i8865

U.S. Individual Income Tax Return

i8865

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2022

Instructions for Form 8865

Department of the Treasury
Internal Revenue Service

Return of U.S. Persons With Respect to Certain Foreign Partnerships
Section references are to the Internal
Revenue Code unless otherwise noted.

Contents

General Instructions . . . . . . . . . .
Specific Instructions . . . . . . . . . .
Schedule A. Constructive
Ownership of Partnership
Interest . . . . . . . . . . . . . . .
Schedule A-1. Certain Partners of
Foreign Partnership . . . . . . .
Schedule A-2. Foreign Partners of
Section 721(c) Partnership . .
Schedule A-3. Affiliation
Schedule . . . . . . . . . . . . . .
Schedule B. Income
Statement—Trade or
Business Income . . . . . . . .
Schedule D. Capital Gains and
Losses . . . . . . . . . . . . . . .
Schedule G (Form 8865).
Statement of Application of
the Gain Deferral Method
Under Section 721(c) . . . . . .
Schedule H (Form 8865).
Acceleration Events and
Exceptions Reporting
Relating to Gain Deferral
Method Under Section
721(c) . . . . . . . . . . . . . . . .
Schedules K, Partners' Distributive
Share Items, and K-1 (Form
8865), Partner’s Share of
Income, Deductions, Credits,
etc. . . . . . . . . . . . . . . . . .
Schedules K-2 (Form 8865),
Partners’ Distributive Share
Items—International, and K-3
(Form 8865), Partner’s Share
of Income, Deductions,
Credits, etc.—International . .
Schedule L. Balance Sheets per
Books . . . . . . . . . . . . . . . .
Schedule M. Balance Sheets for
Interest Allocation . . . . . . . .
Schedule M-1. Reconciliation of
Income (Loss) per Books With
Income (Loss) per Return . . .
Schedule M-2. Analysis of
Partners' Capital Accounts . .
Schedule N. Transactions
Between Controlled Foreign
Partnership and Partners or
Other Related Entities . . . . .
Schedule O (Form 8865). Transfer
of Property to a Foreign
Partnership . . . . . . . . . . . .
Schedule P (Form 8865).
Acquisitions, Dispositions,
and Changes of Interests in a
Foreign Partnership . . . . . . .
List of Codes . . . . . . . . . . . . . .
Index . . . . . . . . . . . . . . . . . . .

Nov 14, 2022

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Future Developments

an eligible partner to claim a foreign
tax credit.

What’s New

Only the general instructions for
Schedules B, K, K-1, M-1, and M-2
are included later in these
instructions. If you are required to
complete these schedules for Form
8865, use the specific instructions for
the corresponding schedules of Form
1065, U.S. Return of Partnership
Income.

For the latest information about
developments related to Form 8865,
its schedules, and its instructions,
such as legislation enacted after they
were published, go to IRS.gov/
Form8865.

. . 10

See What’s New in the Instructions for
Form 1065 for changes and new
Internal Revenue Code sections that
may affect foreign partnerships with
fiscal years, corporate partners, or
certain impacted activities.

. . 11

Reminders

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. . 15

. . 16
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Schedules K-2 (Form 8865) and
K-3 (Form 8865) for partnerships.
For tax years beginning after 2020,
most items of international tax
relevance are reported on Schedules
K-2 and K-3, replacing prior reporting
on Form 8865, Schedules K and K-1,
line 16, Foreign transactions, and
certain reporting on Form 8865,
Schedules K and K-1, line 20, Other
information.

The schedules are designed to
provide greater clarity for partners on
how to compute their U.S. income tax
liability regarding items of
international tax relevance, including
claiming deductions and credits. Go
to IRS.gov for the schedules and the
Instructions for Schedules K-2 and
K-3 (Form 8865) for more information.
Form 8865, Schedules K and K-1,
retain line 16 for the partnership to
check a box indicating that it has
items of international tax relevance
and that it completed Schedules K-2
and K-3. For purposes of basis
adjustments and to reconcile income,
Form 8865 retains total foreign taxes
paid or accrued but moves this
reporting to Schedule K, line 21. See
the Instructions for Form 1065 for
amounts to report on line 21.
Important. Foreign taxes paid or
accrued must be reported on
Schedules K-2 and K-3 for purposes
of reporting information necessary for
Cat. No. 26053N

General Instructions

IF you are
completing Form
8865...

