8804 (Sch A) Penalty for Underpayment of Etimated Section 1446 Tax by

2007 Schedule A (Form 8804)
Penalty for Underpayment of Estimated Section 1446 Tax by
Partnerships
Purpose:

This is the first circulation of the 2007 Schedule A (Form 8804),
Penalty for Underpayment of Estimated Section 1446 Tax by
Partnerships. There is a discussion of major changes below.

TPCC Meeting:

None scheduled, but may be arranged if requested.

Prior Revision:

The 2006 Schedule A (Form 8804),
Penalty for Underpayment of Estimated Section 1446 Tax by
Partnerships, is available at:
http://www.irs.gov/pub/irs-pdf/f8804sa.pdf

Other products:

Circulations of draft tax forms and instructions are posted at:
http://taxforms.web.irs.gov/draft_products.html.

Comments:

Please email, fax, call, or mail any comments by August 31,
2007, to me and email the form’s reviewer, Steve Becker, at
[email protected].

From:
Oksana R. Stowbunenko
Tax Law Specialist
Tax Forms and
Publications

VMS: 202.283.0020
Location: Date:
Fax: 202.283.2485
NCFB
August 1,
C7-162
2007
E-mail:
[email protected]

Major Changes
We deleted all items on the form and in the instructions that were added last year to reflect
section 401 of the Tax Increase Prevention and Reconciliation Act of 2006. That section has
no applicability with respect to the 2007 form. The items that were deleted include:
•
•
•
•

The third checkbox in Part I of the form.
The “Caution” at the end of Part III, line 5.
Item #3 under Who Must File.
The instructions for Part III, line 5.

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transmitted all R
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Date

I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
Schedule A (FORM 8804), PAGE 1 OF 8
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES.
PRINTS: HEAD TO HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
1
FLAT SIZE: 216 mm (8 ⁄ 2 ") 3 279 mm (11")
PERFORATE: NONE
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Schedule A
(Form 8804)

Action

Date

O.K. to print
Revised proofs
requested

Penalty for Underpayment of Estimated
Section 1446 Tax by Partnerships

Department of the Treasury
Internal Revenue Service
Name

Signature

OMB No. 1545-1119

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©

2007

Attach to Form 8804.

Employer identification number

Note. Generally, the partnership is not required to file this Schedule A (see Part I below for exceptions) because the IRS will figure
any penalty owed and bill the partnership. However, the partnership may still use this Schedule A to figure the penalty. If so, enter
the amount from page 4, line 63 on line 8 of Form 8804, but do not attach this Schedule A.

Part I

Reasons for Filing—Check the boxes below that apply. If any boxes are checked, the partnership must
file Schedule A (Form 8804) even if it does not owe a penalty (see instructions).
The partnership is using the adjusted seasonal installment method.
The partnership is using the annualized income installment method.

Part II Current Year and Prior Year Safe Harbors
1
2

3

Enter the total section 1446 tax shown on the partnership’s 2007 Form 8804, line 5e. If less than $500,
do not complete or file this form. The partnership does not owe the penalty

1

Enter the total section 1446 tax that would be due for 2007, without regard to partner certificates, computed
using the effectively connected taxable income (ECTI) allocable to foreign partners for 2006.
Caution: This line 2 amount only applies if certain conditions are met (see instructions)
Enter the smaller of line 1 or line 2. If the partnership is required to skip line 2, enter the amount from line 1

2
3

Part III Figuring the Underpayment

(a)

4

Installment due dates. Enter in columns (a) through (d)
the 15th day of the 4th, 6th, 9th, and 12th months of the
partnership’s tax year

5

Estimated section 1446 tax paid or credited for each
period (see instructions). For column (a) only, enter the
amount from line 6 on line 10

6

7

Complete lines 7 through 13 of one column before
going to the next column.
Enter amount, if any, from line 13 of the preceding column

7

8

Add lines 6 and 7

8

9

Add amounts on lines 11 and 12 of the preceding column

9

10

Subtract line 9 from line 8. If zero or less, enter -0-

10

11

If the amount on line 10 is zero, subtract line 8 from line
9. Otherwise, enter -0-

