 2, 19, and 20a.
the total amount of interest and royalty Answer "Yes" to item H10a if the filer
paid or accrued by the foreign is a domestic corporation and (1) the Item H12
partnership for which your distributive partnership is a hybrid entity; or (2) Check the “Yes” box on line 12a if the
share of deductions is disallowed the filer, through its interest in the filer of this Form 8865 is claiming a
under section 267A. In the case of a partnership, indirectly owns an deduction under section 250 with
filer that isn’t a tax resident of the interest in a hybrid entity or indirectly respect to foreign-derived intangible
United States (for example, a carries on a business operation income (FDII), and enter the amounts
domestic partnership), only report in outside the United States that, if requested on lines 12b, 12c, and 12d.
Question H5 the portion of your carried on by a U.S. person, would Enter U.S. dollar amounts on lines
distributive share of interest and constitute a foreign branch (as 12b, 12c, and 12d, translated from
royalty paid or accrued by the foreign defined in Regulations section functional currency at the average
partnership for which you know, or 1.367(a)-6T(g)(1)). Under Regulations exchange rate for the foreign
have reason to know, that one or section 1.1503(d)-1(b)(3), a hybrid partnership's tax year (see section
more of your owners aren’t allowed a entity means an entity that isn’t 989(b)).
deduction under section 267A. For taxable as an association for U.S. The reported amounts should
additional information about section federal tax purposes, but is subject to provide information for transactions
267A, including the application of an income tax of a foreign country as between the filer of the Form 8865
section 267A in the case of payments a corporation (or otherwise at the and the foreign partnership. See Form
by a partnership, see IRS.gov/ entity level) either on its worldwide 8993 and its instructions for
businesses/partnerships/faqs-for- income or on a residence basis. If the information on the section 250
form-1065-schedule-b-other- answer to item H10a is "No," skip item deduction. If no deduction is being
information-question-22. H10b. claimed, check the “No” box.
Item H6 See Regulations section
1.1503(d)-1(b)(4) for more information Item H14
Answer “Yes” to item H6 if the Answer “Yes” if at any time during the
on separate units, including
partnership is a section 721(c) year there were transfers between the
information on when two or more
partnership. If the answer is “Yes,” partnership and its partners subject to
individual separate units are
see the specific instructions for the disclosure requirements of
combined and treated as one
Schedules G and H, relating to the Regulations section 1.707-8. For
separate unit. If you answer “Yes” to
gain deferral method, and, if certain transfers that are presumed to
item H10b, then, for each separate
applicable, Schedule O, relating to the be sales, the partnership or the
unit that has a dual consolidated loss,
contribution of property during the tax partners must comply with the
attach a statement that sets forth (1)
year. See Section 721(c) partnership,
the identity and country of operation of disclosure requirements in
earlier. Regulations section 1.707-8.
the separate unit or, in the case of a
Item H8 combined separate unit, the identity Generally, disclosure is required
Note. Only Category 1 and 2 filers and country of operation of each when:
are required to complete item H8. individual separate unit that is treated 1. Certain transfers to a partner
as part of the combined separate unit; are made within 2 years of a transfer

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of property by the partner to the during the filer's tax year that the organization for any foreign partner,
partnership; reportable transfer occurred. See other than an individual. See country
2. Certain debt is incurred by a Schedule A-2. Foreign Partners of codes on IRS.gov/CountryCodes.
partner within 2 years of the earlier of Section 721(c) Partnership, later.
Check if related to U.S. transferor.
(a) a written agreement to transfer, or Check the box if the partner is directly
(b) a transfer of the property that Schedule A-1. Certain or indirectly related to the U.S.
secures the debt, if the debt is treated transferor (within the meaning of
as a qualified liability; or Partners of Foreign
section 267(b) or 707(b)(1)) and isn’t
3. Transfers from a partnership to Partnership a U.S. person.
a partner occur which are the All Category 1 and certain Category 3
equivalent to those listed in (1) or (2) filers must complete Schedule A-1. Percentage interest. Include the
above. Any person already listed on foreign partner's percentage of
Schedule A isn’t required to be listed interest in the partnership's capital
The disclosure must be made on again on Schedule A-1. and profits immediately after the gain
the transferor partner's return using deferral contribution. If multiple gain
Form 8275, Disclosure Statement, or Category 1 filers. Category 1 filers deferral contributions occurred during
on an attached statement providing must list all U.S. persons who owned the tax year, enter the percentages
the same information. When more at least a 10% direct interest in the immediately after the last gain deferral
than one partner transfers property to foreign partnership during the contribution. See Gain deferral
a partnership under a plan, the partnership's tax year listed at the top contribution, earlier.
disclosure may be made by the of page 1 of Form 8865.

partnership rather than each partner. Category 3 filers. Category 3 filers Schedule A-3. Affiliation
must list:
Signature Schedule
• Each U.S. person that owned a
Filer. Don’t sign Form 8865 if you are 10% or greater direct interest in the All filers must complete Schedule A-3.
filing it as an attachment to your foreign partnership during the List on Schedule A-3 all partnerships
income tax return. Sign the return only Category 3 filer's tax year, and (foreign or domestic) in which the
if you are filing Form 8865 separately • Any other person related to the foreign partnership owned a direct
because you aren’t required to file a Category 3 filer that was a direct interest, or a 10% indirect interest
U.S. income tax return. See When partner in the foreign partnership (under the rules of section 267(c)(1)
and Where To File, earlier, for more during that tax year. and (5)) during the partnership tax
year listed at the top of page 1 of
information. See Regulations section
Form 8865.
Paid preparer. Don’t sign Form 8865 1.6038B-2(i)(4) for the definition of a
or complete the paid preparer section related person. Category 1 filers. Only Category 1
filers must complete the ordinary
at the bottom of the form if Form 8865 Exception. Category 3 filers who income or loss column. In that
is filed as an attachment to an income only transferred cash and didn’t own a column, report the foreign
tax return. Sign Form 8865 and 10% or greater interest in the partnership's share of ordinary income
complete the paid preparer section transferee partnership after the (even if not received) or loss from
only if Form 8865 is filed separately. transfer aren’t required to complete partnerships in which the foreign
Schedule A-1. partnership owns a direct interest.
Schedule A. Constructive The total amount of ordinary income
Ownership of Partnership Schedule A-2. Foreign or loss from each partnership must
also be included on Schedule B,
Interest Partners of Section 721(c)
line 4.
All filers must complete Schedule A. Partnership
Check box a if the person filing the Schedule A-2 must be completed if
return owns a direct interest in the (1) item H6 is answered “Yes” (that Schedule B. Income
foreign partnership. Check box b if the the partnership is a section 721(c) Statement—Trade or
person filing the return constructively partnership); and (2) during the Business Income
owns an interest in the foreign current tax year, a gain deferral
partnership. See Constructive contribution occurred, or (3) a gain Important: All Category 1 filers in
ownership, earlier. deferral contribution occurred in a partnerships engaged in a domestic
Category 1 and 2 filers. Category 1 prior tax year (including before 2021) or foreign trade or business must
and 2 filers must list the persons (U.S. and, during the current tax year, the complete Form 8865, Schedule B.
and foreign) whose interests in the gain deferral method is applied to If the partnership is a section
foreign partnership they constructively section 721(c) property contributed in 721(c) partnership and the gain
owned during the partnership tax the prior gain deferral contribution. deferral method is applied,
year. See Section 721(c) partnership Gain , Schedule B must include any
deferral contribution, and Gain
Category 3 filers. Category 3 filers remedial items with respect to section
deferral method, earlier.
must list the persons (U.S. and 721(c) property, including an
foreign) whose interests in the foreign Country of organization. Insert the offsetting remedial item relating to
partnership they constructively owned 2-letter country code for the country of contributed section 197(f)(9) property.

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See Regulations section 1.704-3(d) subsequent tax year to which the gain on which the property is listed in Part
and Regulations section 1.704-3(d)(5) deferral method is applied to section I. Thus, in Parts II through IV, line 1
(iii). The total net amount of remedial 721(c) property, even if the gain corresponds to Part I, line 1, and line 2
allocations should be included on deferral contribution with respect to corresponds to Part I, line 2, and so
line 7, Other income (loss). Attach a that property occurred before 2018. on.
detailed statement describing the See Regulations section 1.721(c)-6(b) If there are more than four
remedial items allocated to each (2) and (3). See Gain deferral method, reportable section 721(c) properties,
partner during the tax year with Gain deferral contribution, and in Parts I through IV, attach a
respect to section 721(c) property. Section 721(c) property, earlier. statement using the same format as in
See Regulations section 1.721(c)-3. Parts I through IV, listing properties, or
See Section 721(c) partnership, Filing Year
Section 721(c) property, and Gain Check the box for “Tax year of gain information with respect to properties,
deferral method, earlier. deferral contribution” if your tax year is in the same manner as described in
a year in which a gain deferral the preceding two paragraphs. For
Specific Instructions for contribution occurred (a gain deferral example, the first line on the
Schedule B contribution year). Check the “Annual statement for Part I must be labeled
For specific instructions for Form reporting” box if a gain deferral “5” and contain columns with the
8865, Schedule B, use the contribution occurred in a year prior to same information as those in Part I,
instructions for Form 1065, lines 1a the current tax year and, in the current and must list the reportable section
through 21 (income and deductions). tax year, the gain deferral method 721(c) property with the fifth-highest
applies to section 721(c) property FMV. The statements with respect to
You can view or download the contributed in the prior gain deferral Parts I through IV may be combined in
TIP Instructions for Form 1065 at contribution (an annual reporting a single attached statement, provided
IRS.gov/ year). If the tax year is both a gain that the format described above is
ScheduleD(Form1065). Also, these deferral contribution year and an followed.
instructions can be ordered by calling annual reporting year, both boxes A U.S. transferor should complete
800-829-3676 (800-TAX-FORM). should be checked. and file only one Schedule G for each
partnership. See U.S. transferor,
General Instructions earlier.
Schedule D. Capital Gains On Schedule G, information must be
and Losses provided with respect to section Part I. Section 721(c) Property
721(c) property that was (i) Provide the requested information
Important: All Form 8865 Category 1 contributed to the partnership in a with respect to each reportable
filers in partnerships having gain deferral contribution that section 721(c) property. See General
partnership items described in the occurred during the current tax year; Instructions under Schedule G above
Instructions for Schedule D (Form or (ii) contributed to the partnership in for the order in which properties must
1065), Capital Gains and Losses, a gain deferral contribution that be listed and when an attached
must complete that schedule. occurred during a prior tax year, statement can and must be used. If
You can view or download the provided that the gain deferral method there are more than four reportable
is applied to the property in the section 721(c) properties, enter on
TIP Schedule D (Form 1065) and
the Instructions for current tax year. Collectively, section line 4a the following information with
Schedule D (Form 1065) at IRS.gov/ 721(c) property with respect to which respect to the reportable section
information must be reported on 721(c) properties listed on the
ScheduleD(Form1065). Also, the form
Schedule G is referred to as attached statement.
and its instructions can be ordered by
“reportable section 721(c) properties.”
calling 800-829-3676 1. In columns 6(a) through 6(c),
See
(800-TAX-FORM). Section 721(c) property, earlier. provide the aggregate FMV, basis,
In Parts I through V, information and built-in gain, respectively, of the
must be provided on a properties.
Schedule G (Form 8865). property-by-property basis. In Part I, 2. Check the boxes in columns 4,
Statement of Application reportable section 721(c) properties 5, and 7(a)–(e) if applicable to any of
of the Gain Deferral and accompanying information must the properties.
be listed in descending order of FMV Don’t complete line 4a if there
Method Under Section (measured at the time of contribution). ! are four or fewer reportable
721(c) Thus, the reportable section 721(c) CAUTION section 721(c) properties.
A U.S. transferor uses Schedule G to property with the highest FMV should
comply with the reporting be listed on line 1, the reportable
requirements that must be satisfied in section 721(c) property with the Note. Schedule O, Transfer of
applying the gain deferral method. If second highest FMV should be listed Property to a Foreign Partnership,
the gain deferral method is applied to on line 2, and so on. may need to be completed if, during
section 721(c) property, a U.S. the tax year, the U.S. transferor
transferor must file Schedule G for the In Parts II through IV, the line on contributed property (including
tax year of a gain deferral which information is provided with section 721(c) property) to the
contribution, as well as for each respect to a reportable section 721(c) partnership. See the Schedule O
property must correspond to the line instructions, later.