THEN use the
instructions for
Form 1065...

Schedule B

page 1 (income and
deductions).

Schedules K and K-1 Schedules K and K-1.
Schedule K-3

Schedule K-3.

Schedule L

Schedule L.

Schedule M-1

Schedule M-1.

Schedule M-2

Schedule M-2.

Note. If you are reporting capital
gains and losses, use Schedule D
(Form 1065). See the Instructions for
Schedule D (Form 1065).

Purpose of Form

Use Form 8865 to report the
information required under section
6038 (reporting with respect to
controlled foreign partnerships),
section 6038B (reporting of transfers
to foreign partnerships), or section
6046A (reporting of acquisitions,
dispositions, and changes in foreign
partnership interests).

Who Must File

A U.S. person qualifying under one or
more of the Categories of Filers (see
below) must complete and file Form
8865. These instructions and the
Filing Requirements for Categories of
Filers chart, later, explain the
information, statements, and
schedules required for each category
of filer. If you qualify under more than
one category for a particular foreign

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partnership, you must submit all the
items required for each category
under which you qualify.

required to attach a copy of the Form
8832 to the tax return to which the
Form 8865 is being attached.

Example. If you qualify as a
Category 2 and a Category 3 filer, you
must submit all the schedules
required of Category 2 filers (page 1
of Form 8865, and Schedules A, A-2,
N, K-1, and K-3) plus any additional
schedules that Category 3 filers are
required to submit (Schedules A-1
and O).

If a domestic section 721(c)
partnership is formed on or after
January 18, 2017, and the gain
deferral method is applied, then a
U.S. transferor must file Form 8865
with respect to that partnership. See
Regulations section 1.721(c)-6(b)(4).
See Section 721(c) partnership, Gain
deferral method, and U.S. transferor,
later.

Complete a separate Form 8865
and the applicable schedules for each
foreign partnership.
File the 2022 Form 8865 with your
income tax return for your tax year
beginning in 2022.
If a Form 8832, Entity Classification
Election, was filed for this entity for the
current tax year, see When To File
and Where To File in the instructions
for Form 8832 to determine if you are

A U.S. transferor that is required to
provide information with respect to a
partnership under Regulations
sections 1.721(c)-6(b)(2)(iv) and
1.721(c)-6(b)(3)(xi) must file a
separate Form 8865 (along with all
necessary schedules and
attachments) for each partnership
treated as a U.S. transferor under
Regulations sections 1.721(c)-3(d)

and 1.721(c)-6(c)(2). See U.S.
transferor, later.

Categories of Filers
Category 1 filer. A Category 1 filer is
a U.S. person who controlled the
foreign partnership at any time during
the partnership's tax year. Control of a
partnership is ownership of more than
a 50% interest in the partnership. See
the definition of 50% interest, later.
There may be more than one
Category 1 filer for a partnership for a
particular partnership tax year. See
U.S. person and Foreign partnership,
later.
A Category 1 filer also includes a
U.S. transferor who must report
certain information with respect to a
section 721(c) partnership for the tax
year of contribution and subsequent
years, pursuant to Regulations
section 1.721(c)-6. A Category 1 filer
fulfills this reporting requirement by