11

6

12

13

(c)

(d)

4

Required installments. If the partnership uses the
adjusted seasonal installment method and/or the
annualized income installment method, enter the amounts
from line 43. If neither of those methods is used, enter
25% of line 3 above in each column

5

(b)

Underpayment. If line 10 is less than or equal to line 5,
subtract line 10 from line 5. Then go to line 7 of the next
12
column. Otherwise, go to line 13
Overpayment. If line 5 is less than line 10, subtract line
13
5 from line 10. Then go to line 7 of the next column
Go to Part VII on page 4 to figure the penalty. Do not go to Part VII if there are no entries on line 12—no penalty is owed.

For Paperwork Reduction Act Notice, see page 7.

Cat. No. 40853F

Schedule A (Form 8804) 2007

3
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
Schedule A (FORM 8804), PAGE 2 of 8
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
FLAT SIZE: 216 mm (81⁄ 2 ") 3 279 mm (11")
PERFORATE:NONE

PRINTS: HEAD TO HEAD
INK: BLACK

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Schedule A (Form 8804) 2007

Part IV

Page

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Check this box if the partnership has elected to attach a schedule
that expands lines 15 and 22 through 25 to reflect Reg.
©
1.1446-3(a)(2) (see instructions)
14

2

Adjusted Seasonal Installment Method (Caution: Use this method only if the base period percentage
for any 6 consecutive months is at least 70%. See instructions.)
(a)

(b)

(c)

(d)

First 3
months

First 5
months

First 8
months

First 11
months

First 4
months

First 6
months

First 9
months

Entire year

Enter effectively connected taxable income allocable to all foreign
partners for the following periods:
a Tax year beginning in 2004
b Tax year beginning in 2005
c Tax year beginning in 2006

15

Enter effectively connected taxable income allocable to all foreign
partners for each period for the tax year beginning in 2007.

16

14a

14b
14c
15

Enter effectively connected taxable income allocable to all foreign
partners for the following periods:
a Tax year beginning in 2004
b Tax year beginning in 2005
c Tax year beginning in 2006

16a

16b
16c

17

Divide the amount in each column on line 14a by the amount in
column (d) on line 16a.

17

18

Divide the amount in each column on line 14b by the amount in
column (d) on line 16b.

18

19

Divide the amount in each column on line 14c by the amount in
column (d) on line 16c.

19

20

Add lines 17 through 19.

20

21

Divide line 20 by 3.

21

22

Divide line 15 by line 21.

22

23

Reduction to line 22 amount for valid certifications received from
foreign partners under Regulations section 1.1446-6T (see
instructions for effective dates before completing this line).

23

24

Subtract line 23 from line 22. If zero or less, enter -0-.

24

25

Multiply line 24 by 35%.

25

26a Divide the amount in columns (a) through (c) on line 16a by the
amount in column (d) on line 16a.

26a

b Divide the amount in columns (a) through (c) on line 16b by the
amount in column (d) on line 16b.

26b

c Divide the amount in columns (a) through (c) on line 16c by the
amount in column (d) on line 16c.

26c

27

Add lines 26a through 26c.

27

28

Divide line 27 by 3.

28

29

Multiply the amount in columns (a) through (c) of line 25 by
columns (a) through (c) of line 28. In column (d), enter the amount
from line 25, column (d).

29
Schedule A (Form 8804) 2007

3
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
Schedule A (FORM 8804), PAGE 3 of 8
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
FLAT SIZE: 216 mm (81⁄ 2 ") 3 279 mm (11")
PERFORATE:NONE

PRINTS: HEAD TO HEAD
INK: BLACK

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Page

Schedule A (Form 8804) 2007

Part V

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(a)

First
months

30

Annualization periods (see instructions).

31

Enter effectively connected taxable income allocable to all
foreign partners for each annualization period:

a Net ordinary income
b 28% rate gains (non-corporate partners only).
c Unrecaptured section 1250 gains (non-corporate partners only).
d Qualified dividend income and net long-term capital gains
(including net section 1231 gains) (non-corporate partners only).
32 Annualization amounts (see instructions).
33

Annualized effectively connected taxable income allocable to all
foreign partners:
a Net ordinary income (multiply line 31a by line 32).
b Reduction to line 33a for valid partner certificates under
Regulations section 1.1446-6T (see instructions).
c Subtract line 33b from line 33a.