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Column 4. Section 197(f)(9) prop-       properties must be listed and when an   Instead, column 5 should list only the 
erty. Check the box with respect to     attached statement can and must be      amount of gain recognized pursuant 
the reportable section 721(c) property  used. On line 4a, provide the total     to Regulations section 1.721(c)-5(e) 
if the property is an intangible        amounts in each column with respect     (requiring the U.S. transferor to 
described in section 197(f)(9).         to all reportable section 721(c)        recognize an amount of gain equal to 
                                        property, including property listed on  the remaining built-in gain (if any) that 
Column 5. Effectively connected         an attached statement.                  would have been allocated to the U.S. 
income property.    Check the box                                               transferor if the partnership had sold 
with respect to the reportable section  Column (a). Remaining built-in 
                                                                                the remaining portion of the property 
721(c) property if (1) all distributive gain at beginning of tax year.    With 
                                                                                immediately before the transfer for 
shares of income and gain with          respect to a reportable section 721(c) 
                                                                                FMV).
respect to the property for all direct  property, enter the amount of 
and indirect partners that are related  remaining built-in gain at the          Part III. Allocation Percentages 
foreign persons with respect to the     beginning of the tax year. If the       of Partnership Items With 
U.S. transferor will be subject to      property was contributed in the         Respect to Section 721(c) 
taxation as income effectively          current tax year, enter the property’s 
connected with a trade or business      built-in gain on the date of the        Property
within the United States (under         contribution (Part I, column 6(c)).     For each reportable section 721(c) 
                                                                                property, enter the percentage of 
section 871 or 882), and (2) neither    Column (b). Remaining built-in          income, gain, deduction, and loss 
the section 721(c) partnership nor a    gain at end of tax year. With           allocated to the U.S. transferor, 
related foreign person that is a direct respect to a reportable section 721(c)  related domestic partners, and related 
or indirect partner in the partnership  property, enter the amount of           foreign partners. See General 
claims benefits under an income tax     remaining built-in gain at the end of   Instructions under Schedule G, 
convention that would exempt the        the tax year, figured under the gain    earlier, for the order in which 
income or gain from tax or reduce the   deferral method.                        properties must be listed and when an 
rate of taxation to which the income or 
gain is subject. See Regulations        Column (c). Remedial income allo-       attached statement can and must be 
sections 1.721(c)-3(b)(1)(ii) and       cated to the U.S. transferor.    With   used. See section 267(b) or 707(b)(1) 
1.721(c)-6(c)(1).                       respect to a reportable section 721(c)  for rules on determining related 
                                        property, enter the remedial income     partners, and see Regulations section 
Column 6(a). Fair market value.         allocated to the U.S. transferor under  1.721(c)-3(c) for a rule requiring that 
Enter the fair market value of the      the remedial allocation method. When    the partnership apply the consistent 
reportable section 721(c) property,     the gain deferral method applies to a   allocation method when the gain 
measured as of the date of              section 721(c) property, the            deferral method applies.
contribution.                           partnership must use the remedial 
                                                                                Part IV. Allocation of Items to 
Column 6(b). Basis. Enter the           allocation method described in 
adjusted tax basis of the reportable    Regulations section 1.704-3(d) with     U.S. Transferor With Respect to 
section 721(c) property on the date of  respect to the property. See            Section 721(c) Property
the contribution. See sections 1011     Regulations section 1.721(c)-3(b)(1)    For each reportable section 721(c) 
through 1016 for more information for   (i)(A).                                 property, enter the amount (both book 
the determination of adjusted tax       Column (d). Gain recognized due         and tax) of income, gain, deduction, 
basis.                                  to acceleration event. With respect     and loss allocated to the U.S. 
Column 7. Events.   Check the box       to a reportable section 721(c)          transferor under the gain deferral 
for each of columns 7(a) through 7(e)   property, enter the amount of built-in  method. See General Instructions 
which describes an event that           gain taken into account by reason of    under Schedule G, earlier, for the 
occurred during the tax year with       an acceleration event or partial        order in which properties must be 
respect to the reportable section       acceleration event. See Regulations     listed and when an attached 
721(c) property. If a box is checked    sections 1.721(c)-4 and 1.721(c)-5 for  statement can and must be used. In 
for any reportable section 721(c)       events constituting an acceleration     addition, a description of any tax item 
property listed, respond “Yes” on the   event or partial acceleration event and or regulatory allocation with respect to 
corresponding line in Part V of         for the consequences of such events.    a reportable section 721(c) property 
                                                                                that is allocated to the U.S. transferor 
Schedule G and complete                 Column (e). Gain recognized due         must be included in Part VI, 
Schedule H. See the Part V              to section 367 transfer. With           Supplemental Information.
instructions below.                     respect to a reportable section 721(c) 
Part II. Remaining Built-in Gain,       property, enter the amount of gain      Part V. Additional Information
                                        recognized by the U.S. transferor       Part V provides questions relating to 
Remedial Income, and Gain                                                       whether certain events have occurred 
                                        pursuant to Regulations section 
Recognition                             1.721(c)-5(e) (regarding transfers,     in the current tax year with respect to 
Provide the requested information       including indirect transfers, described one or more reportable section 721(c) 
with respect to each reportable         in section 367 of section 721(c)        properties and information relating to 
section 721(c) property. See General    property to a foreign corporation).     treaty benefits. Such events include:
Instructions under Schedule G,          Gain recognized under section 367       • Acceleration events (see 
earlier, for the order in which         should not be included in column 5.     Regulations section 1.721(c)-4),

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• Partial acceleration events (see                                                 allocated to the U.S. transferor if the 
Regulations section 1.721(c)-5(d)),       Schedule H (Form 8865).                  section 721(c) partnership had sold 
• Termination events (see                 Acceleration Events and                  the section 721(c) property 
Regulations section 1.721(c)-5(b)),       Exceptions Reporting                     immediately before the acceleration 
• Successor events involving a                                                     event for FMV. Following the event, 
successor partnership or U.S.             Relating to Gain Deferral                the gain deferral method no longer 
transferor (see Regulations section       Method Under Section                     applies to that section 721(c) 
1.721(c)-5(c)),                           721(c)                                   property. See Regulations section 
• Taxable disposition of a portion of     If the gain deferral method is being     1.721(c)-4 for rules relating to 
an interest in a partnership (see         applied to reportable section 721(c)     acceleration events.
Regulations section 1.721(c)-5(f)),       property, complete and file              At any time, a U.S. transferor may 
and                                       Schedule H to report certain events      affirmatively treat an acceleration 
• Direct or indirect transfer of section  related to the section 721(c) property.  event as having occurred (a deemed 
721(c) property to a foreign              See Regulations sections 1.721(c)-4      acceleration event) with respect to a 
corporation subject to section 367        and -5 for more information. Complete    section 721(c) property by both 
(see Regulations section                  a separate Schedule H for each           recognizing the remaining built-in gain 
1.721(c)-5(e)).                           partnership.                             in that section 721(c) property and 
Lines 1 through 6b. If the answer is      General instructions.    Complete all    satisfying the reporting requirements 
“Yes” to any of the questions on lines    Parts of Schedule H that correspond      of the acceleration event. See 
1 through 6b of Part V, also complete     to the box or boxes checked in           Regulations section 1.721(c)-4(b)(4).
and attach Schedule H (Form 8865).        Schedule G, Part I, column 7, and the    Column (b).   Provide a description of 
See the separate instructions later for   related line on Part V checked “Yes.”    the acceleration event, including the 
Schedule H. In addition, the              If additional lines are needed to report citation in the case of a partial or 
corresponding checkboxes in Part I,       the information required in Parts I      deemed acceleration event. See 
columns 7(a) through 7(e), should be      through V, attach a statement in the     Regulations section 1.721(c)-6(b)(3)
marked, as applicable.                    same format as the format used in the    (iv). Use Part VI, Supplemental 
Line 7a. If the answer is “Yes,” attach   Part, in Part VI, Supplemental           Information, if additional space is 
to Form 8865 a copy of the waiver of      Information. See Section 721(c)          needed to describe the transaction.
treaty benefits with respect to the       property, earlier.
                                                                                   Column (d).   Enter the amount of the 
reportable section 721(c) property.       For Parts I–III and V, enter in          gain recognized by the U.S. transferor 
See Regulations sections                  column (a) the line number for the       with respect to the section 721(c) 
1.721(c)-6(b)(2)(iii) and 1.721(c)-6(c).  section 721(c) property from             property resulting from the 
                                          Schedule G, Part I. If the impacted 
Part VI. Supplemental                                                              acceleration event.
                                          section 721(c) property is listed on an 
Information                               attached statement to Schedule G,        Column (e).   Enter the amount that 
Information to be reported.   When        Part I, enter the line number from the   the section 721(c) partnership will 
providing any information in Part VI,     attached statement on which that         increase its basis in the section 721(c) 
indicate the Part, Part column, and       property was identified.                 property as a result of the acceleration 
                                                                                   event. See Regulations sections 
line for which the information is         Part I. Acceleration Event               1.721(c)-4(c)(2) and 1.721(c)-5(d) in 
provided.
                                          Acceleration event.   An acceleration    the case of a partial acceleration 
Additional Part rows.  If an attached     event is any event that either would     event.
statement is used in Parts I through      reduce the amount of the remaining       Column (f). Check the box if there is 
IV, include the statement “Additional     built-in gain that a U.S. transferor     a partial acceleration event and the 
Section 721(c) Property statement(s)      would have recognized under the gain     U.S. transferor recognizes a partial 
is/are attached” in the area provided     deferral method if the event had not     gain with respect to the section 721(c) 
in Part VI.                               occurred or could defer the              property. Certain distributions of other 
Other information. Use the                recognition of the remaining built-in    partnership property to a partner that 
Supplemental Information section to       gain. Acceleration events are            result in an adjustment under section 
provide any additional information        applicable on a property-by-property     734 to the section 721(c) property 
required by Regulations section           basis. An acceleration event includes    constitute a partial acceleration event 
1.721(c)-6 that isn’t captured in Parts I the transfer of section 721(c) property  requiring that the U.S. transferor 
through IV above.                         by making a contribution of the          recognize gain. If there is a remaining 
                                          property itself to another partnership   built-in gain in the section 721(c) 
                                          or the contribution of an interest in a  property immediately after the partial 
                                          section 721(c) partnership to another    acceleration event, the gain deferral 
                                          partnership. When an acceleration        method must continue to apply and 
                                          event occurs with respect to a section   the U.S. transferor is required to 
                                          721(c) property, the U.S. transferor     continue to report the information on 
                                          must recognize gain in an amount         Schedule G with respect to that 
                                          equal to remaining built-in gain in the  property. See Regulations section 
                                          property that would have been            1.721(c)-5(d).