Filing Requirements for Categories of Filers
Category of Filers

Filing Requirements

1

2

3

4

Identifying information—page 1 of Form 8865
Schedule A—Constructive Ownership of Partnership Interest
Schedule A-1—Certain Partners of Foreign Partnership
Schedule A-3—Affiliation Schedule
Schedule B—Income Statement—Trade or Business Income
Schedule G (Form 8865)—Statement of Application of the Gain Deferral Method Under Section
721
Schedule H (Form 8865)—Acceleration Events and Exceptions Reporting Relating to Gain
Deferral Method Under Section 721(c)
Schedule K—Partners' Distributive Share Items
Schedule K-2 (Form 8865)—Partners’ Distributive Share Items—International
Schedule K-3 (Form 8865)—Partner’s Share of Income, Deductions, Credits, etc.—International
Schedule L—Balance Sheets per Books
Schedule M—Balance Sheets for Interest Allocation
Schedule M-1—Reconciliation of Income (Loss) per Books With Income (Loss) per Return
Schedule M-2—Analysis of Partners' Capital Accounts
Schedule N—Transactions Between Controlled Foreign Partnership and Partners or Other
Related Entities
Schedule D—Schedule D (Form 1065), Capital Gains and Losses
Schedule K-1 (Form 8865)—Partner's Share of Income, Deductions, Credits, etc. (direct
partners only)
Schedule O (Form 8865)—Transfer of Property to a Foreign Partnership
Schedule P (Form 8865)—Acquisitions, Dispositions, and Changes of Interests in a Foreign
Partnership

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Instructions for Form 8865 (2022)

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filing Schedule G and, in certain
circumstances, Schedule H. See
Section 721(c) partnership and U.S.
transferor, later.
Category 2 filer. A Category 2 filer is
a U.S. person who at any time during
the tax year of the foreign partnership
owned a 10% or greater interest in the
partnership while the partnership was
controlled by U.S. persons each
owning at least a 10% interest.
However, if the foreign partnership
had a Category 1 filer at any time
during that tax year, no person will be
considered a Category 2 filer. See the
definition of a 10% interest, later.
Category 3 filer. A Category 3 filer is
a U.S. person who contributed
property during that person's tax year
to a foreign partnership in exchange
for an interest in the partnership (a
section 721 transfer), if that person
either:
1. Owned directly or constructively
at least a 10% interest in the foreign
partnership immediately after the
contribution, or
2. The value of the property
contributed (when added to the value
of any other property contributed to
the partnership by such person, or
any related person, during the
12-month period ending on the date of
transfer) exceeds $100,000.
If a domestic partnership
contributes property to a foreign
partnership, the domestic
partnership's partners are considered
to have transferred a proportionate
share of the contributed property to
the foreign partnership. However, if
the domestic partnership files Form
8865 and properly reports all the
required information with respect to
the contribution, its partners will not
be required to report the transfer.
A Category 3 filer includes a U.S.
transferor who (i) contributes section
721(c) property to a section 721(c)
partnership, and (ii) has reporting
requirements pursuant to Regulations
section 1.721(c)-6(b)(2). The
Category 3 filer fulfills this reporting
requirement by filing Schedule G, in
addition to Schedule O, and, in certain
circumstances, Schedule H. See
Section 721(c) property, later.
Category 3 also includes a U.S.
person that previously transferred
appreciated property to the
partnership and was required to report
Instructions for Form 8865 (2022)

that transfer under section 6038B, if
the foreign partnership disposed of
such property while the U.S. person
remained a direct or indirect partner in
the partnership.
Category 4 filer. A Category 4 filer is
a U.S. person that had a reportable
event under section 6046A during that
person's tax year. There are three
categories of reportable events under
section 6046A: acquisitions,
dispositions, and changes in
proportional interests.
Acquisitions. A U.S. person that
acquires a foreign partnership interest
has a reportable event if:
• The person didn’t own a 10% or
greater direct interest in the
partnership and, as a result of the
acquisition, the person owns a 10% or
greater direct interest in the
partnership (for example, from 9% to
10%). For purposes of this rule, an
acquisition includes an increase in a
person's direct proportional interest
(see Changes in proportional
interests, later); or
• Compared to the person's direct
interest when the person last had a
reportable event, after the acquisition
the person's direct interest has
increased by at least a 10% interest
(for example, from 11% to 21%).
An acquisition of a section 721(c)
partnership interest may be an
acceleration event exception under
the gain deferral method. See
Regulations section 1.721(c)-5. In this
case, the acquirer may become a
successor U.S. transferor and may
have a reporting requirement under
Regulations section 1.721(c)-6. See
the specific instructions for
Schedule H, later.
Dispositions. A U.S. person that
disposes of a foreign partnership
interest has a reportable event if:
• The person owned a 10% or
greater direct interest in the
partnership before the disposition
and, as a result of the disposition, the
person owns less than a 10% direct
interest (for example, from 10% to
8%). For purposes of this rule, a
disposition includes a decrease in a
person's direct proportional interest;
or
• Compared to the person's direct
interest when the person last had a
reportable event, after the disposition
the person's direct interest has
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decreased by at least a 10% interest
(for example, from 21% to 11%).
A disposition of a section 721(c)
partnership interest may be an
acceleration event for purposes of
applying the gain deferral method.
The U.S. transferor may be required
to recognize gain in an amount equal
to the remaining built-in gain on the
section 721(c) property previously
contributed to the section 721(c)
partnership. See Regulations section
1.721(c)-4. For acceleration events
exceptions, see Regulations section
1.721(c)-5. See the specific
instructions for Schedule H, later.
Changes in proportional
interests. A U.S. person has a
reportable event if compared to the
person's direct proportional interest
the last time the person had a
reportable event, the person's direct
proportional interest has increased or
decreased by at least the equivalent
of a 10% interest in the partnership.
Special rule for a partnership
interest owned on December 31,
1999. If the U.S. person owned at
least a 10% direct interest in the
foreign partnership on December
31,1999, then comparisons should be
made to the person's direct interest on
December 31,1999. Once the person
has a reportable event after
December 31,1999, future
comparisons should be made by
reference to the last reportable event.

