8865 Return of U.S. Persons With Respect to Certain Foreign P

2007 Form 8865, Return of U.S. Persons With
Respect to Certain Foreign Partnerships
Purpose: This is the first circulated draft of the 2007 form 8865 for your review and
comments. See below for a discussion of the major changes.
TPCC Meeting: None, but one may be arranged if requested.
Prior Version: The 2006 Form 8865 is available at:
http://www.irs.gov/pub/irs-pdf/f8865.pdf.
Instructions: The 2007 Instructions for Form 8865 will be circulated at a later
date. The 2006 instructions are available at: http://www.irs.gov/pub/irs-pdf/i8865.pdf.
Other Products: Circulations of draft tax forms, instructions, notices, and publications
are posted at: http://taxforms.web.irs.gov/draft_products.html.
Comments: Please email, fax, call, or mail any comments by July 27, 2007, to me at the
address below and email the form’s reviewer, Sharon Dewsbury, at
[email protected].
Kelli Patilla
Tax Forms and Publications
SE:W:CAR:MP:T:B
Phone: 202-283-2734
Email: [email protected]
Major changes to the 2007 Form 8865
1. All years are updated appropriately.
2. Schedule K, lines 16d through 16f and lines 16i through 16k have been revised to
rename and reorder the categories of foreign gross income sourced at the
partnership level and deductions allocated and apportioned at the partnership level
to foreign source income. This reflects changes made to section 904 (d) by the
American Jobs Creation Act of 2004. PL 108-357, sec 404.
3. Schedule M, line 2 has been revised to rename and reorder the categories of
foreign assets per PL 108-357, sec 404.

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I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
Form 8865, PAGE 1 of 8
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES. PRINTS: HEAD TO FOOT
PAPER: WHITE WRITING, SUB. 20. INK: BLACK
FLAT SIZE: 216 mm (8 1⁄ 2 ") x 559 mm (22") FOLD TO: 216 mm (8 1⁄ 2 ") x 279 mm (11")
PERFORATE: (ON FOLD)

Date

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

Form

Action

Date

O.K. to print
Revised proofs
requested

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

8865

©

OMB No. 1545-1668

2007

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Attach to your tax return. See separate instructions.
Information furnished for the foreign partnership’s tax year
beginning
, 2007, and ending
, 20

Department of the Treasury
Internal Revenue Service

Name of person filing this return

Attachment
Sequence No.

118

Filer’s identifying number

Filer’s address (if you are not filing this form with your tax return)

A Category of filer (see Categories of Filers in the instructions and check applicable box(es)):

1

2

3

B Filer’s tax year beginning

4

, 20

, and ending

C

Filer’s share of liabilities: Nonrecourse $

D

If filer is a member of a consolidated group but not the parent, enter the following information about the parent:
Name
Address

E

Signature

Qualified nonrecourse financing $

, 20

Other $

EIN

Information about certain other partners (see instructions)
(1) Name

(2) Address

(4) Check applicable box(es)

(3) Identifying number

Category 1

F1

Name and address of foreign partnership

Constructive owner

Category 2

2 EIN (if any)

3 Country under whose laws organized
4

G
1

3

Date of
organization

5 Principal place
of business

6 Principal business
activity code number

7 Principal business
activity

8a Functional currency

8b Exchange rate
(see instr.)

Provide the following information for the foreign partnership’s tax year:
2 Check if the foreign partnership must file:
Name, address, and identifying number of agent (if any) in the
United States
Form 1042
Form 8804
Form 1065 or 1065-B
Service Center where Form 1065 or 1065-B is filed:
Name and address of foreign partnership’s agent in country of
organization, if any

4 Name and address of person(s) with custody of the books and
records of the foreign partnership, and the location of such books
and records, if different

©

5 Were any special allocations made by the foreign partnership?

Yes

No

©

Yes

No

©

Yes

No

6 Enter the number of Forms 8858, Information Return of U.S. Persons With Respect To Foreign Disregarded Entities,
©
attached to this return (see instructions)
©

7 How is this partnership classified under the law of the country in which it is organized?

8 Did the partnership own any separate units within the meaning of Regulations section 1.1503-2(c)(3) or (4)?
9 Does this partnership meet both of the following requirements?
● The partnership’s total receipts for the tax year were less than $250,000 and
● The value of the partnership’s total assets at the end of the tax year was less than $600,000.
If “Yes,” do not complete Schedules L, M-1, and M-2.
Sign Here
Only If You
Are Filing
This Form
Separately
and Not With
Your Tax
Return.
Paid Preparer
Sign and
Complete
Only If Form
is Filed
Separately.

%

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my
knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than general partner or limited liability company member) is
based on all information of which preparer has any knowledge.