First
months

(d)
First
months

31d
32

33a

33b
33c

e Reduction to line 33d for valid partner certificates under
Regulations section 1.1446-6T (see instructions).

33e

f

33f

g Unrecaptured section 1250 gains allocable to non-corporate
partners (multiply line 31c by line 32—see instructions).

33g

h Qualified dividend income and net long-term capital gains
(including net section 1231 gains) allocable to non-corporate
partners (multiply line 31d by line 32).

33h

i

Reduction to line 33h for valid partner certificates under
Regulations section 1.1446-6T (see instructions).

j

Subtract line 33i from line 33h.

33i
33j

Figure the tax on line 33 amounts as follows:
Multiply line 33c by 35%.
Multiply line 33f by 28%.
Multiply line 33g by 25%.
Multiply line 33j by 15%.
Add lines 34a through 34d.
Applicable percentage.
Multiply line 34e by line 35.

34a
34b
34c
34d
34e
35
36

a
b
c
d
e
35
36

First
months

(c)

31a
31b
31c

33d

Subtract line 33e from line 33d.

(b)

30

d 28% rate gains allocable to non-corporate partners (multiply
line 31b by line 32).

34

3

Annualized Income Installment Method

25%

50%

75%

100%

1st
installment

2nd
installment

3rd
installment

4th
installment

Part VI Required Installments
Note. Complete lines 37 through 43 of one column before
completing the next column.
37

If only Part IV or Part V is completed, enter the amount in each
column from line 29 or line 36. If both parts are completed,
enter the smaller of the amounts in each column from line 29
or line 36.

38

Add the amounts in all preceding columns of line 43 (see
instructions).

38

39

Adjusted seasonal or annualized income installments.
Subtract line 38 from line 37. If zero or less, enter -0-.
Enter 25% of line 1 in each column.

39
40

Subtract line 43 of the preceding column from line 42 of the
preceding column.
Add lines 40 and 41.

41
42

Required installments. Enter the smaller of line 39 or line 42
here and on line 5 (see instructions).

43

40
41
42
43

37

Schedule A (Form 8804) 2007

3
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
Schedule A (FORM 8804), PAGE 4 of 8
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
FLAT SIZE: 216 mm (81⁄ 2 ") 3 279 mm (11")
PERFORATE:NONE

PRINTS: HEAD TO HEAD
INK: BLACK

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Schedule A (Form 8804) 2007

Page

Part VII Figuring the Penalty

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(a)

44 Enter the date of payment or the 15th day of the 4th month
after the close of the tax year, whichever is earlier (see
instructions). Partnerships that keep their records and
books of account outside the United States and Puerto
Rico: Use 6th month instead of 4th month.

44

45 Number of days from due date of installment on line 4 to
the date shown on line 44

45

46 Number of days on line 45 after 4/15/2007 and before 10/1/2007

46

47 Underpayment on line 12 × Number of days on line 46 × 8%

47 $

48 Number of days on line 45 after 9/30/2007 and before 1/1/2008

48

49 Underpayment on line 12 × Number of days on line 48 × X%

49 $

50 Number of days on line 45 after 12/31/2007 and before 4/1/2008

50

51 Underpayment on line 12 × Number of days on line 50 × *%

51 $

52 Number of days on line 45 after 3/31/2008 and before 7/1/2008

52

53 Underpayment on line 12 × Number of days on line 52 × *%

53 $

54 Number of days on line 45 after 6/30/2008 and before 10/1/2008

54

55 Underpayment on line 12 × Number of days on line 54 × *%

55 $

56 Number of days on line 45 after 9/30/2008 and before 1/1/2009

56

57 Underpayment on line 12 × Number of days on line 56 × *%

57 $

58 Number of days on line 45 after 12/31/2008 and before 4/1/2009

58

59 Underpayment on line 12 × Number of days on line 58 × *%

59 $

60 Number of days on line 45 after 3/31/2009 and before 5/16/2009

60

61 Underpayment on line 12 × Number of days on line 60 × *%
62 Add lines 47, 49, 51, 53, 55, 57, 59, and 61

365

365

366

(b)