Exceptions to Filing
Multiple Category 1 filers. If during
the tax year of the partnership more
than one U.S. person qualifies as a
Category 1 filer, only one of these
Category 1 partners is required to file
Form 8865. A U.S. person with a
controlling interest in the losses or
deductions of the partnership isn’t
permitted to be the filer of Form 8865
if another U.S. person has a
controlling interest in capital or profits;
only the latter may file the return. The
U.S. person that files the Form 8865
must complete item F on page 1.
The single Form 8865 to be filed
must contain all of the information that
would be required if each Category 1
filer filed a separate Form 8865.
Specifically, separate Schedules N,
K-1, and K-3 (if applicable) must be
attached to the Form 8865 for each
Category 1 filer. Also, items B, C, and
D on page 1 and Schedule A on

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page 2 of Form 8865 must be
completed for each Category 1 filer
not filing the form. Attach a separate
statement listing this information to
the single Form 8865.
A Category 1 filer not filing Form
8865 must attach a statement entitled
“Controlled Foreign Partnership
Reporting” to that person's income tax
return.
The statement must include the
following information.
• A statement that the person
qualified as a Category 1 filer, but is
not submitting Form 8865 under the
multiple Category 1 filers exception.
• The name, address, and identifying
number (if any) of the foreign
partnership of which the person
qualified as a Category 1 filer.
• A statement that the filing
requirement has been or will be
satisfied.
• The name and address of the
person filing Form 8865 for this
partnership.
• The Internal Revenue Service
Center where the Form 8865 must be
filed (or indicate “electronic filing” if
the Form 8865 has been or will be
filed electronically).
A U.S. person who qualifies
for this exception to the
CAUTION Category 1 filing requirement
would still have to file a separate Form
8865 if that person is also subject to
the filing requirements of Category 3
or 4. This separate Form 8865 would
include all the information required for
a Category 3 filer, a Category 4 filer,
or a U.S. transferor who must report
certain information with respect to a
section 721(c) partnership for the year
of contribution and subsequent years,
pursuant to Regulations section
1.721(c)-6, in addition to the
“Controlled Foreign Partnership
Reporting” statement.

!

Constructive owners. See
Constructive ownership, later. A
Category 1 or 2 filer that doesn’t own
a direct interest in the partnership and
that is required to file this form solely
because of constructive ownership
from a U.S. person(s) isn’t required to
file Form 8865 if:
1. Form 8865 is filed by the U.S.
person(s) through which the indirect
partner constructively owns an
interest in the foreign partnership,