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Part II. Termination Event transferor. In other successor events, partnerships) that the U.S. transferor
A termination event causes the gain a partnership becomes the successor retained immediately after the event.
deferral method to no longer apply section 721(c) partnership. A
Column (e). Enter the aggregate
with respect to the affected section successor section 721(c) partnership
amount of the remaining built-in gain
721(c) property on a may be a new, upper-tier, or lower-tier
with respect to all of the section
property-by-property basis. partnership. The identifying
721(c) properties that is attributable to
Regulations section 1.721(c)-5(b) information must include the name,
the portion of the interest in the
identifies the termination events. address, and U.S. taxpayer
section 721(c) partnership that is
identification number (TIN), if any, of
retained. Attach a detailed supporting
Column (b). Provide a description of the successor U.S. transferor or
schedule to Schedule H that
the termination event, including the successor section 721(c) partnership.
citation to the relevant paragraph in separately states each remaining
Regulations section 1.721(c)-5(b). Part IV. Taxable Disposition of section 721(c) property and its
See Regulations section 1.721(c)-6(b) a Portion of an Interest in respective remaining built-in gain
(3)(v). Use Part VI, Supplemental Partnership Event allocable to the U.S. transferor
included in the aggregate amount
Information, if additional space is Part IV reports the information relating reported in column (e).
needed to describe the transaction. to a fully taxable disposition of a
Part III. Successor Event portion of an interest in a section Part V. Section 367 Transfer
721(c) partnership. Complete this Part
A successor event allows for the Event
if a U.S. transferor or a partnership in
continued application of the gain Part V reports the information relating
which a U.S. transferor is a direct or
deferral method with respect to the to a transfer described in section 367
indirect partner disposes of (directly or
affected section 721(c) property on a of section 721(c) property to a foreign
indirectly through one or more
property-by-property basis by a corporation. See Regulations section
partnerships) a portion of an interest
successor U.S. transferor or a 1.721(c)-5(e). Section 367 events
in a section 721(c) partnership in a
successor section 721(c) partnership. include:
transaction in which the gain or loss, if
However, if the successor doesn’t • Transfer of section 721(c) property
any, is recognized. This will not be an
continue the gain deferral method, the by a section 721(c) partnership to a
acceleration event with respect to the
event is an acceleration event and foreign corporation, or
portion of the interest transferred. The
must be reported in Part I above. • Transfer by a U.S. transferor or a
gain deferral method will continue to
Successor events are applicable on a partnership in which a U.S. transferor
apply with respect to the section
property-by-property basis. If only a is a direct or indirect partner transfers
721(c) property of the section 721(c)
portion of an interest in a partnership (directly or indirectly through one or
partnership. The rules of Regulations
is transferred in a successor event, more partnerships) all or a portion of
section 1.704-3(a)(7) are applied to
the rules of Regulations section the section 721(c) partnership that
determine the remaining built-in gain
1.704-3(a)(7) are applied to determine owns section 721(c) property to a
in the section 721(c) property on a
the remaining built-in gain in the foreign corporation.
property-by-property basis that is
section 721(c) property that is As a result of the section 367
attributable to the portion of the
attributable to the portion of the event, the section 721(c) property is
interest in the section 721(c)
interest that is transferred and the no longer subject to the gain deferral
partnership is retained. See
portion that is retained. Regulations method. The U.S. transferor is treated
Regulations section 1.721(c)-5(f).
section 1.721(c)-5(c) identifies the as transferring the section 721(c)
successor events, including special Column (a). Provide a description of property to a foreign corporation and
rules for transactions involving tiered the disposition of the interest in the is subject to taxation on the transfer
partnerships. partnership, including whether the under section 367. See the section
If more than one successor event interest was a direct or indirect 367 regulations for rules relating to
occurs in the tax year, provide the interest (through one or more gain or income recognition under
required information for each event partnerships). If more than one section 367.
separately in Part IV in chronological taxable disposition event occurs in the
date order. tax year, provide the required Note. A transfer of property to a
information for each event separately foreign corporation by a U.S.
Column (b). Provide a description of in Part IV in chronological date order. transferor is subject to other reporting
the successor event, including the If additional space is needed, provide requirements under sections 367,
citation to the relevant paragraph in the information in Part VI, 351, 368, and 6038B (for example,
Regulations section 1.721(c)-5(c). Supplemental Information. the filing of Form 926), as applicable.
See Regulations section 1.721(c)-6(b) See the related regulations under
(3)(v). Use Part VI, Supplemental Column (c). Enter the percentage of
these Code sections. Such reporting
Information, if additional space is partnership interest that was disposed
requirements are in addition to the
needed to describe the transaction. of in the event to which all gain or
filing of Schedule H.
loss, if any, is recognized.
Column (d). Enter the identifying After considering the tax
information of the relevant successor, Column (d). Enter the percentage of consequences under section 367, the
as applicable. In certain successor the partnership interest (directly or remaining built-in gain, if any, with
events, a domestic corporation indirectly through one or more respect to the section 721(c) property
becomes the successor U.S. is recognized by the U.S. transferor to
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the extent that would have been on the Part at issue. If separate interest in FPS. Therefore, Partner A
allocated to the U.S. transferor had supplemental schedules are used for is considered to own a 55% interest in
the section 721(c) partnership sold any Part of Schedule H for specific FPS and is thus a Category 1 filer.
that portion of the property section 721(c) properties, use the When Partner A completes
immediately before the transfer for same corresponding identification line Schedule K-1 (Form 8865) for itself,
FMV. number from the Part I of Schedule G Partner A must report the distributive
for such property on the supplemental share of items allocated to Partner A's
Column (b). Provide a description of
schedule for Schedule H. direct interest of 45% but not any
the section 367 transfer, including
items allocated to DC's 10% interest.
whether the transfer was a direct or Other information. Use the
When Partner A completes
indirect transfer (through one or more Supplemental Information section to
Schedule K-1 (Form 8865) for DC
partnerships) of section 721(c) provide any additional information
(which Partner A must do because DC
property to a foreign corporation. If required by Regulations section
owns a direct 10% interest), Partner A
more than one section 367 transfer 1.721(c)-6 that isn’t reported in Parts I
must report on DC's Schedule K-1
occurs in the tax year, provide the through V above.
(Form 8865) only items allocated to
required information for each transfer
DC's direct 10% interest.
separately in Part IV in chronological
date order. If additional space is Schedules K, Partners' Although the partnership isn’t
needed, provide the information in Distributive Share Items, subject to income tax, the partners are
Part VI, Supplemental Information. and K-1 (Form 8865), liable for tax on their shares of the
Column (d). Enter the amount of the Partner’s Share of Income, partnership income, whether or not
distributed, and must include their
remaining portion of built-in gain Deductions, Credits, etc. share of such items on their tax
recognized by the U.S. transferor
under section 721(c). The amount of Schedule K returns.
gain equals the remaining portion of Form 8865, Schedule K, is a summary Allocations of income, gains,
the built-in gain that would have been schedule of all of the partners' shares losses, deductions, or credits among
allocated to the U.S. transferor if the of the partnership income, credits, the partners should generally be
section 721(c) partnership had sold deductions, etc. Only Category 1 filers made according to the partnership
that portion of the section 721(c) must complete Form 8865, agreement. See section 704 and the
property immediately before the Schedule K. regulations thereunder.
transfer for FMV. This amount should
not include any gain or income Schedule K-1 Schedule K-1 (Form 8865) for rela-
recognized by the U.S. transferor Schedule K-1 (Form 8865) is used to ted foreign partners. If the gain
pursuant to section 367 that is report a specific partner's share of the deferral method is applied and a
reported elsewhere on the return. See partnership income, deductions, section 721(c) partnership doesn’t
Regulations section 1.721(c)-5(e). credits, etc. have a filing obligation under section
6031, the U.S. transferor must obtain
After the section 367 transfer, the All Category 1 and 2 filers must
a Schedule K-1 (Form 8865) for each
transferred section 721(c) property complete Schedule K-1 (Form 8865)
direct or indirect partner that is related
will no longer be subject to the gain for any direct interest they hold in the
to the U.S. transferor (within the
deferral method. partnership. A Category 1 or 2 filer
meaning of section 267(b) or 707(b)
Column (e). Enter the identifying that doesn’t own a direct interest is
(1)) and that isn’t a U.S. person
information of the foreign transferee not required to complete
(related foreign partner). See
corporation that received the section Schedule K-1 (Form 8865).
Regulations section 1.721(c)-6(c)(3).
721(c) property in the section 367 Category 1 filers must also The Schedule K-1 (Form 8865) for
transfer. The identifying information complete Schedule K-1 (Form 8865) each related foreign partner must be
includes the name, address, and for each U.S. person that directly filed and attached to the Form 8865
U.S.TIN, if any. owns a 10% or greater direct interest as part of the annual reporting relating
Part VI. Supplemental in the partnership. to the gain deferral method pursuant
Information Provide the partner's beginning and to Regulations section 1.721(c)-6(b)
year-end percentage interests in (3)(xi). The instructions that apply to
Information to be reported. When Schedule K-1 (Form 8865) for all
partnership profits, losses, capital, or
providing any information in the other partners also apply to a
deductions. These percentages
Supplemental Information, indicate Schedule K-1 (Form 8865) for a
should include any interest
the Part, Part column, row, and line for related foreign partner. See Gain
constructively owned by the filer.
which the information is provided. deferral method Section 721(c) ,
Complete boxes 1 through 21 for
Additional Part rows. If additional partnership, and U.S. transferor,
any direct interest that the partner
rows are needed to enter information earlier.
owns in the partnership.
in Parts I through V in the
Supplemental Information, provide the Example. Partner A owns a 45% General Reporting Instructions
information in an attachment or direct interest in a foreign partnership for Schedule K-1 (Form 8865)
attachments to Schedule H in the (FPS). Partner A also owns 100% of
same format as required for the row the stock of a domestic corporation On each Schedule K-1 (Form 8865),
(DC), which owns a 10% direct enter the information about the