(c)

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

61 $

$

$

$

62 $

$

$

$

4

(d)

366

366

366

365

365

63 Penalty. Add columns (a) through (d) of line 62. Enter the total here and on Form 8804, line 8

63

$

*For underpayments paid after March 31, 2008: For lines 51, 53, 55, 57, 59, and 61 use the penalty interest rate for each calendar quarter,
which the IRS will determine during the first month in the preceding quarter. These rates are published quarterly in an IRS News Release
and in a revenue ruling in the Internal Revenue Bulletin. To obtain this information on the Internet, access the IRS website at www.irs.gov.
You can also call 1-800-829-1040 to get interest rate information.
Schedule A (Form 8804) 2007

3
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
Schedule A (FORM 8804), PAGE 5 of 8
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
FLAT SIZE: 216 mm (81⁄ 2 ") 3 279 mm (11")
PERFORATE:NONE

PRINTS: HEAD TO HEAD
INK: BLACK

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Page 5

Schedule A (Form 8804) 2007

General Instructions
Purpose of Form

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Partnerships that have effectively connected taxable income
(ECTI) allocable to foreign partners use Schedule A (Form
8804) to determine:
● Whether they are subject to the penalty for underpayment of
estimated tax and, if so,
● The amount of the underpayment penalty.

Who Must File

Generally, the partnership does not have to file this schedule
because the IRS will figure the amount of the penalty and
notify the partnership of any amount due. However, even if the
partnership does not owe a penalty, complete and attach this
schedule to the partnership’s Form 8804 if the Part II, line 1
amount on page 1 is $500 or more and either of the following
applies:
1. The adjusted seasonal installment method is used.
2. The annualized income installment method is used.

Who Must Pay the Underpayment Penalty

Generally, a partnership is subject to the penalty if it did not
timely pay at least the smaller of:

1. The tax shown on line 5e of its 2007 Form 8804 or
2. The total section 1446 tax that would be due for 2007,
without regard to partner certificates, computed using the
ECTI allocable to foreign partners for 2006, provided that (1)
this amount is at least 50% of the sum of the amounts shown
on lines 4c, 4f, 4g, and 4j of its 2007 Form 8804 and (2) the tax
year was for a full 12 months. See the instructions for line 2
below for more details.
In these instructions, “Form 8804” generally refers
the partnership’s original Form 8804. However,
TIP to
an amended Form 8804 is considered the original
Form 8804 if the amended Form 8804 is filed by the
due date (including extensions) of the original Form 8804.
The penalty is figured separately for each installment due
date. Therefore, the partnership may owe a penalty for an
earlier due date even if it paid enough tax later to make up the
underpayment. This is true even if the partnership is due a
refund when its return is filed. However, the partnership may
be able to reduce or eliminate the penalty by using the
annualized income installment method or the adjusted
seasonal installment method. See the instructions for Parts IV
and V for details.

Exception to the Penalty
A partnership will not have to pay a penalty if the tax shown
on line 5e of its 2007 Form 8804 is less than $500.

How To Use Schedule A
Complete this schedule as follows:
● Check one or both of the boxes in Part I that apply. If the
partnership checks a box in Part I, attach Schedule A (Form
8804) to Form 8804. Be sure to check the box on Form 8804,
line 8.
● If Part II, line 1 is $500 or more, complete the rest of page 1
to determine the underpayment for any of the installment due
dates.
● If there is an underpayment on line 12 (column (a), (b), (c), or
(d)), go to Part VII to figure the penalty.
● Complete Parts IV through VI as appropriate if the
partnership uses the adjusted seasonal installment method
and/or the annualized income installment method.