©

©

Signature of general partner or limited liability company member

Preparer’s
signature

©

Firm’s name (or
yours if self-employed),
address, and ZIP code

Date

©

For Privacy Act and Paperwork Reduction Act Notice, see the separate instructions.

Date

Check if
self-employed
EIN

Preparer’s SSN or PTIN
©

©

Phone no.
Cat. No. 25852A

(

)
Form

8865

(2007)

2
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
Form 8865, PAGE 2 of 8
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES. PRINTS: HEAD TO FOOT
PAPER: WHITE WRITING, SUB. 20. INK: BLACK
FLAT SIZE: 216 mm (8 1⁄ 2 ") x 559 mm (22") FOLD TO: 216 mm (8 1⁄ 2 ") x 279 mm (11")
PERFORATE: (ON FOLD)

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

Form 8865 (2007)

Schedule A

Page 2
Constructive Ownership of Partnership Interest. Check the boxes that apply to the filer. If you
check box b, enter the name, address, and U.S. taxpayer identifying number (if any) of the
person(s) whose interest you constructively own. See instructions.

a
Name

Schedule A-1

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Owns a direct interest

b

Address

Owns a constructive interest

Address

Identifying number (if any)

Does the partnership have any other foreign person as a direct partner?

Yes

Check if
foreign
person

No

Affiliation Schedule. List all partnerships (foreign or domestic) in which the foreign partnership
owns a direct interest or indirectly owns a 10% interest.
Name

Schedule B

Check if
direct
partner

Certain Partners of Foreign Partnership (see instructions)
Name

Schedule A-2

Check if
foreign
person

Identifying number (if any)

Address

EIN
(if any)

Total ordinary
income or loss

Check if
foreign
partnership

Income Statement—Trade or Business Income

Income

Caution. Include only trade or business income and expenses on lines 1a through 22 below. See the instructions for more information.

1a
b
2
3
4
5
6
7

Deductions

(see instructions for limitations)

8

1a
Gross receipts or sales
1b
Less returns and allowances
Cost of goods sold
Gross profit. Subtract line 2 from line 1c
Ordinary income (loss) from other partnerships, estates, and trusts (attach statement)
Net farm profit (loss) (attach Schedule F (Form 1040))
Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797)
Other income (loss) (attach statement)
Total income (loss). Combine lines 3 through 7

1c
2
3
4
5
6
7
8
9
10
11
12
13
14
15

9
10
11
12
13
14
15
16a
b
17
18
19
20

Salaries and wages (other than to partners) (less employment credits)
Guaranteed payments to partners
Repairs and maintenance
Bad debts
Rent
Taxes and licenses
Interest
16a
Depreciation (if required, attach Form 4562)
16b
Less depreciation reported elsewhere on return
Depletion (Do not deduct oil and gas depletion.)
Retirement plans, etc.
Employee benefit programs
Other deductions (attach statement)

16c
17
18
19
20

21

Total deductions. Add the amounts shown in the far right column for lines 9 through 20

21

22

Ordinary business income (loss) from trade or business activities. Subtract line 21 from line 8

22
Form

8865

(2007)

2
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 8865 PAGE 3 of 8
PRINTS: HEAD TO FOOT
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20 INK: BLACK
FLAT SIZE: 216 mm (81⁄ 2 ") x 559 mm (22") FOLD TO 216 mm (81⁄ 2 ") x 279 mm (11")
PERFORATE: ON TOP FOLD

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

Page

Form 8865 (2007)

Schedule D
Part I

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Short-Term Capital Gains and Losses—Assets Held One Year or Less
(a) Description of property
(e.g., 100 shares
of “Z” Co.)

1

(b) Date acquired
(month, day, year)

(c) Date sold
(month, day, year)

(d) Sales price
(see instructions)

(e) Cost or other basis
(f) Gain or (loss)
(see instructions)
Subtract (e) from (d)

2

Short-term capital gain from installment sales from Form 6252, line 26 or 37

2

3

Short-term capital gain (loss) from like-kind exchanges from Form 8824

3

4

Partnership’s share of net short-term capital gain (loss), including specially allocated short-term capital
gains (losses), from other partnerships, estates, and trusts

4

Net short-term capital gain or (loss). Combine lines 1 through 4 in column (f). Enter here and on
Form 8865, Schedule K, line 8 or 11

5

5

Part II

3

Capital Gains and Losses

Long-Term Capital Gains and Losses—Assets Held More Than One Year
(a) Description of property
(e.g., 100 shares
of “Z” Co.)