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partnership and the partner in Parts I income (loss) (code I) in the Instructions for Schedule K-1 (Form
and II (items A through F). For Instructions for Form 1065. 1065).
Schedule K-1 (Form 8865), items E
Attached statements. When Line 16. If the partnership had items
and F, see the instructions for the
attaching statements to Schedule K-1 of international tax relevance, see the
corresponding Schedule K-1 (Form
to report additional information to the Instructions for Schedules K-2 and
1065), items J and L, in the
partner, indicate there is a statement K-3 (Form 8865) to determine if you
Instructions for Form 1065 under
for the following. need to check the box and attach
Specific Instructions (Schedule K-1
• If an amount can be input on Schedules K-2 and K-3.
only). In Part III, enter the partner's
Schedule K-1 but additional
distributive share of each item of
information is required, enter an
income, deduction, and credit and any Schedules K-2 (Form
asterisk (*) after the code in the
other information the partner needs to 8865), Partners’
column to the left of the entry space.
prepare the partner's tax return.
• For items that can't be reported as Distributive Share
Item A2 a single dollar amount, enter the code Items—International, and
Enter the reference ID number used and an asterisk (*) in the column to
on Form 8865, item G2(b). For details, the left and enter “STMT” in the right K-3 (Form 8865), Partner’s
see the instructions for Item G2(b), column to indicate that the information Share of Income,
earlier. is provided on an attached statement. Deductions, Credits,
• If the partnership has more coded etc.—International
Part III—line 1. If the gain deferral items than the number of entry boxes
method is applied to which the section (for example, boxes 11 and 13 Schedule K-2
721(c) partnership adopts the through 15, or boxes 17 through 21), Schedule K-2 (Form 8865) is an
remedial allocation method, the don't enter a code or dollar amount in extension of Schedule K of the Form
amounts reflected on each partner's the last entry box. Instead, enter an 8865 and is used to report items of
Schedule K-1 for the allocations of asterisk (*) in the left column and international tax relevance from the
income, gains, losses, deductions, or enter “STMT” in the entry space to the operation of a partnership.
credits allocated to such partner must right.
include any allocations of remedial Schedule K-3
More than one attached statement
items with respect to section 721(c) Schedule K-3 (Form 8865) is an
can be placed on the same sheet of
property. See Regulations section extension of Schedule K-1 (Form
paper. The information included in the
1.721(c)-3(c). 8865) and is generally used to report
statement should be identified in
For example, if the partner is the alphanumeric order by box number the partner’s share of the items
U.S. transferor of section 721(c) followed by the letter code (if any), reported on Schedule K-2. The
property, Part III, line 1, would include description, and dollar amount for information reported on Schedule K-3
any remedial income allocated to the each item. For example: “Box 13, is used to report information on a
U.S. transferor from Schedule G, Part code J—Work opportunity partner’s tax or information returns.
II, column (c), Remedial income credit—$1,000.” This can be followed For more information, see the
allocated to U.S. transferor, as with any additional information the Instructions for Schedules K-2 and
applicable. For partners other than the partner needs to determine the proper K-3 (Form 8865).
transferor, Part III, line 1, would tax treatment of the item.
include their share of ordinary
business income (or loss) after taking Specific Instructions for Schedule L. Balance
into account any remedial items to Schedules K and K-1 Sheets per Books
such partner relating to section 721(c) For the specific instructions for Form The balance sheets should agree with
property. However, Part III, line 1, 8865, Schedule K, and Schedule K-1 the partnership's books and records.
would not include basis adjustments (Form 8865), see the Instructions for Attach a statement explaining any
attributable to section 197(f)(9) for Form 1065. differences.
related foreign partners. See
Regulations section 1.704-3(d)(5)(iii) If the partnership is a section Only Category 1 filers are required
and Regulations section 1.721(c)-3. 721(c) partnership, box 20 (code to complete Form 8865, Schedule L.
See Section 721(c) partnership, AH—Other information) of
Section 721(c) property, and Gain Schedule K-1, Part III, must include If you answered "Yes" to item H11
deferral method, earlier. the amounts relating to any remedial on page 1 of Form 8865, you do not
items made under the remedial have to complete Form 8865,
Codes. In box 11 and boxes 13 allocation method (described in Schedule L.
through 21, identify each item by Regulations section 1.704-3(d) and Schedule L requires balance
entering a code in the column to the Regulations section 1.704-3(d)(5)(iii)) sheets prepared and translated into
left of the dollar amount entry space. with respect to section 721(c) U.S. dollars in accordance with U.S.
These codes are identified in List of property. For the specific partner's generally accepted accounting
Codes Used for Schedule K-1 (Form information relating to the remedial principles (GAAP).
8865), later. For Box 11—Code G. method allocations and gain deferral
Other income (loss), see Other method, see the Instructions for Form Exception. Generally, if the
1065, especially the Partner's partnership or any QBU of the
partnership uses the dollar
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approximate separate transactions Only Category 1 filers are required under column (d). Report the
method (DASTM), Form 8865, to complete Form 8865, transactions only under column (b).
Schedule L, should reflect the tax Schedule M-1. If you answered "Yes"
Lines 6 and 16. Enter distributions
balance sheets prepared and to item H11 on page 1 of Form 8865,
received from other partnerships and
translated into U.S. dollars according you don’t have to complete Form
distributions from the foreign
to Regulations section 1.985-3(d). 8865, Schedule M-1.
partnership for which this form is
Specific Instructions for Specific Instructions for being completed.
Schedule L Schedule M-1 Lines 20 and 21. Enter the largest
For the specific instructions for Form For the specific instructions for outstanding balances during the tax
8865, Schedule L, see the Schedule M-1 (Form 8865), see the year of gross amounts borrowed from,
Instructions for Form 1065. Instructions for Form 1065. and gross amounts lent to, the related
parties described in columns (a)
through (d). Don’t enter aggregate
Schedule M. Balance Schedule M-2. Analysis of cash flows, year-end loan balances,
Sheets for Interest Partners' Capital Accounts average balances, or net balances.
Allocation Only Category 1 filers are required to Don’t include open account balances
All Category 1 filers must complete complete Form 8865, Schedule M-2. resulting from sales and purchases
Form 8865, Schedule M, and it should If you answered "Yes" to item H11 on reported under other items listed on
reflect the book values of the page 1 of Form 8865, you don’t have Schedule N that arise and are
partnership's assets, as described in to complete Form 8865, collected in full in the ordinary course
Temporary Regulations sections Schedule M-2. of business.
1.861-9T(g)(2) and 1.861-12T. Assets Specific Instructions for
should be characterized as U.S. Schedule O (Form 8865).
Schedule M-2
assets or foreign assets in one or
more separate limitation categories as For the specific instructions for Form Transfer
provided in Temporary Regulations 8865, Schedule M-2, see the of Property to a
sections 1.861-9T(g)(3) and Instructions for Form 1065. Foreign Partnership
1.861-12T. The balance sheets Category 3 filers must complete
should be prepared in U.S. dollars Schedule N. Transactions Schedule O.
under Temporary Regulations section
1.861-9T(g)(2)(ii). Between Controlled Section 721(c) partnerships.
Foreign Partnership and Regulations section 1.721(c)-2
Exception. If the partnership or
any QBU of the partnership uses Partners or Other Related overrides section 721(a)
DASTM, Form 8865, Schedule M, Entities nonrecognition of gain upon a
contribution of section 721(c) property
should reflect the tax balance sheet All Category 1 filers must complete
to a section 721(c) partnership
prepared in U.S. dollars under Schedule N and report all transactions
occurring on or after August 6, 2015.
Regulations section 1.985-3(d). See of the foreign partnership during the
A U.S. transferor must recognize gain
Temporary Regulations section tax year of the partnership listed on
unless the gain deferral method
1.861-9T(g)(2)(ii)(A)(2) for more the top of Form 8865, page 1. A
described in Regulations section
information on DASTM. Category 1 filer filing a Form 8865 for
1.721(c)-3 is applied. To satisfy the
other Category 1 filers under the
Line 2. Enter the partnership's reporting requirements of the gain
multiple Category 1 filers exception
foreign assets according to the deferral method, the U.S. transferor is
must complete a Schedule N for itself
separate categories of income. required to report certain information
and a separate Schedule N for each
for the year of the contribution and for
See the instructions for Category 1 filer not filing Form 8865.
Schedule K-2 and Schedule K-3 subsequent years. See Regulations
Category 2 filers are required to
(Form 8865), Part III, Section 2; section 1.721(c)-6. See Section
complete columns (a), (b), and (c) of
section 904(d); and Regulations 721(c) property Section 721(c) ,
Schedule N. Category 2 filers don’t
section 1.904-4(m) for more partnership U.S. transferor, , and Gain
have to complete column (d).
information. deferral method, earlier.
Column (a). Use column (a) to report Reference ID number. Use the
transactions between the foreign reference ID number shown on Form
Schedule M-1. partnership and the person filing the 8865, item G2(b). For details, see the
Reconciliation of Income Form 8865. instructions for Item G2(b), earlier.
(Loss) per Books With Column (d). Use column (d) to report Part I. Transfers Reportable
Income (Loss) per Return transactions between the foreign
Under Section 6038B
Form 8865 filers aren’t required to partnership and any U.S. person with
complete Schedule M-3 (Form 1065), a 10% or more direct interest in the Part I is used to report the transfer of
Net Income (Loss) Reconciliation for foreign partnership. If such person property to a foreign partnership.
Certain Partnerships. also qualifies under column (b), don’t Provide the information required in
report transactions between the columns (a) through (g) with respect
foreign partnership and that person to each contribution of property to the

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foreign partnership that must be         before the transfer differs from any of     Annual Reporting With Respect
reported. If you contributed property    your profit, loss, or deduction interests   to the Gain Deferral Method
with an FMV greater than its tax basis   in the partnership at that time, enter in 
(appreciated property), or intangible    the supplemental information below          A U.S. transferor subject to the gain 
property, provide the information        your interests, by percentage, in the       deferral method must annually attach 
required in columns (a) through (g)      profit, loss, and deductions at that        Schedule G (Form 8865), containing 
separately with respect to each item     time. To the extent your capital            the information required in 
of property transferred (except to the   interest in the partnership immediately     Regulations section 1.721(c)-6(b)(3)
extent you are allowed to aggregate      after the transfer differs from any of      (i) through (vii) (and (b)(3)(ix), as 
the property under Regulations           your profit, loss, or deduction interests   applicable). See Regulations section 
sections 1.704-3(e)(2), (3), and (4)).   in the partnership at that time, enter in   1.721(c)-6(b)(3) for further annual 
                                         the supplemental information below          reporting requirements pursuant to 
Provide a general description of         your interests, by percentage, in the       the gain deferral method.
each item of property in the             profit, loss, and deductions at that 
Supplemental Information Required        time.                                       Part II. Dispositions Reportable 
To Be Reported section. For all other                                                Under Section 6038B
property contributed, aggregate by       Supplemental information required 
the categories listed in Part I.         to be reported. Enter any                   Use Part II to report certain 
                                         information from Part I that is required    dispositions by a foreign partnership. 
Column (a). Enter the date of the        to be reported in greater detail.           If you were required to report a 
transfer. If the transfer was composed   Identify the applicable column number       transfer of appreciated property to the 
of a series of transactions over         next to the information entered in this     partnership, and the partnership 
multiple dates, enter the date the       section. In addition, if you contributed    disposes of the property while you are 
transfer was completed.                  property to a foreign partnership as        still a direct or constructive partner, 
Column (b). Enter the description of     part of a wider transaction, briefly        you must report that disposition in Part 
the property transferred.                describe the entire transaction.            II. If the partnership disposes of the 
                                                                                     property in a nonrecognition 
Column (c). Enter the FMV of the           Reporting required for the year           transaction and receives in exchange 
property contributed (measured as of     of contribution to which the gain           substituted basis property, report the 
the date of the transfer).               deferral method is applied.                 subsequent disposition of the 
                                         Additionally, describe any section 
Column (d). Enter your adjusted                                                      substituted basis property in the same 
                                         721(c) property contributed to a 
basis in the property contributed on                                                 manner as provided for the 
                                         section 721(c) partnership and 
the date of the transfer. See sections                                               contributed property. See section 
                                         identify whether the gain deferral 
1011 through 1016 for more                                                           7701(a)(42) for the definition of 
                                         method is applied. A U.S. transferor 
information on the determination of                                                  substituted basis property and 
                                         must attach to Form 8865, for the year 
adjusted basis.                                                                      Regulations section 1.704-3(a)(8) for 
                                         of contribution, Schedule G,                more information.
Column (f). If you contributed           containing the information described        A disposition by a partnership may 
appreciated property, enter the          in Regulations section 1.721(c)-6(b)        be an acceleration event for purposes 
method (traditional, traditional with    (2)(i). See Regulations section             of applying the gain deferral method. 
curative allocations, or remedial) used  1.721(c)-6(b) for additional                The U.S. transferor may be required 
by the partnership to make section       requirements.                               to recognize gain in an amount equal 
704(c) allocations with respect to 
each item of property. See                 Additional form and statement             to the remaining built-in gain on the 
Regulations sections 1.704-3(b), (c),    requirements. In addition to the            section 721(c) property previously 
and (d) for more information on these    reporting requirements above, the           contributed to the section 721(c) 
allocation methods. If the gain deferral following statements and forms must         partnership. See Regulations section 
method is applied, the remedial          also be filed to satisfy the                1.721(c)-4. For acceleration event 
method must generally be used. See       requirements for the gain deferral          exceptions, see Regulations section 
Regulations section 1.721(c)-3(b)(1)     method.                                     1.721(c)-5. Acceleration events and 
(i). For an exception for certain        • Schedule H (Form 8865), if certain        exceptions to an acceleration event 
property generating effectively          events have occurred.                       should be reflected in Part II. In 
connected income, see Regulations        • Form 8838-P, Consent To Extend            addition, Schedules G and H are 
section 1.721(c)-3(b)(1)(ii).            the Time To Assess Tax Pursuant to          required to be filed.
                                         the Gain Deferral Method (Section           Column (a). Provide a brief 
Column (g). Enter the amount of          721(c)). See Regulations sections           description of the property disposed 
gain, if any, recognized on the          1.721(c)-6(b)(2)(ii), (b)(3)(viii), and (b) of by the partnership. If you are 
transfer. See sections 721(b) and        (5) for more information.                   reporting the disposition of substituted 
904(f)(3), and Regulations section       • Copy of “Statement of Waiver of           basis property received by the 
1.721(c)-2.                              Treaty Benefits under Section               partnership in a nonrecognition 
Line 3. Enter your capital interests,    1.721(c)-6,” if applicable. See             transaction in exchange for 
by percentage, in the partnership        Regulations section 1.721(c)-6(c)(1).       appreciated property contributed by 
immediately before and after the                                                     you, enter “See Attached” and attach 
transfer. To the extent your capital                                                 a statement providing brief 
interest in the partnership immediately                                              descriptions of both the property 
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contributed by you to the partnership (measured as of the date of
and the substituted basis property Schedule P (Form 8865). acquisition). See sections 722 and
received by the partnership in Acquisitions, Dispositions, 742.
exchange for that property. and Changes of Interests Columns (e) and (f). Enter your total
Column (b). Enter the date that you in a Foreign Partnership direct percentage interest in the
transferred this property to the Use Schedule P to report the partnership both before and
partnership. If you are reporting the acquisition, disposition, and change of immediately after the acquisition. To
disposition of substituted basis interest in a foreign partnership. the extent your direct percentage
property received by the partnership interest in the partnership differs
in a nonrecognition transaction in Every Category 4 filer must among capital, profits, losses, or
exchange for property previously complete Schedule P, unless they deductions, enter “See Below” and
contributed by you, enter “See qualify under the exception for certain state the different percentages in Part
Attached” and attach a statement Category 4 filers, described earlier. IV.
showing both the date you transferred Reference ID number. Use the Part II. Dispositions
the appreciated property to the reference ID number shown on Form
This section is completed by U.S.
partnership and the date the 8865, item G2(b). For details, see the
persons who are Category 4 filers
partnership exchanged the property instructions for Item G2(b), earlier.
for substituted basis property in a because they disposed of an interest
nonrecognition transaction. See Part I. Acquisitions in a foreign partnership. See
Regulations section 1.6038B-2. Part I is completed by Category 4 Categories of Filers, earlier, for more
Column (c). Enter the date that the filers required to report an acquisition details about what types of
partnership disposed of the property. of an interest in a foreign partnership. dispositions must be reported. For
See Categories of Filers, earlier, for each disposition reported in Part II,
Column (d). Briefly describe how the more details about which types of indicate in Part IV whether a
partnership disposed of the property acquisitions must be reported. statement is required by Regulations
(for example, by sale or exchange). section 1.751-1(a)(3) to be filed with
An acquisition of a section 721(c) respect to the disposition.
Column (e). Enter the amount of partnership interest may be an
gain, if any, recognized by the acceleration event exception under A disposition of a section 721(c)
partnership on the disposition of the gain deferral method. In such partnership interest may be an
property. case, Schedule H is required to be acceleration event for purposes of
Column (f). Enter the amount of filed. See Regulations section applying the gain deferral method.
depreciation recapture, if any, 1.721(c)-5. In this case, the acquirer The U.S. transferor may be required
recognized by the partnership on the may become a successor U.S. to recognize gain in an amount equal
disposition of property. See transferor and may have a reporting to the remaining built-in gain on the
Regulations sections 1.1245-1(e) and requirement under Regulations section 721(c) property previously
1.1250-1(f). section 1.721(c)-6. As a result, the contributed to the section 721(c)
successor U.S. transferor is required partnership. In this case, Schedule H
Column (g). Enter the amount of to file Schedule G as well as, if certain must also be filed. See Regulations
gain from column (e) allocated to you. events occur, Schedule H. See section 1.721(c)-4. For acceleration
Column (h). Enter the amount of Section 721(c) partnership Gain , event exceptions, see Regulations
depreciation recapture from column deferral method, and U.S. transferor, section 1.721(c)-5.
(f) allocated to you. See Regulations earlier. Column (a). Unless you disposed of
sections 1.1245-1(e) and 1.1250-1(f). Column (a). If you acquired the the interest by withdrawing, in whole
If you recognize any section 1254 interest in the foreign partnership by or in part, from the partnership, enter
recapture on the partnership's purchase, gift, or inheritance, or in a the name, address, and identifying
disposition of natural resource distribution from a trust, estate, number (if any) of the person to whom
recapture property, enter “See partnership, or corporation, enter the you transferred the interest in the
Attached” and attach a statement name, address, and identifying foreign partnership.
figuring the amount of recapture. See number (if any) of the person from Column (b). Enter the date of the
Regulations section 1.1254-5. whom you acquired the interest. disposition. If the disposition was
Part III. Gain Recognition Under Column (b). Enter the date of the composed of a series of transactions
Section 904(f)(3) or (f)(5)(F) acquisition. If the acquisition was over multiple dates, enter the date the
If gain recognition was required with composed of a series of transactions disposition was completed.
respect to any transfer reported in over multiple dates, enter the date the Column (c). Enter the FMV of the
Part I under section 904(f)(3) or (f)(5) acquisition was completed. interest you disposed of in the
(F), attach a statement identifying the Column (c). Enter the FMV of the partnership (measured as of the date
transfer and the amount of gain interest you acquired in the of disposition). If you recognized gain
recognized. partnership (measured as of the date or loss on the disposition, state the
of acquisition). amount of gain or loss in Part IV. See
section 741.
Column (d). Enter your basis in the
acquired partnership interest