Specific Instructions

Part I. Reasons for Filing

Adjusted seasonal installment method and/or annualized
income installment method. If the partnership’s income
varied during the year because, for example, it operated its
business on a seasonal basis, it may be able to lower or
eliminate the amount of one or more required installments by
using the adjusted seasonal installment method and/or the
annualized income installment method.
Example. A ski shop, which receives most of its income
during the winter months, may benefit from using one or both
of these methods to figure its required installments. The
annualized income installment or adjusted seasonal
installment may be less than the required installment under
the current year safe harbor (increased by any reduction
recaptured under section 6655(e)(1)(B)) for one or more due
dates. Using one or both of these methods may reduce or
eliminate the penalty for those due dates.
Use Parts IV through VI on pages 2 and 3 of Schedule A
(Form 8804) to figure one or more required installments. If
Parts IV through VI are used for any payment due date, those
Parts must be used for all subsequent payment due dates. To
arrive at the amount of each required installment, Part VI uses
the smallest of:
● The adjusted seasonal installment (if applicable),
● The annualized income installment (if applicable), or
● The current year safe harbor (increased by any reduction
recaptured under section 6655(e)(1)(B)).
Follow the steps below to determine which parts of the
form have to be completed.
● If the partnership is using only the adjusted seasonal
installment method, check the applicable box in Part I and
complete Parts IV and VI of Schedule A (Form 8804).
● If the partnership is using only the annualized income
installment method, check the applicable box in Part I and
complete Parts V and VI of Schedule A (Form 8804).
● If the partnership is using both methods, check both of the
boxes in Part I and complete all three parts (Parts IV through
VI) of Schedule A (Form 8804).

Part II. Current Year and Prior Year Safe
Harbors
Line 2 (prior year safe harbor). Enter the total section 1446
tax that would be due for 2007, without regard to partner
certificates, computed using the ECTI allocable to foreign
partners for 2006.
The partnership may generally use the prior year safe
harbor only if it paid the required amount using that method
for each of its installment payments of section 1446 tax during
the tax year. However, see Regulations section
1.1446-3(b)(3)(ii) for an exception. Also, see the Note below. In
addition, the partnership may only use the prior year safe
harbor if all of the following apply:
● Each installment payment that was made during the tax
year, when averaged with all prior installment payments, must
have been 25% of the partnership’s section 1446 tax liability
under the prior year safe harbor.
● The prior tax year consisted of 12 months,
● The partnership timely files (including extensions) a U.S.
return of partnership income (e.g., Form 1065) for the prior tax
year, and
● The amount of ECTI for the prior tax year is not less than
50% of the ECTI shown on the current year Form 8804 that is
(or will be) timely filed.

3
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
Schedule A (FORM 8804), PAGE 6 of 8
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
FLAT SIZE: 216 mm (81⁄ 2 ") 3 279 mm (11")
PERFORATE:NONE

PRINTS: HEAD TO HEAD
INK: BLACK

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Page 6

Schedule A (Form 8804) 2007

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If any of the above applies, skip line 2 and enter on line 3
the amount from line 1.
Note. If the partnership qualifies for and uses the exception
under Regulations section 1.1446-3(b)(3)(ii) to switch to the
standard option annualization method during the tax year,
the partnership should include on line 2 the total of all
installment payments that were made during the tax year
under both the prior year safe harbor method and the
standard option annualization method. Attach a schedule that
explains the computation.

Part III. Figuring the Underpayment

Line 6. Enter the estimated tax payments made by the
partnership for its tax year as indicated below. Include any
overpayment from line 13 of the partnership’s 2006 Form
8804 that was credited to the partnership’s 2007 Form 8804.
If an installment is due on a Saturday, Sunday, or legal
holiday, payments made on the next day that is not a
Saturday, Sunday, or legal holiday are considered made on
the due date to the extent the payment is applied against
that required installment.
Also include on line 6 any:
● Section 1446 tax paid or withheld by another partnership in
which the partnership filing this Schedule A (Form 8804) was a
partner during the tax year. See the instructions for Form
8804, line 6b, in the instructions for Forms 8804, 8805, and
8813.
● Section 1445(a) or 1445(e)(1)(B) tax withheld from or paid by
the partnership filing this Schedule A (Form 8804) during the
tax year for a disposition of a U.S. real property interest. See
the instructions for Form 8804, line 6c, in the instructions for
Forms 8804, 8805, and 8813.
Column (a). Enter payments made by the date on line 4,
column (a).
Columns (b), (c), and (d). Enter payments made by the
date on line 4 for that column and after the date on line 4 of
the preceding column.
Line 12. If any of the columns in line 12 shows an
underpayment, complete Part VII to figure the penalty.