(b) Date acquired
(month, day, year)

(c) Date sold
(month, day, year)

(d) Sales price
(see instructions)

(e) Cost or other basis
(f) Gain or (loss)
(see instructions)
Subtract (e) from (d)

6

7

Long-term capital gain from installment sales from Form 6252, line 26 or 37

7

8

Long-term capital gain (loss) from like-kind exchanges from Form 8824

8

9

Partnership’s share of net long-term capital gain (loss), including specially allocated long-term capital
gains (losses), from other partnerships, estates, and trusts

9

10

Capital gain distributions

10

11

Net long-term capital gain or (loss). Combine lines 6 through 10 in column (f). Enter here and on
Form 8865, Schedule K, line 9a or 11

11
Form

8865

(2007)

2
I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
FORM 8865, PAGE 4 of 8
MARGINS; TOP 13mm (1/2"), CENTER SIDES. PRINTS: HEAD TO HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 216mm (8-1/2") x 279mm (11")
PERFORATE: None
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 8865 (2007)

Page

Partners’ Distributive Share Items

12
13a
b
c
d

1
2

3a
3b

3c
4
5
6a

6b

7
8
9a

9b
9c

Section 179 deduction (attach Form 4562)
Contributions
Investment interest expense
Section 59(e)(2) expenditures:
(1) Type ©
Other deductions (see instructions) Type ©

(2) Amount ©

14a Net earnings (loss) from self-employment
b Gross farming or fishing income
c Gross nonfarm income
15a
b
c
d
e
f

4

Total amount

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Ordinary business income (loss) (page 2, line 22)
Net rental real estate income (loss) (attach Form 8825)
Other gross rental income (loss)
Expenses from other rental activities (attach statement)
Other net rental income (loss). Subtract line 3b from line 3a
Guaranteed payments
Interest income
Dividends: a Ordinary dividends
b Qualified dividends
7 Royalties
8 Net short-term capital gain (loss)
9a Net long-term capital gain (loss)
b Collectibles (28%) gain (loss)
c Unrecaptured section 1250 gain (attach statement)
10 Net section 1231 gain (loss) (attach Form 4797)
11 Other income (loss) (see instructions) Type ©
1
2
3a
b
c
4
5
6

Low-income housing credit (section 42(j)(5))
Low-income housing credit (other)
Qualified rehabilitation expenditures (rental real estate) (attach Form 3468)
Other rental real estate credits (see instructions)
Type ©
Other rental credits (see instructions)
Type ©
Other credits (see instructions)
Type ©

Alternative
Minimum Tax
(AMT) Items

16a Name of country or U.S. possession ©
b Gross income from all sources
c Gross income sourced at partner level
Foreign gross income sourced at partnership level
d Passive category ©
e General category ©
f Other (attach statement)
Deductions allocated and apportioned at partner level
h Other
g Interest expense ©
Deductions allocated and apportioned at partnership level to foreign source income
i Passive category ©
j General category ©
k Other (attach statement)
l Total foreign taxes (check one): ©
Paid
Accrued
m Reduction in taxes available for credit (attach statement)
n Other foreign tax information (attach statement)
17a
b
c
d
e
f

Post-1986 depreciation adjustment
Adjusted gain or loss
Depletion (other than oil and gas)
Oil, gas, and geothermal properties—gross income
Oil, gas, and geothermal properties—deductions
Other AMT items (attach statement)

Other Information

Foreign Transactions

Credits

SelfEmploy- Deductions
ment

Income (Loss)

Schedule K

18a
b
c
19a
b
20a
b
c

Tax-exempt interest income
Other tax-exempt income
Nondeductible expenses
Distributions of cash and marketable securities
Distributions of other property
Investment income
Investment expenses
Other items and amounts (attach statement)

10
11
12
13a
13b
13c(2)
13d
14a
14b
14c
15a
15b
15c
15d
15e
15f
16b
16c

©

16f

©

16h

©

16k
16l
16m
17a
17b
17c
17d
17e
17f
18a
18b
18c
19a
19b
20a
20b
Form

8865

(2007)

2
I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
FORM 8865, PAGE 5 OF 8
MARGINS; TOP 13mm (1/2"), CENTER SIDES. PRINTS: HEAD TO HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 216mm (8-1/2") x 279mm (11")
PERFORATE: None
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Page

Form 8865 (2007)

Schedule L

Assets
1
2a
b
3
4
5
6
7
8
9a
b
10a
b
11
12a
b
13
14
15
16
17
18
19
20
21
22

5

Balance Sheets per Books. (Not required if Item G9, page 1, is answered "Yes.")