Instructions for Form 8865 (2022) -19-

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Column (d). Enter your adjusted changed. See Categories of Filers, Columns (e) and (f). Enter your
basis in the partnership interest earlier, for more details about which direct percentage interest in the
disposed of immediately before the changes in proportional interest must partnership both before and
disposition. See section 705. be reported. immediately after the change. To the
Columns (e) and (f). Enter your total Column (a). Briefly describe the extent your percentage interest in the
direct percentage interest in the event that caused your interest in the partnership differs among capital,
partnership both before and partnership to change (for example, profits, losses, or deductions, enter
immediately after the disposition. To the admission of a new partner). “See Below” and state the different
percentages in Part IV.
the extent your percentage interest in Column (b). Enter the date of the
the partnership differs among capital, change. If the change resulted from a Part IV. Supplemental
profits, losses, or deductions, enter series of transactions over multiple Information Required
“See Below” and state the different dates, enter the date the change was To Be Reported
percentages in Part IV. completed.
Enter any information asked for in Part
Part III. Change in Column (c). Enter the FMV of your I, Part II, or Part III that must be
Proportional Interest interest in the partnership immediately reported in detail. Identify the
This section is completed by U.S. before the change. applicable part number and column
persons who are Category 4 filers Column (d). Enter your basis in your next to the information entered in Part
because their direct proportional partnership interest immediately IV.
interest in the foreign partnership before the change.

Privacy Act and Paperwork Reduction Act Notice. We ask for the information on this form and its schedules to carry
out the Internal Revenue laws of the United States. We need this information to ensure that you are complying with the
revenue laws and to allow us to figure and collect the right amount of tax. Sections 6038, 6038B, 6038D, and 6046A
require you to provide this information. Section 6038D requires specified individuals and, upon issuance of regulations,
specified domestic entities to report specified foreign financial assets in which they have an interest. Form 8938 is
generally used to comply with this reporting requirement, but if you checked the box on Form 8865, item E, you're
choosing to use Form 8865 (in conjunction with Form 8938) to report your interests. Section 6109 requires you to provide
your identification number. Failure to provide all of the requested information in a timely manner or providing false
information may subject you to penalties.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act
unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be
retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by section 6103. However, section 6103 allows or requires
the IRS to disclose or give such information to the Department of Justice for civil and criminal litigation, and to cities,
states, the District of Columbia, and U.S. commonwealths and 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 schedules will vary depending on individual
circumstances. The estimated burden for individual and business taxpayers filing this form is approved under OMB
control number 1545-0074 and 1545-0123 and is included in the estimates shown in the instructions for their individual
and business income tax return. The estimated burden for all other taxpayers who file this form is shown below.

Learning about the law Preparing, copying, assembling,
Form Recordkeeping or the form and sending the form to the IRS
8865 39 hr., 30 min. 6 hr., 47 min. 14 hr., 21 min.
Schedule G (Form 8865) 13 hr., 52 min. 3 hr., 34 min. 3 hr., 57 min.
Schedule H (Form 8865) 7 hr., 53 min. 2 hr., 17 min. 2 hr., 30 min.
Schedule K-1 (Form 8865) 12 hr., 12 min. 7 hr., 31 min. 9 hr., 14 min.
Schedule K-2 (Form 8865) 170 hr., 16 min. 34 hr., 28 min. 50 hr., 44 min.
Schedule K-3 (Form 8865) 171 hr., 13 min. 35 hr., 33 min. 51 hr., 53 min.
Schedule O (Form 8865) 16 hr., 15 min. 5 hr., 10 min. 5 hr., 39 min.
Schedule P (Form 8865) 5 hr., 44 min. 1 hr., 12 min. 1 hr., 20 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. You can send us comments through IRS.gov/
FormComments. Or you can send your comments to the Internal Revenue Service, Tax Forms and Publications, 1111
Constitution Ave. NW, IR-6526, Washington, DC 20224. Do not send Form 8865 to this address. Instead, see When and
Where To File, earlier.

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List of Codes Used for Schedule K-1 (Form 8865)

Box Number / Item                                                       Where to report or where to find further reporting information. 
1. Ordinary business income (loss). Determine whether the income (loss) 
is passive or nonpassive and enter on your return as follows.
Passive loss                                                            See Partner’s Instr. (Form 1065)
Passive income                                                          Schedule E (Form 1040), line 28, column (h)
Nonpassive loss                                                         See Partner’s Instr. (Form 1065)
Nonpassive income                                                       Schedule E (Form 1040), line 28, column (k)
2. Net rental real estate income (loss)                                 See Partner’s Instr. (Form 1065)
3. Other net rental income (loss)
Net income                                                              Schedule E (Form 1040), line 28, column (h)
Net loss                                                                See Partner’s Instr. (Form 1065)
4a. Guaranteed payment services                                         See Partner’s Instr. (Form 1065) 
4b. Guaranteed payment capital                                          See Partner’s Instr. (Form 1065)
4c. Guaranteed payment total                                            See Partner’s Instr. (Form 1065)
5. Interest income                                                      Form 1040 or 1040-SR, line 2b
6a. Ordinary dividends                                                  Form 1040 or 1040-SR, line 3b
6b. Qualified dividends                                                 Form 1040 or 1040-SR, line 3a
6c. Dividend equivalents                                                See Partner’s Instr. (Form 1065)
7. Royalties                                                            Schedule E (Form 1040), line 4
8. Net short-term capital gain (loss)                                   Schedule D (Form 1040), line 5
9a. Net long-term capital gain (loss)                                   Schedule D (Form 1040), line 12
9b. Collectibles (28%) gain (loss)                                      28% Rate Gain Worksheet, line 4 (Schedule D instructions)
9c. Unrecaptured section 1250 gain                                      See Partner’s Instr. (Form 1065)
10. Net section 1231 gain (loss)                                        See Partner’s Instr. (Form 1065)
11. Other income (loss)
Code A. Other portfolio income (loss)                                   See Partner’s Instr. (Form 1065)
Code B. Involuntary conversions                                         See Partner’s Instr. (Form 1065)
Code C. Section 1256 contracts & straddles                              Form 6781, line 1
Code D. Mining exploration costs recapture                              See Pub. 535
Code E. Cancellation of debt                                            Schedule 1 (Form 1040), line 8c; or Form 982
Code F. Section 743(b) positive income adjustments                      See Partner’s Instr. (Form 1065)
Code G. Other income (loss)                                             See Partner’s Instr. (Form 1065)

