Form 8804 - Annual Return for Partnership Withholding Tax (Section 1446)

2010

Instructions for Forms 8804,
8805, and 8813
Section references are to the Internal
Revenue Code unless otherwise noted.

partnership that receives a Form 8805
from a lower-tier partnership should see
Tiered Partnerships on page 4.

What’s New

Form 8805 may also be completed, in
some cases, by a foreign trust or estate.
A foreign partner that is a foreign trust or
estate must complete Schedule T of Form
8805 to report to the trust or estate’s
beneficiaries the section 1446 withholding
tax that may be claimed as a withholding
tax credit on the beneficiaries’ income tax
returns. See Schedule T – Beneficiary
Information on page 6 for details.

The penalties under sections 6721 and
6722 have increased for a Form 8805
required to be filed on or after January 1,
2011. See Late Filing of Correct Form
8805 on page 3, and Failure to Furnish
Correct Form 8805 to Recipient on page
4, for more information.

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General Instructions
Purpose of Forms

Use Forms 8804, 8805, and 8813 to pay
and report section 1446 withholding tax
based on effectively connected taxable
income (ECTI) allocable to foreign
partners (as defined in section 1446(e)).
Use Form 8804, Annual Return for
Partnership Withholding Tax (Section
1446), to report the total liability under
section 1446 for the partnership’s tax
year. Form 8804 is also a transmittal form
for Form(s) 8805.
Use Form 8805, Foreign Partner’s
Information Statement of Section 1446
Withholding Tax, to show the amount of
ECTI and the total tax credit allocable to
the foreign partner for the partnership’s
tax year.
File a separate Form 8805 for each
foreign partner. See Reporting to Partners
on page 3 to determine when Form 8805
is required even if no section 1446
withholding tax was paid. Attach Copy A
of each Form 8805 to the Form 8804 filed
with the IRS.
Foreign partners must attach Form
8805 to their U.S. income tax returns to
claim a withholding credit for their shares
of the section 1446 tax withheld by the
partnership. Any U.S. person erroneously
subjected to the withholding tax would
also receive Form 8805 from a
partnership, and the Form 8805 should be
attached to the U.S. person’s income tax
return to claim a withholding credit. A

Use Form 8813, Partnership
Withholding Tax Payment Voucher
(Section 1446), to pay the withholding tax
under section 1446 to the United States
Treasury. Form 8813 must accompany
each payment of section 1446 tax made
during the partnership’s tax year.

Who Must File

All partnerships with effectively connected
gross income allocable to a foreign
partner in any tax year must file Forms
8804 and 8805 whether or not
distributions were made during the
partnership’s tax year. The partnership
may designate a person to file the forms.
The partnership, or person it designates,
must file these forms even if the
partnership has no withholding tax liability
under section 1446.

When To File
Forms 8804 and 8805
Generally, file these forms on or before
the 15th day of the 4th month following
the close of the partnership’s tax year.
For partnerships that keep their records
and books of account outside the United
States and Puerto Rico, the due date is
the 15th day of the 6th month following
the close of the partnership’s tax year. If
the partnership is permitted to file these
forms on or before the 15th day of the 6th
month, check the box at the top of Form
8804.
If a due date falls on a Saturday,
Sunday, or legal holiday, file by the next
business day.
File Forms 8804 and 8805 separately
from Form 1065, U.S. Return of
Partnership Income, or Form 1065-B,
U.S. Return of Income for Electing Large
Partnerships.
If you need more time, you can file
Form 7004, Application for Automatic
Extension of Time To File Certain
Business Income Tax, Information, and
Other Returns, to request an extension of
time to file Form 8804. Form 7004 does
not extend the time for payment of tax.
Cat. No. 10393W

Department of the Treasury
Internal Revenue Service

Form 8813
File on or before the 15th day of the 4th,
6th, 9th, and 12th months of the
partnership’s tax year for U.S. income tax
purposes.

Where To File

File Forms 8804, 8805, and 8813 with:
Internal Revenue Service Center
P.O. Box 409101
Ogden, UT 84409

Amended Form 8804

A partnership may file an amended Form
8804 to correct a previously filed Form
8804. To do so, complete a new Form
8804 with the corrected information. Write
“Amended” in the top margin of the form
and write “Corrected” on any Forms 8805
attached to the Form 8804. File the
amended form with the address shown
under Where To File above.

Taxpayer Identifying
Number

To insure proper crediting of the
withholding tax when reporting to the IRS,
a partnership must provide a U.S.
taxpayer identifying number (TIN) for
each foreign partner. The partnership
should notify any of its foreign partners
without such a number of the necessity of
obtaining a U.S. identifying number. An
individual’s identifying number is the
individual’s social security number (SSN)
or individual taxpayer identification
number (ITIN). Any other partner’s
identifying number is its U.S. employer
identification number (EIN).
Certain aliens who do not have and
are not eligible to get an SSN may apply
for an ITIN on Form W-7, Application for
IRS Individual Taxpayer Identification
Number. The application is also available
in Spanish.