2. The U.S. person through which
the indirect partner constructively
owns an interest in the foreign
partnership is also a constructive
owner and meets all the requirements
of this constructive ownership filing
exception, or
3. Form 8865 is filed for the
foreign partnership by another
Category 1 filer under the multiple
Category 1 filers exception.
To qualify for the constructive
ownership filing exception, the indirect
partner must file with its income tax
return a statement entitled “Controlled
Foreign Partnership Reporting.”
This statement must contain the
following information.
1. A statement that the indirect
partner was required to file Form
8865, but isn’t doing so under the
constructive owners exception.
2. The names and addresses of
the U.S. persons whose interests the
indirect partner constructively owns.
3. The name and address of the
foreign partnership for which the
indirect partner would have had to
have filed Form 8865 but for this
exception.
4. If the indirect partner is a
domestic corporation, a statement
setting forth all the information that the
indirect partner would have had to
provide in response to questions G8a
and G8b on Form 8865. See Item
H10. Separate Units Note, later, for
more information.
Members of an affiliated group of
corporations filing a consolidated
return. If one or more members of an
affiliated group of corporations filing a
consolidated return qualify as
Category 1 or 2 filers for a particular
foreign partnership, the common
parent corporation may file one Form
8865 on behalf of all of the members
of the group required to report. Except
for group members who also qualify
under the constructive owners
exception, the Form 8865 must
contain all the information that would
have been required to be submitted if
each group member filed its own
Form 8865.
Exception for certain trusts. Trusts
relating to state and local government
employee retirement plans aren’t
required to file Form 8865.
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Exception for certain Category 4
filers. If you qualify as a Category 3
and 4 filer because you contributed
property to a foreign partnership in
exchange for a 10% or greater interest
in that partnership, you aren’t required
to report this transaction under both
Category 3 and 4 filing requirements.
If you properly report the contribution
of property under the Category 3
rules, you aren’t required to report it
as a Category 4 filer. However, the
acquisition will count as a reportable
event to determine if a later change in
your partnership interest qualifies as a
reportable event under Category 4.
Example. Partner A doesn’t own
an interest in FPS, a foreign
partnership. Partner A transfers
property to FPS in exchange for a
15% direct interest. Partner A qualifies
as a Category 3 filer because he
transferred property to a foreign
partnership and owned at least a 10%
interest in FPS immediately after the
contribution. Partner A is also a
Category 4 filer because he didn’t own
a 10% or greater direct interest in FPS
and as a result of the acquisition now
owns a 10% or greater direct interest
in FPS. If Partner A properly reports
the contribution on Form 8865 as a
Category 3 filer, Partner A isn’t
required to report his acquisition of the
15% interest in FPS as a Category 4
filer.

Relief for Category 1 and 2
Filers When the Foreign
Partnership Files Form 1065

If a foreign partnership files Form
1065 for its tax year, Category 1 and 2
filers may use a copy of the
completed Form 1065 schedules in
place of the equivalent schedules of
Form 8865.
If you file Form 8865 with an
electronically filed income tax return,
see the electronic filing publications
identified in the instructions for your
income tax return for more
information.
See the first paragraph under
General Instructions, earlier, for the
Form 1065 schedules that are
equivalent to the Form 8865
schedules.
Example. Partner A is a Category
1 filer with respect to FPS, a foreign
partnership, during the 2022 tax year.
FPS completes and files a Form 1065
for its 2022 tax year. Instead of
Instructions for Form 8865 (2022)

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completing Schedules B, K, K-2, L,
M-1, M-2, and K-1 and K-3 of Form
8865, Partner A may attach to its
Form 8865 page 1 of Form 1065 and
Form 1065 Schedules K, K-2, L, M-1,
M-2, and K-1 and K-3 (including the
Schedules K-1 and K-3 for Partner A
and all other U.S. persons owning
10% or greater direct interests in
FPS). Partner A must complete the
following items and schedules on
Form 8865.
• The first and second pages.
• Schedule A.
• Schedule A-1.
• Schedule A-2.
• Schedule A-3.
• Schedule G (Form 8865).
• Schedule H (Form 8865).
• Schedule M.
• Schedule N.

Example. Partner A is a Category
2 filer with respect to FPS, a foreign
partnership. If FPS completes and
files a Form 1065 for its 2022 tax year,
Partner A may file with Form 8865 the
Schedules K-1 and K-3 (Form 1065)
that it receives from the partnership
instead of Schedules K-1 and K-3
(Form 8865). Partner A must
complete the following items and
schedules on Form 8865.
• The first and second pages.
• Schedule A.
• Schedule A-2.
• Schedule N.

