8804 Schedule A Penalty for Underpayment of Estimated Section 1446 Tax B

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Penalty for Underpayment of Estimated
Section 1446 Tax by Partnerships

Schedule A
(Form 8804)
Department of the Treasury
Internal Revenue Service
Name

▶ Attach

▶ Go

OMB No. 1545-0123

to Form 8804.

to www.irs.gov/Forms-Pubs/About-Schedule-A-Form-8804 for instructions and the latest information.

2018

Employer identification number

DRAFT AS OF
July 27, 2018
DO NOT FILE

Note: Generally, the partnership isn’t 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 line 65
of this Schedule A on line 8 of Form 8804, but don’t 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 doesn’t 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

Enter the total section 1446 tax shown on the partnership’s 2018 Form 8804, line 5f. If less than $500,
don’t complete or file this form. The partnership doesn’t owe the penalty . . . . . . . . . .

2

Enter the total section 1446 tax that would have been due for 2017, without regard to reductions for
certified foreign partner-level items, on the effectively connected taxable income (ECTI) allocable to
foreign partners for 2017.

3

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part III

Figuring the Underpayment

(a)

(b)

1

2
3

(c)

(d)

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 . . . . . . . . . . .

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% (0.25) of line 3 above in each column . . . . .

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

12

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
column. Otherwise, go to line 13 . . . . . . . .

12

13

Overpayment. If line 5 is less than line 10, subtract line 5
from line 10. Then go to line 7 of the next column
. .
13
Go to Part VII on page 5 to figure the penalty. Don’t go to Part VII if there are no entries on line 12—no penalty is owed.

4

5

6

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For Paperwork Reduction Act Notice, see separate instructions.

Cat. No. 40853F

Schedule A (Form 8804) 2018

Page 2

Schedule A (Form 8804) 2018

Part IV

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.)

Check this box if the partnership has elected to attach a schedule
that expands lines 15 and 22 through 25 to reflect Regulations
section 1.1446-3(a)(2). See instructions . . . . . . . . ▶
14
Enter ECTI allocable to all foreign partners for the following periods:
Tax year beginning in 2015

14a

b

Tax year beginning in 2016

14b

c

Tax year beginning in 2017

14c

(d)
First 11
months

a
b

Tax year beginning in 2016

16b

c

Tax year beginning in 2017

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 3.0.

21

22a

Divide line 15 by line 21.

22a

b

Extraordinary items. See instructions.

22b

c

Combine lines 22a and 22b.

22c

Reduction to line 22c amount for state and local taxes under
Regulations section 1.1446-6(c)(1)(iii) and for certified foreign
partner-level items submitted using Form 8804-C. See instructions.
Subtract line 23 from line 22c. If zero or less, enter -0-.

23
24

Multiply the ECTI on line 24 allocable to non-corporate partners by
37% (0.37).

25a

23
24
25a
b
c

Entire year

Multiply the ECTI on line 24 allocable to corporate partners by 21%
(0.21).
25b
Combine lines 25a and 25b.
25c

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.
Add lines 26a through 26c.
Divide line 27 by 3.0.

26c
27
28

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

29

29

(c)
First 8
months

Enter ECTI allocable to all foreign partners for each period for the
tax year beginning in 2018 (see instructions for the treatment of
extraordinary items).
15
Enter ECTI allocable to all foreign partners for the following periods:
First 4 months First 6 months First 9 months
Tax year beginning in 2015
16a

16

27
28

(b)
First 5
months

DRAFT AS OF
July 27, 2018
DO NOT FILE

a

15

(a)
First 3
months

Schedule A (Form 8804) 2018

Page 3

Schedule A (Form 8804) 2018

Part V

Annualized Income Installment Method
(a)

(b)

First

30

Annualization periods. See instructions.

30

31

Enter ECTI allocable to all foreign partners for each annualization
period (see instructions for the treatment of extraordinary items):
Total ECTI allocable to corporate partners.

31a

Total ECTI allocable to non-corporate partners other than on lines
31c, 31d, and 31e.
28% rate gain (non-corporate partners only).
Unrecaptured section 1250 gain (non-corporate partners only).

31b
31c
31d

Adjusted net capital gain (including qualified dividend income and
net section 1231 gains) (non-corporate partners only).
Annualization amounts. See instructions.

31e
32

a
b
c
d
e
32
33

(c)

First

months

(d)

First

months

First

months

DRAFT AS OF
July 27, 2018
DO NOT FILE

months

Annualized ECTI allocable to all foreign partners (see instructions
for the treatment of extraordinary items):
a

Total ECTI allocable to corporate partners (multiply line 31a by line
32).

33a

b

Reduction to line 33a for state and local taxes under Regulations
section 1.1446-6(c)(1)(iii). See instructions.

33b (

)(

)(

)(

)

c

Reduction to line 33a for certified foreign partner-level items
submitted using Form 8804-C. See instructions.
Combine lines 33a, 33b, and 33c.

33c (
33d

)(

)(

)(

)

e

Total ECTI allocable to non-corporate partners other than on lines
33i, 33m, and 33q (multiply line 31b by line 32).

33e

f

Reduction to line 33e for state and local taxes under Regulations
section 1.1446-6(c)(1)(iii). See instructions.