Requirement To Make
Withholding Tax Payments

A foreign or domestic partnership that has
ECTI allocable to a foreign partner must
pay a withholding tax equal to the
applicable percentage of the ECTI that is
allocable to its foreign partners. However,
this requirement does not apply to a
partnership treated as a corporation
under the general rule of section 7704(a).
ECTI is defined on page 2. Applicable
percentage is defined on page 3.

Withholding Agents

For ease of reference, these instructions
refer to various requirements applicable

to withholding agents as requirements
applicable to partnerships themselves.

Determining If a Partner Is
a Foreign Person

A partnership must determine if any
partner is a foreign partner subject to
section 1446. A foreign partner (as
defined in section 1446(e)) is any partner
who is not a U.S. person, which is defined
in section 7701(a)(30). As such, a foreign
person includes a nonresident alien
individual, foreign corporation, foreign
partnership, foreign trust or estate, or a
foreign organization described in section
501(c).
A partnership may determine a
partner’s foreign or nonforeign status by
relying on a W-8 form (for example, Form
W-8BEN), Form W-9, an acceptable
substitute form, or by other means. See
Form of certification and Use of Means
Other Than Certification below. Also, see
Regulations section 1.1446-1(c) for
additional information.

Certification of Nonforeign
Status
In general, a partnership may determine
that a partner is not a foreign person by
obtaining a Form W-9 from the partner. A
partnership that has obtained this
certification may rely on it to establish the
nonforeign status of a partner. See Effect
of certification below.
Form of certification. Generally, a
partnership may determine a partner’s
foreign or nonforeign status by obtaining
one of the following withholding
certificates from the partner.
• Form W-8BEN, Certificate of Foreign
Status of Beneficial Owner for United
States Tax Withholding.
• W-8ECI, Certificate of Foreign Person’s
Claim That Income is Effectively
Connected With the Conduct of a Trade
or Business in the United States.
• W-8EXP, Certificate of Foreign
Government or Other Foreign
Organization for United States Tax
Withholding.
• W-8IMY, Certificate of Foreign
Intermediary, Foreign Flow-Through
Entity, or Certain U.S. Branches for
United States Tax Withholding.
• Form W-9, Request for Taxpayer
Identification Number and Certification.
• An acceptable substitute form (as
described in Regulations section
1.1446-1(c)(5)).
• A statement required from a domestic
grantor trust (as described in Regulations
section 1.1446-1(c)(2)(ii)(E)) with the
necessary documentation required for the
trust and the grantor.
Effect of certification. Generally, a
partnership that has obtained a
withholding certificate (for example, a
Form W-8 or W-9) according to the rules
in these instructions may rely on the
certification to determine whether the
partner is a foreign or nonforeign partner
for purposes of computing section 1446
tax, and if such partner is a foreign
partner, to determine whether or not such
partner is a corporation for U.S. tax
purposes. The partnership may also use

the withholding certificate to determine
that the partner is not subject to
withholding. A partnership may not rely on
a withholding certificate if it knows or has
reason to know that any information
provided on the withholding certificate is
incorrect or unreliable, and based on that
information the partnership should pay
more section 1446 withholding tax. Under
those circumstances, the certificate is not
valid.
The partnership will not be subject to
penalties for its failure to pay the section
1446 withholding tax prior to the date that
it knows or has reason to know that the
certificate is not valid. However, the
partnership is fully liable for section 1446
withholding tax for the year, as well as
penalties and interest, starting with the
installment period or Form 8804 filing
period during which it knows or has
reason to know that the certificate is not
valid. See Regulations section
1.1446-1(c)(2)(iii).
Requirements for certificates to be
valid. Generally, the validity of a Form
W-9 is determined under section 3406
and Regulations section 31.3406(h)-3(e).
A Form W-8 is only valid if:
• Its validity period has not expired,
• The partner submitting the form has
signed it under penalties of perjury, and
• It contains all the required information.
See Regulations section
1.1446-1(c)(2)(iv) for more details.
Change in circumstances. A partner
must provide a new withholding certificate
when there is a change in circumstances.
The principles of Regulations section
1.1441-1(e)(4)(ii)(D) shall apply when a
change in circumstances has occurred
(including situations where the status of a
U.S. person changes) that requires a
partner to provide a new withholding
certificate.
How long to keep the certifications. A
partnership or nominee who has
responsibility for paying section 1446
withholding tax must retain each
withholding certificate, statement, and
other information received from its direct
and indirect partners for as long as it may
be relevant to the determination of the
withholding agent’s section 1446 tax
liability under section 1461 and the
regulations thereunder.