Instructions for Form 8865 (2022)                            -21-

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Box Number / Item                                                  Where to report or where to find further reporting information. 
12. Section 179 deduction                                          See Partner’s Instr. (Form 1065)
13. Other deductions
Code A. Cash contributions (60%)                                   See Partner’s Instr. (Form 1065)
Code B. Cash contributions (30%)                                   See Partner’s Instr. (Form 1065)
Code C. Noncash contributions (50%)                                See Partner’s Instr. (Form 1065)
Code D. Noncash contributions (30%)                                See Partner’s Instr. (Form 1065)
Code E. Capital gain property to a 50% organization (30%)          See Partner’s Instr. (Form 1065)
Code F. Capital gain property (20%)                                See Partner’s Instr. (Form 1065)
Code G. Contributions (100%)                                       See Partner’s Instr. (Form 1065)
Code H. Investment interest expense                                Form 4952, line 1
Code I. Deductions—royalty income                                  Schedule E (Form 1040), line 19
Code J. Section 59(e)(2) expenditures                              See Partner’s Instr. (Form 1065)
Code K. Excess business interest expense                           See Partner’s Instr. (Form 1065)
Code L. Deductions—portfolio (other)                               Schedule A (Form 1040), line 16
Code M. Amounts paid for medical insurance                         Schedule A (Form 1040), line 1; or Schedule 1 (Form 1040), line 17
Code N. Educational assistance benefits                            See Partner’s Instr. (Form 1065)
Code O. Dependent care benefits                                    Form 2441, line 12
Code P. Preproductive period expenses                              See Partner’s Instr. (Form 1065)
Code Q. Reserved for future use
Code R. Pensions and IRAs                                          See Partner’s Instr. (Form 1065)
Code S. Reforestation expense deduction                            See Partner’s Instr. (Form 1065)
Codes T through U                                                  Reserved for future use
Code V. Section 743(b) negative income adjustments                 See Partner’s Instr. (Form 1065)
Code W. Other deductions                                           See Partner’s Instr. (Form 1065)
14. Self-employment earnings (loss) 
Note. If you have a section 179 deduction or any partner-level 
deductions, see the Partner’s Instr. (Form 1065) before completing 
Schedule SE (Form 1040).
Code A. Net earnings (loss) from self-employment                   Schedule SE, Section A or B
Code B. Gross farming or fishing income                            See Partner’s Instr. (Form 1065)
Code C. Gross non-farm income                                      See Partner’s Instr. (Form 1065)
15. Credits
Code A. Reserved for future use
Code B. Reserved for future use
Code C. Low-income housing credit (section 42(j)(5)) from          See Partner’s Instr. (Form 1065)
post-2007 buildings
Code D. Low-income housing credit (other) from post-2007 buildings See Partner’s Instr. (Form 1065)
Code E. Qualified rehabilitation expenditures (rental real estate) See Partner’s Instr. (Form 1065)
Code F. Other rental real estate credits                           See Partner’s Instr. (Form 1065)
Code G. Other rental credits                                       See Partner’s Instr. (Form 1065)
Code H. Undistributed capital gains credit                         See Partner’s Instr. (Form 1065)
Code I. Biofuel producer credit                                    See Partner’s Instr. (Form 1065)
Code J. Work opportunity credit                                    See Partner’s Instr. (Form 1065)
Code K. Disabled access credit                                     See Partner’s Instr. (Form 1065)
Code L. Empowerment zone employment credit                         See Partner’s Instr. (Form 1065)
Code M. Credit for increasing research activities                  See Partner’s Instr. (Form 1065)
Code N. Credit for employer social security and Medicare taxes     See Partner’s Instr. (Form 1065)
Code O. Backup withholding                                         See Partner’s Instr. (Form 1065)
Code P. Other credits                                              See Partner’s Instr. (Form 1065)
17. Alternative minimum tax (AMT) items
Code A. Post-1986 depreciation adjustment                          See Partner’s Instr. (Form 1065) and the Instructions for Form 6251
Code B. Adjusted gain or loss                                      See Partner’s Instr. (Form 1065) and the Instructions for Form 6251
Code C. Depletion (other than oil & gas)                           See Partner’s Instr. (Form 1065) and the Instructions for Form 6251
Code D. Oil, gas, and geothermal—gross income                      See Partner’s Instr. (Form 1065) and the Instructions for Form 6251
Code E. Oil, gas, and geothermal—deductions                        See Partner’s Instr. (Form 1065) and the Instructions for Form 6251
Code F. Other AMT items                                            See Partner’s Instr. (Form 1065) and the Instructions for Form 6251

                                                          -22-                            Instructions for Form 8865 (2022)

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Box Number / Item                                                Where to report or where to find further reporting information. 
18. Tax-exempt income and nondeductible expenses
Code A. Tax-exempt interest income                               Form 1040, line 2a
Code B. Other tax-exempt income                                  See Partner’s Instr. (Form 1065)
Code C. Nondeductible expenses                                   See Partner’s Instr. (Form 1065)
19. Distributions
Code A. Cash and marketable securities                           See Partner’s Instr. (Form 1065)
Code B. Distribution subject to section 737                      See Partner’s Instr. (Form 1065)
Code C. Other property                                           See Partner’s Instr. (Form 1065)
20. Other information
Code A. Investment income                                        Form 4952, line 4a
Code B. Investment expenses                                      Form 4952, line 5
Code C. Fuel tax credit information                              Form 4136
Code D. Qualified rehabilitation expenditures (other than rental real  See Partner’s Instr. (Form 1065)
estate)
Code E. Basis of energy property                                 See Partner’s Instr. (Form 1065)
Codes F through G. Recapture of low-income housing credit        See Partner’s Instr. (Form 1065)
Code H. Recapture of investment credit                           See Form 4255
Code I. Recapture of other credits                               See Partner’s Instr. (Form 1065)
Code J. Look-back interest—completed long-term contracts         See Form 8697
Code K. Look-back interest—income forecast method                See Form 8866
Code L. Dispositions of property with section 179 deductions     See Partner’s Instr. (Form 1065)
Code M. Recapture of section 179 deduction                       See Partner’s Instr. (Form 1065)
Code N. Business interest expense (information item)             See Partner’s Instr. (Form 1065)
Code O. Section 453(I)(3) information                            See Partner’s Instr. (Form 1065)
Code P. Section 453A(c) information                              See Partner’s Instr. (Form 1065)
Code Q. Section 1260(b) information                              See Partner’s Instr. (Form 1065)
Code R. Interest allocable to production expenditures            See Partner’s Instr. (Form 1065)
Code S. Capital construction fund (CCF) nonqualified withdrawals See Partner’s Instr. (Form 1065)
Code T. Depletion information — oil and gas                      See Partner’s Instr. (Form 1065)
Code U. Section 743(b) basis adjustment                          See Partner’s Instr. (Form 1065)
Code V. Unrelated business taxable income                        See Partner’s Instr. (Form 1065)
Code X. Reserved for future use                                  See Partner’s Instr. (Form 1065)
Code Y. Net investment income                                    See Partner’s Instr. (Form 1065)
Code Z. Section 199A information                                 See Partner’s Instr. (Form 1065)
Code AA. Section 704(c) information                              See Partner’s Instr. (Form 1065)
Code AB. Section 751 gain (loss)                                 See Partner’s Instr. (Form 1065)
Code AC. Section 1(h)(5) gain (loss)                             See Partner’s Instr. (Form 1065)
Code AD. Deemed section 1250 unrecaptured gain                   See Partner’s Instr. (Form 1065)
Code AE. Excess taxable income                                   See Partner’s Instr. (Form 1065)
Code AF. Excess business interest income                         See Partner’s Instr. (Form 1065)
Code AG. Gross receipts for section 448(c) (information item)    See Partner’s Instr. (Form 1065)
Code AH. Other information                                       See Partner’s Instr. (Form 1065)

Instructions for Form 8865 (2022)                         -23-

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Codes for Principal Business                                 Using the list of activities and codes below,     subcontractor to produce the finished product, but 
Activity and Principal Product or                        determine from which activity the business derives    retains title to the product, the business is 
                                                         the largest percentage of its “total receipts.” Total considered a manufacturer and must use one of 
Service                                                  receipts is defined as the sum of gross receipts or   the manufacturing codes (311110–339900).
This list of Principal Business Activities and their     sales (Schedule B, line 1a); all other income               Once the Principal Business Activity is 
associated codes is designed to classify an              reported on Schedule B, lines 4 through 7; income     determined, enter the six-digit code from the list 
enterprise by the type of activity in which it is        reported on Schedule K, lines 3a, 5, 6a, and 7;       below on page 1, item H7. Also enter a brief 
engaged to facilitate the administration of the          income or net gain reported on Schedule K, lines      description of the business activity in item H8.
Internal Revenue Code. These Principal Business          8, 9a, 10, and 11; and income or net gain reported 
Activity Codes are based on the North American           on Form 8825, lines 2, 19, and 20a. If the business 
Industry Classification System.                          purchases raw materials and supplies them to a 
Agriculture, Forestry, Fishing,        237310 Highway, Street, & Bridge              Paper Manufacturing                    333200 Industrial Machinery Mfg
and Hunting                                          Construction                    322100 Pulp, Paper, & Paperboard       333310 Commercial & Service 
                                       237990 Other Heavy & Civil                       Mills                                    Industry Machinery Mfg
Crop Production                                      Engineering Construction        322200 Converted Paper Product Mfg     333410 Ventilation, Heating, 
111100 Oilseed & Grain Farming         Specialty Trade Contractors                   Printing and Related Support                Air-Conditioning, & 
111210 Vegetable & Melon Farming       238100 Foundation, Structure, &               Activities                                  Commercial Refrigeration 
       (including potatoes & yams)                   Building Exterior Contractors   323100 Printing & Related Support           Equipment Mfg
111300 Fruit & Tree Nut Farming                      (including framing carpentry,      Activities                          333510 Metalworking Machinery Mfg
111400 Greenhouse, Nursery, &                        masonry, glass, roofing, &      Petroleum and Coal Products            333610 Engine, Turbine & Power 
       Floriculture Production                       siding)                         Manufacturing                               Transmission Equipment Mfg
111900 Other Crop Farming              238210 Electrical Contractors                 324110 Petroleum Refineries            333900 Other General Purpose 
       (including tobacco, cotton,     238220 Plumbing, Heating, &                      (including integrated)                   Machinery Mfg
       sugarcane, hay, peanut,                       Air-Conditioning Contractors    324120 Asphalt Paving, Roofing, &      Computer and Electronic Product 
       sugar beet, & all other crop    238290 Other Building Equipment                  Saturated Materials Mfg             Manufacturing
       farming)                                      Contractors                     324190 Other Petroleum & Coal          334110 Computer & Peripheral 
Animal Production                      238300 Building Finishing                        Products Mfg                             Equipment Mfg
112111 Beef Cattle Ranching &                        Contractors (including          Chemical Manufacturing                 334200 Communications Equipment 
       Farming                                       drywall, insulation, painting,                                              Mfg
112112 Cattle Feedlots                               wallcovering, flooring, tile, & 325100 Basic Chemical Mfg              334310 Audio & Video Equipment 
112120 Dairy Cattle & Milk Production                finish carpentry)               325200 Resin, Synthetic Rubber, &           Mfg
112210 Hog & Pig Farming               238900 Other Specialty Trade                     Artificial & Synthetic Fibers &     334410 Semiconductor & Other 
                                                     Contractors (including site        Filaments Mfg
112300 Poultry & Egg Production                      preparation)                    325300 Pesticide, Fertilizer, & Other       Electronic Component Mfg
112400 Sheep & Goat Farming            Manufacturing                                    Agricultural Chemical Mfg           334500 Navigational, Measuring, 
112510 Aquaculture (including          Food Manufacturing                            325410 Pharmaceutical & Medicine            Electromedical, & Control 
       shellfish & finfish farms &                                                      Mfg                                      Instruments Mfg
       hatcheries)                     311110 Animal Food Mfg                        325500 Paint, Coating, & Adhesive      334610 Manufacturing & Reproducing 
112900 Other Animal Production         311200 Grain & Oilseed Milling                   Mfg                                      Magnetic & Optical Media
Forestry and Logging                   311300 Sugar & Confectionery                  325600 Soap, Cleaning Compound, &      Electrical Equipment, Appliance, 
113110 Timber Tract Operations                       Product Mfg                        Toilet Preparation Mfg              and Component Manufacturing
113210 Forest Nurseries & Gathering    311400 Fruit & Vegetable Preserving           325900 Other Chemical Product &        335100 Electric Lighting Equipment 
       of Forest Products                            & Specialty Food Mfg               Preparation Mfg                          Mfg
113310 Logging                         311500 Dairy Product Mfg                      Plastics and Rubber Products           335200 Household Appliance Mfg
Fishing, Hunting, and Trapping         311610 Animal Slaughtering and                Manufacturing                          335310 Electrical Equipment Mfg
                                                     Processing                      326100 Plastics Product Mfg            335900 Other Electrical Equipment & 
114110 Fishing                         311710 Seafood Product Preparation            326200 Rubber Product Mfg                   Component Mfg
114210 Hunting & Trapping                            & Packaging                     Nonmetallic Mineral Product            Transportation Equipment 
Support Activities for Agriculture     311800 Bakeries, Tortilla & Dry Pasta         Manufacturing                          Manufacturing
and Forestry                                         Mfg                             327100 Clay Product & Refractory       336100 Motor Vehicle Mfg
115110 Support Activities for Crop     311900 Other Food Mfg (including                 Mfg                                 336210 Motor Vehicle Body & Trailer 
       Production (including cotton                  coffee, tea, flavorings, &      327210 Glass & Glass Product Mfg            Mfg
       ginning, soil preparation,                    seasonings)                     327300 Cement & Concrete Product       336300 Motor Vehicle Parts Mfg
       planting, & cultivating)        Beverage and Tobacco Product                     Mfg                                 336410 Aerospace Product & Parts 
115210 Support Activities for Animal   Manufacturing                                 327400 Lime & Gypsum Product Mfg            Mfg
       Production (including           312110 Soft Drink & Ice Mfg                   327900 Other Nonmetallic Mineral       336510 Railroad Rolling Stock Mfg
       Farriers)
115310 Support Activities for Forestry 312120 Breweries                                 Product Mfg                         336610 Ship & Boat Building
                                       312130 Wineries                               Primary Metal Manufacturing            336990 Other Transportation 
Mining                                 312140 Distilleries                           331110 Iron & Steel Mills & Ferroalloy      Equipment Mfg
211120 Crude Petroleum Extraction      312200 Tobacco Manufacturing                     Mfg                                 Furniture and Related Product 
211130 Natural Gas Extraction          Textile Mills and Textile Product             331200 Steel Product Mfg From          Manufacturing
212110 Coal Mining                     Mills                                            Purchased Steel                     337000 Furniture & Related Product 
212200 Metal Ore Mining                313000 Textile Mills                          331310 Alumina & Aluminum                   Manufacturing
212310 Stone Mining & Quarrying        314000 Textile Product Mills                     Production & Processing             Miscellaneous Manufacturing
212320 Sand, Gravel, Clay, &           Apparel Manufacturing                         331400 Nonferrous Metal (except        339110 Medical Equipment & 
       Ceramic & Refractory            315100 Apparel Knitting Mills                    Aluminum) Production &                   Supplies Mfg
                                                                                        Processing                          339900 Other Miscellaneous 
       Minerals Mining & Quarrying     315210 Cut & Sew Apparel                      331500 Foundries                            Manufacturing
212390 Other Nonmetallic Mineral                     Contractors
       Mining & Quarrying              315250 Cut & Sew Apparel Mfg                  Fabricated Metal Product               Wholesale Trade
213110 Support Activities for Mining                 (except Contractors)            Manufacturing                          Merchant Wholesalers, Durable 
Utilities                              315990 Apparel Accessories & Other            332110 Forging & Stamping              Goods
221100 Electric Power Generation,                    Apparel Mfg                     332210 Cutlery & Handtool Mfg          423100 Motor Vehicle & Motor 
       Transmission, & Distribution    Leather and Allied Product                    332300 Architectural & Structural           Vehicle Parts & Supplies
221210 Natural Gas Distribution        Manufacturing                                    Metals Mfg                          423200 Furniture & Home Furnishings
221300 Water, Sewage, & Other          316110 Leather & Hide Tanning &               332400 Boiler, Tank, & Shipping        423300 Lumber & Other Construction 
       Systems                                       Finishing                          Container Mfg                            Materials
221500 Combination Gas & Electric      316210 Footwear Mfg (including                332510 Hardware Mfg                    423400 Professional & Commercial 
                                                     rubber & plastics)              332610 Spring & Wire Product Mfg            Equipment & Supplies
Construction                           316990 Other Leather & Allied                 332700 Machine Shops; Turned           423500 Metal & Mineral (except 
Construction of Buildings                            Product Mfg                        Product; & Screw, Nut, & Bolt            Petroleum)
236110 Residential Building            Wood Product Manufacturing                       Mfg                                 423600 Household Appliances & 
       Construction                    321110 Sawmills & Wood                        332810 Coating, Engraving, Heat             Electrical & Electronic Goods
236200 Nonresidential Building                       Preservation                       Treating, & Allied Activities       423700 Hardware, & Plumbing & 
       Construction                    321210 Veneer, Plywood, &                     332900 Other Fabricated Metal               Heating Equipment & 
Heavy and Civil Engineering                          Engineered Wood Product            Product Mfg                              Supplies
Construction                                         Mfg                             Machinery Manufacturing                423800 Machinery, Equipment, & 
237100 Utility System Construction     321900 Other Wood Product Mfg                 333100 Agriculture, Construction, &         Supplies
237210 Land Subdivision                                                                 Mining Machinery Mfg