Part IV. Adjusted Seasonal Installment
Method
Note. Part IV does not reflect the lower preferential rates
permitted under Regulations section 1.1446-3(a)(2). This was
done because, for most taxpayers, the income reported in
Part IV will be predominantly (or exclusively) ordinary income.
If the partnership wishes to consider lower preferential rates
for Part IV (and if the requirements outlined in the second
paragraph of the line 31 instructions are met), it must attach
a schedule which appropriately expands lines 15 and 22
through 25 to show the applicable special types of income or
gain and the applicable percentages (see, for example, lines
33 and 34 of this schedule).
The partnership may use the adjusted seasonal installment
method only if the partnership’s base period percentage for
any 6 consecutive months of the tax year is 70% or more.
The base period percentage for any period of 6 consecutive
months is the average of the 3 percentages figured by
dividing the ECTI for the corresponding 6 consecutive month
period in each of the 3 preceding tax years by the ECTI for
each of their respective tax years. Figure the base period
percentage using the 6-month period in which the
partnership normally receives the largest part of its ECTI.

Example. An amusement park with a 2007 calendar tax
year receives the largest part of its taxable income during a
6-month period, May through October. To compute its base
period percentage for this 6-month period, the amusement
park figures its ECTI for each May-October period in 2004,
2005, and 2006. It then divides the ECTI for each
May-October period by the total ECTI for that particular tax
year. The resulting percentages are: 69% (.69) for
May-October 2004, 74% (.74) for May-October 2005, and
67% (.67) for May-October 2006. Because the average of
69%, 74%, and 67% is 70%, the base period percentage for
May through October 2007 is 70%. Therefore, the
amusement park qualifies for the adjusted seasonal
installment method.
Line 23. Enter the reduction to the line 22 amount by reason
of valid certificates received from foreign partners under
Regulations section 1.1446-6T. See Certification of
Deductions and Losses in the instructions for Forms 8804,
8805, and 8813 for additional information.

Part V. Annualized Income Installment
Method
Line 30. Annualization periods. Enter on line 30, columns
(a) through (d), respectively, the annualization periods for the
option listed below. For example, if the partnership elected
Option 1, enter on line 30 the annualization periods 2, 4, 7,
and 10, in columns (a) through (d), respectively.
Use Option 1 or Option 2 only if the partnership
elected to do so by filing Form 8842, Election To
Use Different Annualization Periods for Corporate
CAUTION Estimated Tax, by the due date of the first required
installment payment. Once made, the election is irrevocable
for the particular tax year.
4th
3rd
2nd
1st
Installment Installment Installment Installment

Standard option
Option 1

3
2

3
4

6
7

9
10

Option 2

3

5

8

11

Line 31. Enter on lines 31a through 31d the ECTI allocable to
all foreign partners for the months entered for each
annualization period in columns (a) through (d) on line 30.
With respect to lines 31b through 31d, enter the specified
types of income allocable to noncorporate partners if (a) such
partners would be entitled to use a preferential rate on such
income or gain (see Regulations section 1.1446-3(a)(2)) and (b)
the partnership has sufficient documentation to meet the
requirements of Regulations section 1.1446-3(a)(2)(ii).
If the partnership has net ordinary loss, net short-term
capital loss, or net 28% capital loss, each net loss should be
netted against the appropriate categories of income and gain
to determine the amounts of income and gain to be entered
on lines 31b, 31c, and 31d, respectively. See section 1(h) and
Notice 97-59, 1997-45 I.R.B. 7, for rules for netting gains and
losses. In addition, if the partnership has received any
certificates under Regulations section 1.1446-6T, then the
netting rules of section 1(h) and Notice 97-59 must be
considered in determining the category of income such items
offset.