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(a)

Beginning of tax year
(b)

End of tax year

(c)

(d)

Cash
Trade notes and accounts receivable
Less allowance for bad debts
Inventories
U.S. government obligations
Tax-exempt securities
Other current assets (attach statement)
Mortgage and real estate loans
Other investments (attach statement)
Buildings and other depreciable assets
Less accumulated depreciation
Depletable assets
Less accumulated depletion
Land (net of any amortization)
Intangible assets (amortizable only)
Less accumulated amortization
Other assets (attach statement)
Total assets
Liabilities and Capital
Accounts payable
Mortgages, notes, bonds payable in less than 1 year
Other current liabilities (attach statement)
All nonrecourse loans
Mortgages, notes, bonds payable in 1 year or more
Other liabilities (attach statement)
Partners’ capital accounts
Total liabilities and capital

Form

8865

(2007)

2
I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
FORM 8865, PAGE 6 of 8
MARGINS: TOP 13mm (1⁄ 2 "), CENTER SIDES. PRINTS: HEAD to HEAD
PAPER: WHITE WRITING, SUB. 20. INK: BLACK
FLAT SIZE: 216mm (81⁄ 2 ") x 279mm (11")
PERFORATE: (NONE)
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 8865 (2007)

Schedule M

Page

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(a)
Beginning of
tax year

1
2

Total U.S. assets
Total foreign assets:
a Passive category
b General category
c Other (attach statement)

Schedule M-1

Net income (loss) per books

2

Income included on Schedule K,
lines 1, 2, 3c, 5, 6a, 7, 8, 9a, 10,
and 11 not recorded on books
this year (itemize):
Guaranteed payments (other
than health insurance)

4

Expenses recorded on books
this year not included on
Schedule K, lines 1 through 13d,
and 16l (itemize):
a Depreciation $
b Travel and entertainment $

5
1
2

3
4

6

Income recorded on books this
year not included on Schedule K,
lines 1 through 11 (itemize):
a Tax-exempt interest $

7

Deductions included on Schedule
K, lines 1 through 13d, and 16l not
charged against book income this
year (itemize):
a Depreciation $

8
9

Add lines 6 and 7
Income (loss). Subtract line 8
from line 5

Add lines 1 through 4

Schedule M-2

Analysis of Partners’ Capital Accounts. (Not required if Item G9, page 1, is answered “Yes.”)

Balance at beginning of year
Capital contributed:
a Cash
b Property
Net income (loss) per books
Other increases (itemize):

6
7

8
9
5

(b)
End of
tax year

Reconciliation of Income (Loss) per Books With Income (Loss) per Return. (Not required if Item G9, page
1, is answered “Yes.”)

1

3

6

Balance Sheets for Interest Allocation

Add lines 1 through 4

Distributions: a Cash
b Property
Other decreases (itemize):

Add lines 6 and 7
Balance at end of year. Subtract
line 8 from line 5
Form

8865

(2007)

2
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 8865 PAGE 7 of 8 (page 8 is blank)
PRINTS: HEAD TO FOOT
MARGINS: TOP 13 mm (1⁄ 2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20 INK: BLACK
1
FLAT SIZE: 216 mm (8 ⁄ 2 ") x 559 mm (22") FOLD TO 216 mm (81⁄ 2 ") x 279 mm (11")
PERFORATE: ON TOP FOLD

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

Form 8865 (2007)

Schedule N

Page 7
Transactions Between Controlled Foreign Partnership and Partners or Other Related Entities

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Important: Complete a separate Form 8865 and Schedule N for each controlled foreign partnership. Enter the totals for each type of
transaction that occurred between the foreign partnership and the persons listed in columns (a) through (d).
Transactions
of
foreign partnership

1 Sales of inventory
2 Sales of property rights
(patents, trademarks, etc.)
3 Compensation received for
technical, managerial,
engineering, construction,
or like services
4 Commissions received
5 Rents, royalties, and
license fees received
6 Distributions received
7 Interest received
8 Other

(a) U.S. person
filing this return

(b) Any domestic
corporation or partnership
controlling or controlled
by the U.S. person filing
this return

(c) Any other foreign
corporation or partnership
controlling or controlled
by the U.S. person filing
this return

(d) Any U.S. person with a
10% or more direct interest
in the controlled foreign
partnership (other than the
U.S. person filing this return)

9 Add lines 1 through 8
10 Purchases of inventory
11 Purchases of tangible
property other than
inventory
12 Purchases of property
rights (patents,
trademarks, etc.)
13 Compensation paid for
technical, managerial,
engineering, construction,
or like services
14 Commissions paid
15 Rents, royalties, and
license fees paid
16 Distributions paid
17 Interest paid
18 Other
19 Add lines 10 through 18
20 Amounts borrowed (enter
the maximum loan
balance during the year)
—see instructions
21 Amounts loaned (enter the
maximum loan balance
during the year)—see
instructions
Form

Printed on recycled paper

8865

(2007)