Use of Means Other Than
Certification
A partnership is not required to obtain a
Form W-9. It may rely on other means to
learn the non-foreign status of the
partner. But if the partnership relies on
other means and erroneously determines
that the partner was not a foreign person,
the partnership will be held liable for
payment of the tax, any applicable
penalties, and interest. A partnership is
not required to rely on other means to
determine the non-foreign status of a
partner and may demand a Form W-9. If
a certification is not provided, the
partnership may presume the partner is
foreign and will be considered for
purposes of sections 1461 through 1463
to have been required to withhold section
1446 tax.

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Effectively Connected
Taxable Income (ECTI)
Definition
“ECTI” is the excess of the gross income
of the partnership that is effectively
connected under section 864(c), or
treated as effectively connected with the
conduct of a U.S. trade or business, over
the allowable deductions that are
connected to such income. See Pub. 519,
U.S. Tax Guide for Aliens, for detailed
instructions regarding the computation of
ECTI. For purposes of these instructions,
figure this income with the following
statutory adjustments:
1. Section 703(a)(1) does not apply.
2. The partnership is allowed a
deduction for depletion of oil and gas
wells, but the amount of the deduction
must be determined without regard to
sections 613 and 613A.
3. The partnership may not take into
account items of income, gain, loss, or
deduction allocable to any partner that is
not a foreign partner.
See Regulations section 1.1446-2 for
additional adjustments that may be
required.
A partnership’s ECTI includes
partnership income subject to a partner’s
election under section 871(d) or 882(d)
(election to treat real property income as
income connected with a U.S. business).
It also includes any partnership income
treated as effectively connected with the
conduct of a U.S. trade or business under
section 897 (disposition of investment in
U.S. real property), and other items of
partnership income treated as effectively
connected under other provisions of the
Internal Revenue Code, regardless of
whether those amounts are taxable to the
partner.
See Regulations section 1.1446-2 for
additional information for computing
ECTI.

Amount Allocable to Foreign
Partners
The amount of a partnership’s ECTI for
the partnership’s tax year allocable to a
foreign partner under section 704 equals
(a) the foreign partner’s distributive share
of effectively connected gross income of
the partnership for the partnership’s tax
year that is properly allocable to the
partner under section 704, minus (b) the
foreign partner’s distributive share of
deductions of the partnership for that year
that are connected with that income under
section 873 or section 882(c)(1) and that
are properly allocable to the partner under
section 704. This income must be
computed by taking into account any
adjustments to the basis of the
partnership property described in section
743 according to the partnership’s
election under section 754. Also, a
partnership’s ECTI is not allocable to a
foreign partner to the extent the amounts
are exempt from U.S. tax for that partner
by a treaty or reciprocal agreement, or a
provision of the Code.

Instructions for Forms 8804, 8805, and 8813 (2010)

Certification of Deductions
and Losses

A foreign partner, in certain
circumstances, may certify to the
partnership that it has deductions and
losses it reasonably expects to be
available to reduce the partner’s U.S.
income tax liability on the partner’s
allocable share of effectively connected
income or gain from the partnership. In
certain circumstances, the partnership
may consider and rely on these
deductions and losses to reduce the
partnership’s section 1446 tax.
Note. Foreign partners must submit all
certificates (including updated certificates)
using Form 8804-C, Certificate of
Partner-Level Items to Reduce Section
1446 Withholding.
See Form 8804-C and instructions,
and Regulations section 1.1446-6 for
additional information.

Reductions for State and
Local Taxes

In addition to any deductions and losses
certified by a foreign partner to the
partnership (see Certification of
Deductions and Losses above), the
partnership may consider as a deduction
of such partner 90% of any state and
local income taxes withheld and remitted
by the partnership on behalf of such
partner with respect to the partner’s
allocable share of partnership ECTI. The
partnership may consider the amount of
state and local taxes of the foreign
partner regardless of whether the foreign
partner submits a certificate to the
partnership.
Note. Do not deduct state and local
taxes paid on behalf of the partnership.
The partnership may only consider as a
deduction of a partner the partner’s own
state and local income taxes the
partnership withholds and remits on the
partner’s behalf with respect to the
partner’s allocable share of partnership
ECTI.

Amount of Withholding
Tax
Figuring the Tax Payments
Under section 1446, a partnership must
make four installment payments of
withholding tax during the tax year.
Amount of each installment payment
of withholding tax. In general, the
amount of a partnership’s installment
payment is equal to the sum of the
installment payments for each of the
partnership’s foreign partners. A
partnership will generally determine the
amount of the installment payment for
each of its foreign partners by applying
the principles of section 6655 and
Regulations section 1.1446-3. To do so,
use Form 8804-W, Installment Payments
of Section 1446 Tax for Partnerships.
Applicable percentage. For all foreign
partners, the section 1446 applicable
percentage is generally 35%. However, in
some circumstances, the partnership may
consider the highest rate applicable to a

particular type of income allocated to a
non-corporate partner if such partner
would be entitled to use a preferential rate
on such income or gain. See Regulations
section 1.1446-3(a)(2) for additional
information.
When to make the payment. Make
installment payments of the withholding
tax under section 1446 with Form 8813 by
the applicable due dates during the tax
year of the partnership in which the
income is earned. The partnership must
generally make the installment payments
for each foreign partner on or before the
15th day of the 4th, 6th, 9th, and 12th
months of the partnership’s tax year.
Generally, pay any additional amounts
due when filing Form 8804. However, if
the partnership files Form 7004 to request
an extension of time to file Form 8804,
pay the balance of section 1446
withholding tax estimated to be due with
Form 7004 in order to avoid the late
payment penalty.