When and Where To File

Attach Form 8865 to your income tax
return (or, if applicable, partnership or
exempt organization return) and file
both by the due date (including
extensions) for that return. If you don’t
have to file an income tax return, you
must file Form 8865 separately with
the IRS at the time and place you
would be required to file an income
tax return (or, if applicable, a
partnership or exempt organization
return). See below for penalties that
may apply if you don’t file Form 8865
on time.

Definitions
Partnership. A partnership is the
relationship between two or more
persons who join to carry on a trade or
business, with each person
contributing money, property, labor, or
skill and each expecting to share in
the profits and losses of the business
whether or not a formal partnership
agreement is made.
Instructions for Form 8865 (2022)

The term “partnership” includes a
limited partnership, syndicate, group,
pool, joint venture, or other
unincorporated organization, through
or by which any business, financial
operation, or venture is carried on,
that isn’t, within the meaning of the
regulations under section 7701, a
corporation, trust, estate, or sole
proprietorship.
A joint undertaking merely to share
expenses isn’t a partnership. Mere
co-ownership of property that is
maintained and leased or rented isn’t
a partnership. However, if the
co-owners provide services to the
tenants, a partnership exists.
Foreign partnership. A foreign
partnership is a partnership that isn’t
created or organized in the United
States or under the law of the United
States or of any state or the District of
Columbia. If a domestic section
721(c) partnership is formed on or
after January 18, 2017, and the gain
deferral method is applied, then the
section 721(c) partnership is treated
as a foreign partnership for purposes
of Form 8865 and these instructions.
See Regulations section 1.721(c)-6(b)
(4).
Section 721(c) partnership. A
partnership (domestic or foreign) is a
section 721(c) partnership if there is a
contribution of section 721(c) property
to the partnership and, after the
contribution (and all transactions
related to the contribution), (A) a
related foreign person with respect to
the U.S. transferor is a direct or
indirect partner in the partnership; and
(B) the U.S. transferor and related
persons own 80% or more of the
interests in partnership capital, profits,
deductions, or losses. See
Regulations section 1.721(c)-1(b)(14).
U.S. transferor. A U.S. transferor is
a U.S. person other than a domestic
partnership. See Regulations section
1.721(c)-1(b)(18).
Section 721(c) property. Section
721(c) property is property (other than
excluded property) with built-in gain
that is contributed to a partnership by
a U.S. transferor, including pursuant
to a contribution described in
Regulations section 1.721(c)-2(d)
(partnership look-through rule). See
Regulations section 1.721(c)-1(b)(15).
Gain deferral contribution. A gain
deferral contribution is a contribution
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of section 721(c) property to a section
721(c) partnership with respect to
which the recognition of gain is
deferred under the gain deferral
method. See Regulations section
1.721(c)-1(b)(7).
Gain deferral method. The gain
deferral method is the method
described in Regulations section
1.721(c)-3(b) applied to avoid the
immediate recognition of gain upon a
contribution of section 721(c) property
to a section 721(c) partnership under
Regulations section 1.721(c)-2(b).
50% interest. A 50% interest in a
partnership is an interest equal to:
• 50% of the capital,
• 50% of the profits, or
• 50% of the deductions or losses.
For purposes of determining a 50%
interest, the constructive ownership
rules described below apply.
10% interest. A 10% interest in a
partnership is an interest equal to:
• 10% of the capital,
• 10% of the profits, or
• 10% of the deductions or losses.
For purposes of determining a 10%
interest, the constructive ownership
rules described below apply.
Constructive ownership. For
purposes of determining an interest in
a partnership, the constructive
ownership rules of section 267(c)
(excluding section 267(c)(3)) apply,
taking into account that such rules
refer to corporations and not to
partnerships. Generally, an interest
owned directly or indirectly by or for a
corporation, partnership, estate, or
trust shall be considered as being
owned proportionately by its owners,
partners, or beneficiaries.
Also, an individual is considered to
own an interest owned directly or
indirectly by or for their family. The
family of an individual includes only
that individual's spouse, siblings,
ancestors, and lineal descendants. An
interest will be attributed from a
nonresident alien individual under the
family attribution rules only if the
person to whom the interest is
attributed owns a direct or indirect
interest in the foreign partnership
under section 267(c)(1) or (5).
U.S. person. A U.S. person is a
citizen or resident of the United
States, a domestic partnership, a
domestic corporation, and any estate