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Codes for Principal Business Activity and Principal Product or Service (Continued)
423910 Sporting & Recreational       455210 Warehouse Clubs,             485990 Other Transit & Ground        522299 Intl, Secondary Market, & 
      Goods & Supplies               Supercenters, & Other Merch          Passenger Transportation            Other Nondepo. Credit 
423920 Toy & Hobby Goods &           Retailers                           Pipeline Transportation              Intermediation
      Supplies                       Health and Personal Care Retailers  486000 Pipeline Transportation       Activities Related to Credit 
423930 Recyclable Materials          456110 Pharmacies & Drug Retailers  Scenic & Sightseeing                 Intermediation
423940 Jewelry, Watch, Precious      456120 Cosmetics, Beauty Supplies,  Transportation                       522300 Activities Related to Credit 
      Stone, & Precious Metals       & Perfume Retailers                 487000 Scenic & Sightseeing          Intermediation (including loan 
423990 Other Miscellaneous Durable   456130 Optical Goods Retailers       Transportation                      brokers, check clearing, & 
                                                                                                              money transmitting)
      Goods                          446190 Other Health & Personal Care Support Activities for               Securities, Commodity Contracts, 
Merchant Wholesalers, Nondurable     Retailers                           Transportation                       and Other Financial Investments 
Goods                                Gasoline Stations & Fuel Dealers    488100 Support Activities for Air    and Related Activities
424100 Paper & Paper Products        457100 Gasoline Stations (including  Transportation                      523150 Investment Banking & 
424210 Drugs & Druggists' Sundries   convenience stores with gas)        488210 Support Activities for Rail   Securities Intermediation
424300 Apparel, Piece Goods, &       457210 Fuel Dealers (including       Transportation                      523160 Commodity Contracts 
      Notions                        Heating Oil & Liquefied             488300 Support Activities for Water  Intermediation
424400 Grocery & Related Products    Petroleum)                           Transportation                      523210 Securities & Commodity 
424500 Farm Product Raw Materials    Clothing & Accessories Retailers    488410 Motor Vehicle Towing          Exchanges
424600 Chemical & Allied Products    458110 Clothing & Clothing          488490 Other Support Activities for  523900 Other Financial Investment 
424700 Petroleum & Petroleum         Accessories Retailers                Road Transportation                 Activities (including portfolio 
      Products                       458210 Shoe Retailers               488510 Freight Transportation        management & investment 
424800 Beer, Wine, & Distilled       458310 Jewelry Retailers             Arrangement                         advice)
      Alcoholic Beverages            458320 Luggage & Leather Goods      488990 Other Support Activities for  Insurance Carriers and Related 
424910 Farm Supplies                 Retailers                            Transportation                      Activities
424920 Book, Periodical, &           Sporting, Hobby, Book, Musical      Couriers and Messengers              524110 Direct Life, Health, & Medical 
      Newspapers                     Instrument, & Miscellaneous         492110 Couriers & Express Delivery   Insurance Carriers
424930 Flower, Nursery Stock, &      Retailers                            Services                            524120 Direct Insurance (except Life, 
      Florists' Supplies             459110 Sporting Goods Retailers     492210 Local Messengers & Local      Health, & Medical) Carriers
424940 Tobacco Products &            459120 Hobby, Toy, & Game            Delivery                            524210 Insurance Agencies & 
      Electronic Cigarettes          Retailers                           Warehousing and Storage              Brokerages
424950 Paint, Varnish, & Supplies    459130 Sewing, Needlework, & Piece  493100 Warehousing & Storage         524290 Other Insurance Related 
424990 Other Miscellaneous           Goods Retailers                      (except lessors of                  Activities (including 
      Nondurable Goods               459140 Musical Instrument &          mini-warehouses &                   third-party administration of 
Wholesale Trade Agents & Agents      Supplies Retailers                   self-storage units)                 insurance and pension funds)
                                                                                                              Funds, Trusts, and Other Financial 
and Brokers                          459210 Book Retailers & News        Information                          Vehicles
425120 Wholesale Trade Agents &      Dealers (including                  Motion Picture and Sound             525100 Insurance & Employee 
      Brokers                        newsstands)                         Recording Industries                 Benefit Funds
                                     459310 Florists                     512100 Motion Picture & Video        525910 Open-End Investment Funds 
Retail Trade                         459410 Office Supplies & Stationery  Industries (except video            (Form 1120-RIC,)
Motor Vehicle and Parts Dealers      Retailers                            rental)                             525920 Trusts, Estates, & Agency 
441110 New Car Dealers               459420 Gift, Novelty, & Souvenir    512200 Sound Recording Industries    Accounts
441120 Used Car Dealers              Retailers                           Publishing Industries                525990 Other Financial Vehicles 
441210 Recreational Vehicle Dealers  459510 Used Merchandise Retailers   513110 Newspaper Publishers          (including mortgage REITs 
441222 Boat Dealers                  459910 Pet & Pet Supplies Retailers 513120 Periodical Publishers         and closed-end investment 
                                                                                                              funds)
441227 Motorcycle, ATV, & All Other  459920 Art Dealers                  513130 Book Publishers               “Offices of Bank Holding Companies” 
      Motor Vehicle Dealers          459930 Manufactured (Mobile) Home   513140 Directory & Mailing List      and “Offices of Other Holding 
441300 Automotive Parts,             Dealers                              Publishers                          Companies” are located under 
      Accessories, & Tire Retailers  459990 All Other Miscellaneous      513190 Other Publishers              Management of Companies 
Building Material and Garden         Retailers (including tobacco,                                            (Holding Companies) below.
Equipment and Supplies Dealers       candle, & trophy retailers)         513210 Software Publishers
444110 Home Centers                  Nonstore Retailers                  Broadcasting & Content Providers     Real Estate and Rental and 
444120 Paint & Wallpaper Stores      Nonstore retailers sell all         & Telecommunications                 Leasing
444140 Hardware Retailers            types of merchandise using          516100 Radio & Television 
                                     such methods as Internet,            Broadcasting Stations               Real Estate
444180 Other Building Material       mail-order catalogs,                516210 Media Streaming, Social       531110 Lessors of Residential 
      Dealers                        interactive television, or direct    Networks, & Other Content           Buildings & Dwellings 
444200 Lawn & Garden Equipment &     sales. These types of                Providers                           (including equity REITs)
      Supplies Retailers             Retailers should select the         517000 Telecommunications            531120 Lessors of Nonresidential 
Food and Beverage Retailers          PBA associated with their            (including Wired, Wireless,         Buildings (except 
                                     primary line of products sold. 
445110 Supermarkets and Other        For example, establishments          Satellite, Cable & Other            Mini-Warehouses) (including 
      Grocery (except                primarily selling prescription       Program Distribution,               equity REITs)
      Convenience) Retailers         and non-prescription drugs,          Resellers, Agents, Other            531130 Lessors of Mini-Warehouses 
445131 Convenience Retailers         select PBA code 456110               Telecommunications, &               & Self-Storage Units 
445132 Vending Machine Operators     Pharmacies & Drug Retailers.         Internet Service Providers)         (including equity REITs)
                                                                         Data Processing, Web Search          531190 Lessors of Other Real Estate 
445230 Fruit & Vegetable Retailers   Transportation and                  Portals, & Other Information         Property (including equity 
445240 Meat Retailers                Warehousing                         Services                             REITs)
445250 Fish & Seafood Retailers      Air, Rail, and Water Transportation 518210 Computing Infrastructure      531210 Offices of Real Estate Agents 
                                                                          Providers, Data Processing,         & Brokers
445291 Baked Goods Retailers         481000 Air Transportation            Web Hosting, & Related              531310 Real Estate Property 
445292 Confectionery & Nut Retailers 482110 Rail Transportation           Services                            Managers
445298 All Other Specialty Food      483000 Water Transportation         519200 Web Search Portals,           531320 Offices of Real Estate 
      Retailers                      Truck Transportation                 Libraries, Archives, & Other        Appraisers
445320 Beer, Wine, & Liquor          484110 General Freight Trucking,     Info. Services                      531390 Other Activities Related to 
      Retailers                      Local                               Finance and Insurance                Real Estate
Furniture and Home Furnishings       484120 General Freight Trucking,    Depository Credit Intermediation     Rental and Leasing Services
Retailers                            Long-Distance                       522110 Commercial Banking            532100 Automotive Equipment Rental 
449110 Furniture Retailers           484200 Specialized Freight Trucking 522130 Credit Unions                 & Leasing
449121 Floor Covering Retailers      Transit and Ground Passenger        522180 Savings Institutions & Other  532210 Consumer Electronics & 
449122 Window Treatment Retailers    Transportation                       Depository Credit                   Appliances Rental
449129 All Other Home Furnishings    485110 Urban Transit Systems         Intermediation                      532281 Formal Wear & Costume 
      Retailers                      485210 Interurban & Rural Bus       Nondepository Credit                 Rental
Electronics and Appliance Retailers  Transportation                      Intermediation                       532282 Video Tape & Disc Rental
449210 Electronics & Appliance       485310 Taxi Service                 522210 Credit Card Issuing           532283 Home Health Equipment 
      Retailers (including           485320 Limousine Service            522220 Sales Financing               Rental
      computers)                                                                                              532284 Recreational Goods Rental
General Merchandise Retailers        485410 School & Employee Bus        522291 Consumer Lending
                                     Transportation                      522292 Real Estate Credit (including 532289 All Other Consumer Goods 
455110 Department Stores             485510 Charter Bus Industry          mortgage bankers &                  Rental
                                                                          originators)                        532310 General Rental Centers