Coordination With Other
Withholding Rules
Interest, Dividends, etc.
Fixed or determinable, annual or
periodical income subject to tax under
section 871(a) or 881 is not included in
the partnership’s ECTI under section
1446. However, these amounts are
independently subject to withholding
under the requirements of sections 1441
and 1442 and their regulations.

Real Property Gains
Domestic partnerships. Domestic
partnerships subject to the withholding
requirements of section 1446 are not also
subject to the payment and reporting
requirements of section 1445(e)(1) and its
regulations for income from the
disposition of a U.S. real property interest.
A domestic partnership’s compliance with
the requirement to pay a withholding tax
under section 1446 satisfies the
requirements under section 1445 for
dispositions of U.S. real property
interests. However, a domestic
partnership that would otherwise be
exempt from section 1445 withholding by
operation of a nonrecognition provision
must continue to comply with the
requirements of Regulations section
1.1445-5(b)(2).
Foreign partnerships. A foreign
partnership subject to withholding under
section 1445(a) during a tax year will be
allowed to credit the amount withheld
under section 1445(a), to the extent such
amount is allocable to foreign partners,
against its liability to pay the section 1446
withholding tax for that year. This credit is
allowed on line 6c of the Form 8804 filed
by the foreign partnership.

Reporting to Partners

When making a payment of withholding
tax to the IRS under section 1446, a
partnership must notify all foreign
partners of their allocable shares of any
section 1446 tax paid to the IRS by the
partnership. The partners use this
information to adjust the amount of
estimated tax that they must otherwise

Instructions for Forms 8804, 8805, and 8813 (2010)

-3-

pay to the IRS. The notification to the
foreign partners must be provided within
10 days of the installment due date, or, if
paid later, the date the installment
payment is made. See Regulations
section 1.1446-3(d)(1)(i) for information
that must be included in the notification
and for exceptions to the notification
requirement.
If a partnership has gross ECI, it must
file a separate Form 8805 for each
partner for whom it paid section 1446 tax.
In addition, if the partnership reduces
ECTI for state and local income tax
deductions permitted under Regulations
section 1.1446-6(c)(1)(iii) or relies on a
Form 8804-C it receives from a partner to
reduce its section 1446 tax, it must
complete a Form 8805 for the partner
even if no tax is paid on behalf of the
partner. The foreign partner must also
receive a copy of its Form 8805 by the
due date of the partnership return
(including extensions).
A foreign partner that is a foreign trust
or estate must provide to each of its
beneficiaries a Form 8805 completed as
described under Schedule T – Beneficiary
Information on page 6.

Interest and Penalties
Interest
Interest is charged on taxes not paid by
the due date, even if an extension of time
to file is granted. Interest is also charged
on penalties imposed for failure to file,
negligence, fraud, and substantial
understatements of tax from the due date
(including extensions) to the date of
payment. The interest charge is figured at
a rate determined under section 6621.

Late Filing of Form 8804
A partnership that fails to file Form 8804
when due (including extensions of time to
file) generally may be subject to a penalty
of 5% of the unpaid tax for each month or
part of a month the return is late, up to a
maximum of 25% of the unpaid tax. The
penalty will not apply if the partnership
can show reasonable cause for filing late.
If the failure to timely file is due to
reasonable cause, attach an explanation
to Form 8804.

Late Filing of Correct Form
8805
A penalty may be imposed for failure to
file each Form 8805 when due (including
extensions). The penalty may also be
imposed for failure to include all required
information on Form 8805 or for
furnishing incorrect information. The
penalty is based on when a correct Form
8805 is filed. For a Form 8805 required to
be filed on or after January 1, 2011, the
penalty is:
• $30 per Form 8805 if the partnership
correctly files within 30 days; maximum
penalty of $250,000 per year ($75,000 for
a small business). A “small business” has
average annual gross receipts of $5
million or less for the most recent 3 tax
years (or for the period of time the
business has existed, if shorter) ending
before the calendar year in which the
Forms 8805 were due.