33f

g

Reduction to line 33e for certified foreign partner-level items
submitted using Form 8804-C. See instructions.
Combine lines 33e, 33f, and 33g.

33g
33h

i

28% rate gain allocable to non-corporate partners (multiply line
31c by line 32).

33i

j

Reduction to line 33i for state and local taxes under Regulations
section 1.1446-6(c)(1)(iii). See instructions.

33j (

)(

)(

)(

)

k

Reduction to line 33i for certified foreign partner-level items
submitted using Form 8804-C. See instructions.
Combine lines 33i, 33j, and 33k.

33k (
33l

)(

)(

)(

)

d

h

l

m Unrecaptured section 1250 gain allocable to non-corporate
partners (multiply line 31d by line 32).

33m

n

Reduction to line 33m for state and local taxes under Regulations
section 1.1446-6(c)(1)(iii). See instructions.

33n (

)(

)(

)(

)

o

Reduction to line 33m for certified foreign partner-level items
submitted using Form 8804-C. See instructions.
Combine lines 33m, 33n, and 33o.

33o (
33p

)(

)(

)(

)

q

Adjusted net capital gain (including qualified dividend income and
net section 1231 gains) allocable to non-corporate partners
(multiply line 31e by line 32).

33q

r

Reduction to line 33q for state and local taxes under Regulations
section 1.1446-6(c)(1)(iii). See instructions.

33r (

)(

)(

)(

)

s

Reduction to line 33q for certified foreign partner-level items
submitted using Form 8804-C. See instructions.
Combine lines 33q, 33r, and 33s.
Figure the tax on line 33 amounts as follows:
Multiply line 33d by 21% (0.21).
Multiply line 33h by 37% (0.37).
Multiply line 33l by 28% (0.28).
Multiply line 33p by 25% (0.25).
Multiply line 33t by 20% (0.20).
Add lines 34a through 34e.

33s (
33t

)(

)(

)(

)

p

t
34
a
b
c
d
e
f

34a
34b
34c
34d
34e
34f
Schedule A (Form 8804) 2018

Page 4

Schedule A (Form 8804) 2018

Part V
35
36

Annualized Income Installment Method (continued)

Applicable percentage.
Multiply line 34f by line 35.

Part VI

35
36

38
39
40
41
42
43

(b)

(c)

(d)

50% (0.50)

75% (0.75)

100% (1.00)

1st
installment

2nd
installment

3rd
installment

4th
installment

Required Installments

DRAFT AS OF
July 27, 2018
DO NOT FILE

Note: Complete lines 37 through 43 of one column before completing
the next column.
37

(a)

25% (0.25)

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.
37
Add the amounts in all preceding columns of line 43. See instructions. 38
Adjusted seasonal or annualized income installments. Subtract
line 38 from line 37. If zero or less, enter -0-.
Enter 25% (0.25) of line 1 in each column.
Subtract line 43 of the preceding column from line 42 of the
preceding column.
Add lines 40 and 41.

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

39
40
41
42
43

Schedule A (Form 8804) 2018

Page 5

Schedule A (Form 8804) 2018

Part VII

Figuring the Penalty
(a)

44 Enter the date of payment or the 15th day of the 3rd 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 3rd month.
45 Number of days from due date of installment on line 4 to the
date shown on line 44 . . . . . . . . . . . .

(b)

(c)

44

DRAFT AS OF
July 27, 2018
DO NOT FILE

46 Number of days on line 45 after 4/15/2018 and before 7/1/2018 .

(d)

45

46

.

47 $

47 Underpayment on line 12 × Number of days on line 46 × 5% (0.05)

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

365

48 Number of days on line 45 after 6/30/2018 and before 10/1/2018 .

48

.

49 $

49 Underpayment on line 12 × Number of days on line 48 × 5% (0.05)
365

50 Number of days on line 45 after 9/30/2018 and before 1/1/2019 .

.

50

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

.

51 $

52 Number of days on line 45 after 12/31/2018 and before 4/1/2019 .

.

52

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

.

53 $

54 Number of days on line 45 after 3/31/2019 and before 7/1/2019 .

.

54

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

.

.

55 $

56 Number of days on line 45 after 6/30/2019 and before 10/1/2019 .

.

56

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

.

.

57 $

58 Number of days on line 45 after 9/30/2019 and before 1/1/2020 .

.

58

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

.

.

59 $

60 Number of days on line 45 after 12/31/2019 and before 4/1/2020 .

.

60

61 Underpayment on line 12 × Number of days on line 60 × *%

.

.

61 $

62 Number of days on line 45 after 3/31/2020 and before 5/16/2020 .

.

62

63 Underpayment on line 12 × Number of days on line 62 × *%

.

63 $

365

365

365

365

365

366

.

366

64 Add lines 47, 49, 51, 53, 55, 57, 59, 61, and 63 . . . . . .
64 $
65 Penalty. Add columns (a) through (d) of line 64. Enter the total here and on Form 8804,
line 8 .

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65 $

* 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 (IRB). Go to www.irs.gov/irb for
the IRBs. You can subscribe to IRS Newswire to receive news releases of the quarterly interest rates, and IRS GuideWire to receive emails
with a link to the revenue rulings in which the quarterly interest rates are published by going to www.irs.gov/uac/e-news-subscriptions-2.
Schedule A (Form 8804) 2018