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Codes for Principal Business Activity and Principal Product or Service (Continued)
532400 Commercial & Industrial      561210 Facilities Support Services   Other Ambulatory Health Care         811120 Automotive Body, Paint, 
Machinery & Equipment               561300 Employment Services           Services                                  Interior, & Glass Repair
Rental & Leasing                    561410 Document Preparation          621900 Other Ambulatory Health       811190 Other Automotive Repair & 
Lessors of Nonfinancial Intangible  Services                               Care Services (including                Maintenance (including oil 
Assets (except copyrighted works)   561420 Telephone Call Centers          ambulance services & blood              change & lubrication shops & 
                                                                           & organ banks)                          car washes)
533110 Lessors of Nonfinancial      561430 Business Service Centers      Hospitals                            811210 Electronic & Precision 
Intangible Assets (except           (including private mail centers      622000 Hospitals                          Equipment Repair & 
copyrighted works)                  & copy shops)                                                                  Maintenance
Professional, Scientific, and       561440 Collection Agencies           Nursing and Residential Care         811310 Commercial & Industrial 
Technical Services                  561450 Credit Bureaus                Facilities                                Machinery & Equipment 
Legal Services                      561490 Other Business Support        623000 Nursing & Residential Care         (except Automotive & 
541110 Offices of Lawyers           Services (including                    Facilities                              Electronic) Repair & 
541190 Other Legal Services         repossession services, court         Social Assistance                         Maintenance
                                    reporting, & stenotype               624100 Individual & Family Services  811410 Home & Garden Equipment & 
Accounting, Tax Preparation,        services)                            624200 Community Food & Housing,          Appliance Repair & 
Bookkeeping, and Payroll Services   561500 Travel Arrangement &            & Emergency & Other Relief              Maintenance
541211 Offices of Certified Public  Reservation Services                   Services                           811420 Reupholstery & Furniture 
Accountants                         561600 Investigation & Security      624310 Vocational Rehabilitation          Repair
541213 Tax Preparation Services     Services                               Services                           811430 Footwear & Leather Goods 
541214 Payroll Services             561710 Exterminating & Pest Control  624410 Childcare Services                 Repair
541219 Other Accounting Services    Services                             Arts, Entertainment, and             811490 Other Personal & Household 
                                                                                                                   Goods Repair & Maintenance
Architectural, Engineering, and     561720 Janitorial Services           Recreation                           Personal and Laundry Services
Related Services                    561730 Landscaping Services
541310 Architectural Services       561740 Carpet & Upholstery Cleaning  Performing Arts, Spectator Sports,   812111 Barber Shops
541320 Landscape Architecture       Services                             and Related Industries               812112 Beauty Salons
Services                            561790 Other Services to Buildings & 711100 Performing Arts Companies     812113 Nail Salons
541330 Engineering Services         Dwellings                            711210 Spectator Sports (including   812190 Other Personal Care Services 
541340 Drafting Services            561900 Other Support Services          sports clubs & racetracks)              (including diet & weight 
541350 Building Inspection Services (including packaging &               711300 Promoters of Performing Arts,      reducing centers)
541360 Geophysical Surveying &      labeling services, &                   Sports, & Similar Events           812210 Funeral Homes & Funeral 
Mapping Services                    convention & trade show              711410 Agents & Managers for              Services
                                    organizers)                            Artists, Athletes, Entertainers, 
541370 Surveying & Mapping (except  Waste Management and                   & Other Public Figures             812220 Cemeteries & Crematories
Geophysical) Services               Remediation Services                 711510 Independent Artists, Writers, 812310 Coin-Operated Laundries & 
541380 Testing Laboratories &       562000 Waste Management &              & Performers                            Drycleaners
Services                            Remediation Services                 Museums, Historical Sites, and       812320 Drycleaning & Laundry 
Specialized Design Services         Educational Services                 Similar Institutions                      Services (except 
541400 Specialized Design Services                                       712100 Museums, Historical Sites, &       Coin-Operated)
(including interior, industrial,    611000 Educational Services            Similar Institutions               812330 Linen & Uniform Supply
graphic, & fashion design)          (including schools, colleges,        Amusement, Gambling, and             812910 Pet Care (except Veterinary) 
Computer Systems Design and         & universities)                      Recreation Industries                     Services
Related Services                    Health Care and Social               713100 Amusement Parks & Arcades     812920 Photofinishing
541511 Custom Computer              Assistance                           713200 Gambling Industries           812930 Parking Lots & Garages
Programming Services                Offices of Physicians and Dentists   713900 Other Amusement &             812990 All Other Personal Services
541512 Computer Systems Design      621111 Offices of Physicians (except   Recreation Industries              Religious, Grantmaking, Civic, 
Services                            mental health specialists)             (including golf courses, skiing    Professional, and Similar 
541513 Computer Facilities          621112 Offices of Physicians, Mental   facilities, marinas, fitness       Organizations
Management Services                 Health Specialists                     centers, & bowling centers)        813000 Religious, Grantmaking, 
541519 Other Computer Related       621210 Offices of Dentists           Accommodation and Food                    Civic, Professional, & Similar 
Services                                                                                                           Organizations (including 
Other Professional, Scientific, and Offices of Other Health              Services                                  condominium and 
Technical Services                  Practitioners                        Accommodation                             homeowners associations)
541600 Management, Scientific, &    621310 Offices of Chiropractors      721110 Hotels (except Casino Hotels) Other
Technical Consulting                621320 Offices of Optometrists         & Motels                           999999 Unclassified Establishments 
Services                            621330 Offices of Mental Health      721120 Casino Hotels                      (unable to classify)
541700 Scientific Research &        Practitioners (except                721191 Bed & Breakfast Inns
Development Services                Physicians)                          721199 All Other Traveler 
541800 Advertising & Public         621340 Offices of Physical,            Accommodation
Relations, & Related Services       Occupational & Speech                721210 RV (Recreational Vehicle) 
541910 Marketing Research & Public  Therapists, & Audiologists             Parks & Recreational Camps
Opinion Polling                     621391 Offices of Podiatrists        721310 Rooming & Boarding Houses, 
541920 Photographic Services        621399 Offices of All Other            Dormitories, & Workers’ 
541930 Translation & Interpretation Miscellaneous Health                   Camps
Services                            Practitioners                        Food Services and Drinking Places
541940 Veterinary Services          Outpatient Care Centers              722300 Special Food Services 
541990 All Other Professional,      621410 Family Planning Centers         (including food service 
Scientific, & Technical             621420 Outpatient Mental Health &      contractors & caterers)
Services                            Substance Abuse Centers              722410 Drinking Places (Alcoholic 
Management of Companies             621491 HMO Medical Centers             Beverages)
(Holding Companies)                 621492 Kidney Dialysis Centers       722511 Full Service Restaurants
551111 Offices of Bank Holding      621493 Freestanding Ambulatory       722513 Limited Service Restaurants
Companies                           Surgical & Emergency                 722514 Cafeterias, Grill Buffets, 
                                    Centers                                Buffets
551112 Offices of Other Holding     621498 All Other Outpatient Care     722515 Snack & Nonalcoholic 
Companies                           Centers                                Beverage Bars
Administrative and Support and      Medical and Diagnostic               Other Services
Waste Management and                Laboratories
Remediation Services                621510 Medical & Diagnostic          Repair and Maintenance
                                    Laboratories                         811110 Automotive Mechanical & 
Administrative and Support          Home Health Care Services              Electrical Repair & 
Services                                                                   Maintenance
561110 Office Administrative        621610 Home Health Care Services
Services

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Index
 
                                 Exceptions to Filing 3                                           Schedules K-2 (Form 8865), 
10% interest 5                     Constructive owners 4          S                                Partners’ Distributive Share 
                                                                                                   Items—International, and 
50% interest 5                     Multiple Category 1 filers 3   Schedule A-1. Certain partners   K-3 (Form 8865), Partner’s 
                                                                      of Foreign Partnership 10    Share of Income, 
A                                F                                Schedule A-2. Foreign Partners   Deductions, Credits, 
Acquisitions 3                   Foreign Address 7                    of Section 721(c)            etc.—International    16
Analysis of partners' capital    Foreign Partnership  5               Partnership 10              Schedules K, Partners' 
  accounts   17                  Future Developments   1          Schedule A-3. Affiliation        Distributive Share Items and 
Attached statements     16                                            Schedule 10                  K-1 (Form 8865), Partner’s 
                                                                  Schedule A. Constructive         Share of Income, 
                                 G                                    Ownership of Partnership     Deductions, Credits, Etc. 15
B                                                                     Interest 10                 Specific Instructions  7
                                 General Instructions 1
Balance sheets per books      16 General Reporting Instructions   Schedule B. Income Statement–
                                   for Schedule K-1   15              Trade or Business           T
C                                                                     Income   10
                                                                  Schedule D. Capital Gains and   Tax Year 7
Categories of Filers 2           H                                    Losses   11                 Treaty-based Return 
  Category 1 filer 2 8 10,  ,    Hyperinflationary Exception    8 Schedule G (Form 8865).          Positions  6
  Category 2 filer 3 8,                                               Statement of Application of 
                                                                      the Gain Deferral Method    U
  Category 3 filer 3 8 10,  ,    I                                    Under Section 721(c)  11
  Category 4 filer 3 8,                                                                           U.S. Person 5
Change in a Proportional         Identifying Numbers and          Schedule H (Form 8865). 
  Interest  6                      Addresses   7                      Acceleration Events and 
                                                                      Exceptions Reporting        W
Changes in Proportional                                               Relating to Gain Deferral 
  Interests 3                    L                                    Method Under Section        What’s New  1
Consolidated Return     7        List of Codes Used in                721(c) 13                   When To File 5
Constructive Ownership        5    Schedule K-1 (Form             Schedule N. Transactions        Who Must File 1
Control of a Corporation      6    8865)  21                          Between Controlled Foreign 
Corrections to Form 8865      6                                       Partnership and Partners or 
                                                                      Other Related Entities 17
                                 P                                Schedule O (Form 8865). 
D                                Partnership 5                        Transfer of Property to a 
Definitions 5                    Penalties 6                          Foreign Partnership 17
Dispositions 3                   Purpose of Form 1                Schedule P (Form 8865). 
                                                                      Acquisitions, Dispositions, 
                                                                      and Changes of Interests in 
E                                R                                    a Foreign Partnership  19
Exceptions for Filing:           Relief for Category 1 and 2 
  Category 4 filers 4              filers 4

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