• $100 per Form 8805 if the partnership

files more than 30 days after the due date
or does not file a correct Form 8805;
maximum penalty of $1,500,000 per year
($500,000 for a small business).
If the partnership intentionally
disregards the requirement to report
correct information, the penalty per Form
8805 is increased to $250 or, if greater,
10% of the aggregate amount of items
required to be reported, with no maximum
penalty. For more information, see
sections 6721 and 6724.
Reasonable cause requests. Section
6724(a) provides reasonable cause relief
for failure to comply with sections 6721
through 6724. File reasonable cause
requests with the address shown under
Where To File on page 1.
Adjustment for inflation. The penalty
for failure to file Form 8805 under section
6721 will be adjusted for inflation every 5
years beginning in 2013. See section
6721(f) for more information.

Failure To Furnish Correct
Form 8805 to Recipient
A penalty may be imposed for each
failure to furnish Form 8805 to the
recipient when due. The penalty may also
be imposed for each failure to give the
recipient all required information on each
Form 8805 or for furnishing incorrect
information. For a Form 8805 required to
be furnished on or after January 1, 2011,
the penalty is:
• $30 per Form 8805 if the partnership
correctly furnishes within 30 days;
maximum penalty of $250,000 per year
($75,000 for a small business). A “small
business” has average annual gross
receipts of $5 million or less for the most
recent 3 tax years (or for the period of
time the business has existed, if shorter)
ending before the calendar year in which
the Forms 8805 were due.
• $100 per Form 8805 if the partnership
furnishes more than 30 days after the due
date or does not furnish a correct Form
8805; maximum penalty of $1,500,000
per year ($500,000 for a small business).
If the partnership intentionally
disregards the requirement to report
correct information, the penalty is
increased to $250 or, if greater, 10% of
the aggregate amount of items required to
be reported, with no maximum penalty.
For more information, see sections 6722
and 6724.
Reasonable cause requests. Section
6724(a) provides reasonable cause relief
for failure to comply with sections 6721
through 6724. File reasonable cause
requests with the address shown under
Where To File on page 1.
Adjustment for inflation. The penalty
for failure to furnish Form 8805 under
section 6722 will be adjusted for inflation
every 5 years beginning in 2013. See
section 6722(f) for more information.

Late Payment of Tax
The penalty for not paying tax when due
is usually 1/2 of 1% of the unpaid tax for
each month or part of a month the tax is
unpaid. The penalty cannot exceed 25%
of the unpaid tax. The penalty will not
apply if the partnership can show

reasonable cause for paying late. If the
failure to timely pay is due to reasonable
cause, attach an explanation to the form.

Failure To Withhold and Pay
Over Tax
Any person required to withhold, account
for, and pay over the withholding tax
under section 1446, but who fails to do
so, may be subject to a civil penalty under
section 6672. The civil penalty is equal to
the amount that should have been
withheld and paid over.

Other Penalties
Penalties may also be imposed, absent
reasonable cause and good faith, for
failing to accurately report the amount of
tax required to be shown on a return, if
any portion of the resulting underpayment
is attributable to negligence, substantial
understatement of income tax, valuation
misstatement, or fraud. See sections
6662 and 6663.

Treatment of Partners

A partnership’s payment of section 1446
withholding tax on ECTI allocable to a
foreign partner generally relates to the
partner’s U.S. income tax liability for the
partner’s tax year in which the partner is
subject to U.S. tax on that income.
Amounts paid by the partnership under
section 1446 on ECTI allocable to a
partner are allowed to the partner as a
credit under section 33. The partner may
not claim an early refund of withholding
tax paid under section 1446.
Amounts paid by a partnership under
section 1446 for a partner are to be
treated as distributions made to that
partner on the earliest of the following:
1. The day on which this tax was paid
by the partnership.
2. The last day of the partnership’s tax
year for which the amount was paid.
3. The last day on which the partner
owned an interest in the partnership
during that year.
However, the amount of section 1446
withholding paid during a tax year by the
partnership is generally treated as an
advance or draw under Regulations
section 1.731-1(a)(1)(ii) to the extent of
the partner’s share of income for the
partnership year. See Regulations section
1.1446-3(d)(2)(v) for more details.
A partner that wishes to claim a credit
against its U.S. income tax liability for
amounts withheld and paid under section
1446 must attach Copy C of Form 8805 to
its U.S. income tax return for the tax year
in which it claims the credit.
See Regulations section
1.1446-3(d)(2) for additional information.

Publicly Traded
Partnerships (PTP)

A “publicly traded partnership” is any
partnership whose interests are regularly
traded on an established securities
market (regardless of the number of its
partners). However, it does not include a
PTP treated as a corporation under the
general rule of section 7704(a).

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A PTP that has effectively connected
income, gain, or loss must withhold tax on
distributions of that income made to its
foreign partners. The rate is 35%. The
PTP may not consider preferential rates
when computing the section 1446 tax for
a partner. The partnership uses Form
1042, Annual Withholding Tax Return for
U.S. Source Income of Foreign Persons;
Form 1042-S, Foreign Person’s U.S.
Source Income Subject to Withholding;
and Form 1042-T, Annual Summary and
Transmittal of Forms 1042-S, to report
withholding from distributions instead of
following these instructions. It also must
comply with the regulations under section
1461 and Regulations section 1.6302-2.