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or trust that isn’t foreign. See section
7701(a)(30).
Control of a corporation. For
purposes of Schedule N, control of a
corporation is ownership of stock
possessing more than 50% of the total
combined voting power, or more than
50% of the total value of shares of all
classes of stock of the corporation.
For rules concerning indirect
ownership and attribution, see
Regulations section 1.6038-2(c).
Change in a proportional interest.
A partner's proportional interest in a
foreign partnership can change as a
result of changes in other partners'
interests, for example, when another
partner withdraws from the
partnership. A partner's proportional
interest can also change, for example,
by operation of the partnership
agreement (for example, if the
partnership agreement provides that a
partner's interest in profits will change
on a set date or when the partnership
has earned a specified amount of
profits, then the partner's proportional
interest changes when the set date or
specified amount of profits is
reached).

Penalties
Failure to timely submit all information required of Category 1 and
2 filers.
• A $10,000 penalty is imposed for
each tax year of each foreign
partnership for failure to furnish the
required information within the time
prescribed. If the information isn’t filed
within 90 days after the IRS has
mailed a notice of the failure to the
U.S. person, an additional $10,000
penalty (per foreign partnership) is
charged for each 30-day period, or
fraction thereof, during which the
failure continues after the 90-day
period has expired. The additional
penalty is limited to a maximum of
$50,000 for each failure.
• Any person who fails to furnish all of
the information required within the
time prescribed will be subject to a
reduction of 10% of the foreign taxes
available for credit under sections 901
and 960. If the failure continues 90
days or more after the date the IRS
mails notice of the failure, an
additional 5% reduction is made for
each 3-month period, or fraction
thereof, during which the failure
continues after the 90-day period has

expired. See section 6038 (and the
underlying regulations) for the
maximum reduction, the exception
due to reasonable cause, and the
limits on the amount of these
penalties.
• Criminal penalties under sections
7203, 7206, and 7207 may apply for
failure to file or for filing false or
fraudulent information.
Additionally, any person that files
under the constructive owners
exception may be subject to these
penalties if all the requirements of the
exception aren’t met. Any person
required to file Form 8865 who
doesn’t file under the multiple
Category 1 filers exception may be
subject to the above penalties if the
other person doesn’t file a correctly
completed form and schedules. See
Exceptions to Filing, earlier.
Failure to file information required
of Category 3 filers. Any person
that fails to properly report a
contribution to a foreign partnership
that is required to be reported under
section 6038B and the regulations
under that section is subject to a
penalty equal to 10% of the fair
market value (FMV) of the property at
the time of the contribution. This
penalty is subject to a $100,000 limit,
unless the failure is due to intentional
disregard. In addition, the transferor
must recognize gain on the
contribution as if the contributed
property had been sold for its FMV.
See section 6038B for the exception
due to reasonable cause.
Failure to file information required
of Category 4 filers. Any person
who fails to properly report all the
information requested by section
6046A is subject to a $10,000 penalty,
in addition to the section 7203
criminal penalty, unless it is shown
that such failure is due to reasonable
cause. If the failure continues for more
than 90 days after the IRS mails
notice of the failure, an additional
$10,000 penalty will apply for each
30-day period (or fraction thereof)
during which the failure continues
after the 90-day period has expired.
The additional penalty shall not
exceed $50,000.
Treaty-based return positions. File
Form 8833, Treaty-Based Return
Position Disclosure Under Section
6114 or 7701(b), to report a return
position that a treaty of the United
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States (such as an income tax treaty,
an estate and gift tax treaty, or a
friendship, commerce, and navigation
treaty):
• Overrides or modifies any provision
of the Internal Revenue Code, and
• Causes (or potentially causes) a
reduction of any tax incurred at any
time.
Failure to make such a report may
result in a $1,000 penalty ($10,000 in
the case of a C corporation). See
section 6712.
Section 6662(j). Penalties may be
imposed for underpayment
attributable to undisclosed foreign
financial asset understatements. The
term “undisclosed foreign financial
asset” with respect to any tax year
includes any asset with respect to
which required information was not
provided. An "undisclosed foreign
financial asset understatement"
means for any tax year, the portion of
the understatement for that tax year
which is attributable to any transaction
involving an undisclosed foreign
financial asset. No penalty will be
imposed with respect to any portion of
an underpayment if the taxpayer can
demonstrate that the failure to comply
was due to reasonable cause with
respect to such portion of the
underpayment and the taxpayer acted
in good faith with respect to such
portion of the underpayment. See
sections 6662(j) and 6664(c) for
additional information.
Failure to comply with a requirement of the gain deferral method.
Failure to comply with a requirement
of the gain deferral method, including
a failure to comply with the procedural
and reporting requirements imposed
under Regulations sections 1.721(c)-3
and 1.721(c)-6 and section 6038B,
may result in an acceleration event
under Regulations section
1.721(c)-4(b)(2) and a penalty under
section 6038B. See the specific
instructions for Schedule G and
Schedule H, later.