3
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
Schedule A (FORM 8804), PAGE 7 of 8 (PAGE 8 IS BLANK)
PRINTS: HEAD TO HEAD
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
1
FLAT SIZE: 216 mm (8 ⁄ 2 ") 3 279 mm (11")
PERFORATE:NONE

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Page 7

Schedule A (Form 8804) 2007

Line 32. Annualization amounts. Enter on line 32, columns
(a) through (d), respectively, the annualization amounts shown
in the tables below for the option used for line 30. For
example, if the partnership elected Option 1, enter on line 32
the annualization amounts 6, 3, 1.71429, and 1.2, in columns
(a) through (d), respectively.

Line 44. A payment of estimated tax is applied against
underpayments of required installments in the order that
installments are required to be paid, regardless of the
installment to which the payment pertains.
Example. A partnership underpaid the April 15 installment
by $1,000. The June 15 installment requires a payment of
$2,500. On June 11, the partnership deposits $2,500 to
cover the June 15 installment. However, $1,000 of this
payment is applied against the April 15 installment. The
penalty for the April 15 installment is figured to June 11 (57
days). The remaining $1,500 is applied to the June 15
installment as if it were made on June 15.
If the partnership has made more than one payment for a
required installment, attach a separate computation for each
payment.

f
o
s
a
7
t
0
f
0
a
2
r
/
D /08
8
0

4th
3rd
2nd
1st
Installment Installment Installment Installment

Standard option

4

4

Option 1

6

3

1.71429

1.2

Option 2

4

2.4

1.5

1.09091

2

1.33333

Lines 33b, 33e, and 33i. Enter the reduction amounts by
reason of valid certificates received from foreign partners
under Regulations section 1.1446-6T. See Certification of
Deductions and Losses in the instructions for Forms 8804,
8805, and 8813 for additional information.
Lines 33g. Multiply line 31c by line 32 to determine the
unrecaptured section 1250 gains allocable to non-corporate
partners. If you have a reduction to this amount due to the
application of the netting rules referred to in the last
sentence of the line 31 instructions above, net this reduction
against the unrecaptured section 1250 gains allocable to
non-corporate partners before entering this amount on line
33g. Also attach a schedule showing (1) the amount of
partnership level unrecaptured section 1250 gains allocable
to foreign partners before the reduction caused by partner
level certificates under Regulations section 1.1446-6T; (2) the
amount of the reduction for certificates under Regulations
section 1.1446-6T; and (3) the net amount reported on line
33g.

Part VI. Required Installments
Line 38. Before completing line 38 in columns (b) through (d),
complete lines 39 through 43 in each of the preceding
columns. For example, complete lines 39 through 43 in
column (a) before completing line 38 in column (b).
Line 43. For each installment, enter the smaller of line 39 or
line 42 on line 43. Also enter the result on line 5.

Part VII. Figuring the Penalty
Complete Part VII to determine the amount of the penalty.
The penalty is figured for the period of underpayment using
the underpayment rate determined under section 6621(a)(2).
The period of underpayment runs from the installment due
date to the earlier of the date the underpayment is actually
paid or the 15th day of the fourth month after the close of
the 2007 tax year (the 15th day of the 6th month if the
partnership keeps its books and records outside the United
States and Puerto Rico). For information on obtaining the
interest rate on underpayments paid after March 31, 2008,
see the footnote on page 4 of the schedule.

Paperwork Reduction Act Notice. We ask for the
information on this form to carry out the Internal Revenue
laws of the United States. You are required to give us the
information. We need it to ensure that you are complying
with these laws and to allow us to figure and collect the right
amount of tax.
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.
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated
average time is:

Form
8804, Schedule A, Parts II,
III, and VII

Recordkeeping
27 hr., 58 min.

Learning
about the law
or the form
47 min.

Preparing and
sending the
form to the IRS
1 hr., 17 min.

8804, Schedule A, Part IV

20 hr., 5 min.

24 min.

44 min.

8804, Schedule A, Part V

21 hr., 3 min.

30 min.

52 min.

8804, Schedule A, Part VI

6 hr., 13 min.

——

6 min.

If you have comments concerning the accuracy of these
time estimates or suggestions for making this form simpler,
we would be happy to hear from you. See the instructions for
the tax return with which this form is filed.