Tiered Partnerships

The term “tiered partnership” describes
the situation in which a partnership owns
an interest in another partnership. The
former is an “upper-tier partnership” and
the latter is a “lower-tier partnership.” An
upper-tier partnership that owns a
partnership interest in a lower-tier
partnership is allowed a credit against its
own section 1446 liability for any section
1446 tax paid by the lower-tier
partnership for that partnership interest.
If an upper-tier partnership provides
appropriate documentation to a lower-tier
partnership, the lower-tier partnership
may look through the partnership to the
partners of such upper-tier partnership in
determining its section 1446 tax due. The
look through may apply only with respect
to the portion of the upper-tier
partnership’s allocation that is allocable to
partners of such partnership for which
appropriate documentation has been
received by the lower-tier partnership. For
more information, see Regulations
section 1.1446-5(c) for upper-tier foreign
partnerships and Regulations section
1.1446-5(e) for upper-tier domestic
partnerships.
Note. The look-through rules referred to
above apply only for purposes of the
lower-tier partnership’s computation of its
section 1446 tax liability. It does not affect
the upper-tier partnership’s reporting
requirements with respect to Forms 8804
and 8805 as set forth in the next
paragraph and elsewhere in these
instructions.
An upper-tier partnership that has had
section 1446 tax payments made on its
behalf by a lower-tier partnership will
receive a copy of Form 1042-S or Form
8805 from the lower-tier partnership. The
upper-tier partnership must in turn file
these forms with its Form 8804 and treat
the amount withheld by the lower-tier
partnership as a credit against its own
liability to withhold under section 1446.
This credit is allowed on line 6b of the
Form 8804 filed by the upper-tier
partnership. The upper-tier partnership
must also provide to its partners the
information described in Reporting to
Partners on page 3. These statements
and forms will enable those partners to
obtain appropriate credit for tax withheld
under section 1446.
See Regulations section 1.1446-5 for
additional information.

Instructions for Forms 8804, 8805, and 8813 (2010)

Specific Instructions
Address

When providing a U.S. address on Form
8804, 8805, or 8813, include the suite,
room, or other unit number after the street
address. If the post office does not deliver
mail to the street address and the
partnership (or withholding agent) has a
P.O. box, show the box number instead of
the street address. If the partnership (or
withholding agent) receives its mail in
care of a third party (such as an
accountant or an attorney), enter on the
street address line “c/o” followed by the
third party’s name and street address or
P.O. box.
When providing a foreign address on
Form 8804, 8805, or 8813, enter the
number and street, city, province or state,
and the name of the country. Follow the
foreign country’s practice in placing the
postal code in the address. Do not
abbreviate the country name.

Form 8804
Lines 1c, 1d, 2c, and 2d
See Address above.

Lines 4a, 4e, 4i, and 4m
Figure the partnership’s ECTI using the
definition on page 2. Enter the total ECTI
allocable to foreign partners (by income
type) on lines 4a, 4e, 4i, and 4m. With
respect to lines 4e, 4i, and 4m, enter the
specified types of income allocable to
non-corporate partners if appropriate
documentation is received and such
partners would be entitled to use a
preferential rate on such income or gain.
See Regulations section 1.1446-3(a)(2)
for additional information.
If the partnership has net ordinary loss,
net short-term capital loss, or net 28%
rate 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 4e, 4i, and 4m,
respectively. See section 1(h) and Notice
97-59, 1997-45 I.R.B. 7, for rules for
netting gains and losses.
Note. Partnership ECTI on which a
foreign partner is exempt from U.S. tax by
a treaty or other reciprocal agreement is
not allocable to that partner and is exempt
from withholding under section 1446.
However, this exemption from section
1446 withholding must be reported on
Form 8805. See instructions for line 8b of
Form 8805, later.

Lines 4b, 4f, 4j, and 4n
Enter the reduction amounts for state and
local taxes under Regulations section
1.1446-6(c)(1)(iii). See Reductions for
State and Local Taxes on page 3 for
additional information. The netting rules
under section 1(h) and Notice 97-59 must
be considered in determining the category
of income the reduction amounts offset.

Lines 4c, 4g, 4k, and 4o
Enter the reduction amounts resulting
from certified partner-level items received
from foreign partners using Form 8804-C.

See Certification of Deductions and
Losses on page 3 for additional
information. The netting rules under
section 1(h) and Notice 97-59 must be
considered in determining the category of
income the reduction amounts offset.

Line 5e
Add lines 5a through 5d.

Line 6b
If the partnership is an upper-tier
partnership in one or more lower-tier
partnerships, enter on line 6b the amount
of section 1446 tax withheld by lower-tier
partnerships with respect to ECTI
allocable to the upper-tier partnership
(see Tiered Partnerships on page 4). The
amount withheld will be shown on line 10
of the Form 8805 the partnership receives
from the lower-tier partnership. If the
partnership receives a Form 1042-S from
a lower-tier PTP, the amount withheld will
be shown in box 7 of the Form 1042-S.
(Box 1 of the Form 1042-S will show
income code 27.)

Line 6c
Line 6c applies only to partnerships
treated as foreign persons and subject to
withholding under section 1445(a) or
1445(e)(1) upon the disposition of a U.S.
real property interest.
Enter on line 6c the amount of tax
withheld under section 1445(a) and
shown on Form 8288-A, Statement of
Withholding on Dispositions by Foreign
Persons of U.S. Real Property Interests,
for the tax year in which the partnership
disposed of the U.S. real property
interest.
Also enter on line 6c the amount of
section 1445(e)(1) tax withheld on a
distribution by a domestic trust to the
partnership with respect to the disposition
of a U.S. real property interest by the
trust. The amount withheld will be shown
in box 7 of the Form 1042-S the
partnership receives from the trust. (Box 1
of the Form 1042-S will show income
code 25 or 26.)
For both of the situations described
above, do not enter more than the
amount allocable to foreign partners (as
defined in section 1446(e)). Enter
amounts allocable to U.S. partners on line
15f of Schedule K (Form 1065) and in box
15 (using code P) of Schedule K-1 (Form
1065). For Form 1065-B, enter amounts
on line 15 of Schedule K and in box 9 of
Schedule K-1.

Line 8
If Schedule A (Form 8804) is attached,
check the box on line 8 and enter the
amount of any penalty on this line.

Form 8805
Line 1b
A partnership must pay the withholding
tax for a foreign partner even if it does not
have a U.S. TIN for that partner. See
Taxpayer Identifying Number on page 1
for details.

Instructions for Forms 8804, 8805, and 8813 (2010)

-5-

Line 1c
See Address, earlier.

Line 3
Enter the type of partner (for example,
individual, corporation, partnership, trust,
estate).

Line 4
Enter the applicable two-letter code from
the list at www.irs.gov/countrycodes for
the country of which the partner is a
resident for tax purposes. These codes
are used by the IRS to provide
information to all tax treaty countries for
purposes of their tax administration.

Line 5c
See Address, earlier.

Line 8b
Check the box on this line if any of the
partnership’s ECTI is treated as not
allocable to the foreign partner identified
on line 1a and therefore exempt from
section 1446 withholding because the
income is exempt from U.S. tax for that
foreign partner by a treaty, reciprocal
exemption, or a provision of the Internal
Revenue Code.

Line 9
Enter the partnership ECTI allocable to
the foreign partner (before considering
any state and local income tax reduction
permitted under Regulations section
1.1446-6(c)(1)(iii) or any reduction
amounts resulting from certified
partner-level items received from foreign
partners using Form 8804-C).
The partnership must provide a
statement (generally Schedule K-1 (Form
1065)) to the foreign partner that lists
each income type of ECTI included on
line 9. The income types of ECTI that may
be included on line 9 are:
• Net ordinary income and net short-term
capital gains.
• 28% rate gains (non-corporate partners
only).
• Unrecaptured section 1250 gains
(non-corporate partners only).
• Qualified dividend income and net
long-term capital gains (including net
section 1231 gains) (non-corporate
partners only).
The partnership must also provide any
additional information to foreign partners
that they may reasonably need to
complete Schedule P (Form 1120-F).

Line 10
To calculate the total tax credit allowed to
a foreign partner under section 1446,
subtract from each type of ECTI allocable
to the foreign partner the amount of any
state and local income tax reduction
permitted under Regulations section
1.1446-6(c)(1)(iii) and any reduction
amounts resulting from certified
partner-level items received from foreign
partners, using Form 8804-C, that the
partnership considered in determining
that partner’s portion of the section 1446
withholding tax due. Then multiply each
net amount by the applicable percentage
(see page 3 for definition). Finally, total
the resulting amounts.

Note. If the partnership relied on a
certificate the partner submitted under
Regulations section 1.1446-6(c)(1)(ii) to
determine that the partnership is not
required to pay any section 1446 tax with
respect to that partner, enter -0- on line
10. See Form 8804-C, Part III.

Attachments
The partnership is required to attach to
Form 8805 the computation described in
the first paragraph of these line 10
instructions. Furthermore, if the total
section 1446 tax paid for a partner has
been reduced as a result of the state and
local income tax reduction permitted
under Regulations section
1.1446-6(c)(1)(iii) or as a result of relying
in whole or in part on a partner’s Form
8804-C, then the documentation
described below must also be attached to
the Form 8805 for that partner.
• If the total section 1446 tax paid for the
partner has been reduced because the
partnership relied on a Form 8804-C,
attach that Form 8804-C to the partner’s
Form 8805.
• A computation of the tax due relating to
the partner if any Forms 8804-C were
relied on. See Regulations section
1.1446-6(d)(3)(i).
• If the total section 1446 tax paid for the
partner has been reduced based on the
state and local income tax reduction
permitted under Regulations section
1.1446-6(c)(1)(iii), attach a computation of
the tax due.
Note. With respect to the last two
bulleted items, a statement showing one
computation for both items is permitted.
A partnership must attach all
applicable items referred to above
CAUTION
to reduce its section 1446 tax due
by either of the reductions referred to
above.

!

Schedule T–Beneficiary
Information
If the foreign partner is a foreign trust or
estate, the foreign trust or estate must
provide to each of its beneficiaries a copy
of the Form 8805 furnished by the
partnership. In addition, the foreign trust
or estate must complete Schedule T for
each of its beneficiaries and must provide
that Schedule T information to each
beneficiary.
The foreign trust or estate may provide
all of the information listed in the previous
paragraph on a single Form 8805 for
each of its beneficiaries. In this case, the
information provided in boxes 1a through
10 will be the same for all of the
beneficiaries, but the information provided
on Schedule T may vary from beneficiary
to beneficiary, depending on the
ownership interests of the respective
beneficiaries.

Line 11c
See Address on page 5.

Line 12
Enter the amount of ECTI on line 9 to be
included in the beneficiary’s gross
income. The foreign trust or estate must
provide a statement (generally Schedule
K-1 (Form 1041)) to each of its

beneficiaries that lists each income type
of ECTI included on line 12. The income
types of ECTI that may be included on
line 12 are:
• Net ordinary income and net short-term
capital gains.
• 28% rate gains (non-corporate
beneficiaries only).
• Unrecaptured section 1250 gains
(non-corporate beneficiaries only).
• Qualified dividend income and net
long-term capital gains (including net
section 1231 gains) (non-corporate
beneficiaries only).

Line 13
To determine the total tax credit allowed
to a beneficiary under section 1446,
multiply each type of ECTI on line 12 by
the applicable percentage (see page 3 for
definition).

Form 8813
Line 1
A partnership without a U.S. EIN must
obtain one and must pay any section
1446 withholding tax due. If the
partnership has not received an EIN by
the time it files Form 8813, indicate on
line 1 of Form 8813 the date the
partnership applied for its EIN. On receipt
of its EIN, the partnership must
immediately send that number to the IRS
using the address as shown in Where To
File on page 1. Failure to provide an EIN
may delay processing of payments on
behalf of the partners.

Line 2
See Amount of each installment payment
of withholding tax on page 3 for
information on calculating the amount of
the payment.

result of the state and local income tax
reduction permitted under Regulations
section 1.1446-6(c)(1)(iii) or as a result of
relying in whole or in part on a partner’s
Form 8804-C, then the documentation
described below must be attached to all
Forms 8813 starting with the first
installment period in which the certificate
was considered. Under these
circumstances, a partnership must file
Form 8813 for an installment period even
if no section 1446 withholding tax is due.
The required documentation is as
follows:
• If the partnership reduced an
installment payment because it relied on
Forms 8804-C, attach all such Forms
8804-C to Form 8813. If the same Form
8804-C for a partner is used in a
subsequent installment period, see
Regulations section 1.1446-6(d)(3)(i) for a
substitute to attaching that Form 8804-C
to the Form 8813 for subsequent
installment periods.
• A computation of the tax due relating to
each partner whose Form 8804-C it relied
on. See Regulations section
1.1446-6(d)(3)(i).
• If the partnership reduced an
installment payment based on state and
local income tax deductions permitted
under Regulations section
1.1446-6(c)(1)(iii), attach a computation of
the tax due.
Note. With respect to the last two
bulleted items, a statement showing one
computation for both items is permitted.
A partnership must attach all
applicable items referred to above
CAUTION
to reduce its section 1446 tax due
by either of the reductions referred to
above.

!

Line 3
See Address on page 5.

Attachments
If the total section 1446 tax paid for an
installment period has been reduced as a
Paperwork Reduction Act Notice. We ask for the information on these forms 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 times are:
Form
Recordkeeping
Learning about the law or the form
Preparing the form
Copying, assembling, and sending the
form to the IRS

8804
52 min.
1 hr., 11 min.
1 hr., 01 min.

8805
39 min.
53 min.
21 min.

8813
26 min.
49 min.
16 min.

31 min.

16 min.

10 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. You
can write to the Internal Revenue Service, Tax Products Coordinating Committee,
SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224.
Do not send the tax forms to this address. Instead, see Where To File on page 1.

-6-

Instructions for Forms 8804, 8805, and 8813 (2010)