Corrections to Form 8865

If you file a Form 8865 that you later
determine is incomplete or incorrect,
file a corrected Form 8865 with an
amended tax return following the
instructions for the return with which
you originally filed Form 8865. Enter
“corrected” at the top of the form and

Instructions for Form 8865 (2022)

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attach a statement identifying and
explaining the changes.

Specific Instructions
Important: All information must be in
English. All amounts must be stated in
U.S. dollars.
If the information required in a
given section exceeds the space
provided within that section, attach a
separate statement(s) to provide the
remaining information, using the same
size and format as the printed forms.
Fill in all applicable lines and
schedules. All categories of filers
must complete all items on pages 1
and 2, with three exceptions.
Complete item E only if, in addition to
filing the form on your own behalf, you
are reporting information about other
Category 1 filers under the multiple
Category 1 filiers exception, or you
are reporting information about
members of your affiliated group of
corporations under the consolidated
return exception. Only Category 1 and
2 filers are required to complete item
H8. See Exceptions to Filing, earlier.
Answer items H10 and H11 only if you
are a Category 1 filer.

Tax Year

Enter in the space below the title of
Form 8865 the tax year of the foreign
partnership that ended with or within
the tax year of the person filing this
form. Category 1 or 2 filers must
report information for the tax year of
the foreign partnership that ends with
or within their tax years. A Category 3
or 4 filer must report on Schedule O or
P, respectively, transactions that
occurred during that filer's tax year
(rather than during the partnership's
tax year).

Identifying Numbers and
Addresses

Enter the identifying number of the
person filing this return. Use an
employer identification number (EIN)
to identify partnerships, corporations,
and estates or trusts. For individuals,
use a social security number (SSN) or
other identification number.
Include the suite, room, or other
unit number after the street address. If
the Post Office doesn’t deliver mail to
the street address and the U.S.
person has a P.O. box, show the box
number instead.
Instructions for Form 8865 (2022)

Foreign address. Enter the
information in the following order: city
or town, state or province, and
country. Follow the country's practice
for entering the postal code, if any.
Don’t abbreviate the country name.

Item A. Category of Filer

Check the box for each category that
describes the person filing the form. If
more than one category applies,
check all boxes that apply. See
Categories of Filers, earlier.

Item C

Enter the filer's share of nonrecourse
liabilities, partnership-level qualified
nonrecourse financing, and other
liabilities. Nonrecourse liabilities are
those liabilities of the partnership for
which no partner bears the economic
risk of loss. The extent to which a
partner bears the economic risk is
determined under the rules of
Regulations section 1.752-2.
"Qualified nonrecourse financing"
generally includes financing:
• For which no one is personally
liable for repayment;
• That is borrowed for use in an
activity of holding real property; and
• That is borrowed from a qualified
person (defined in section 49(a)(1)(D)
(iv)) or is lent or guaranteed by a
federal, state, or local government.
See section 465(b)(6) for more
information on qualified nonrecourse
financing.

Item D. Identification of
Common Parent

If the person filing the form is a
member of a consolidated group, but
not the parent, list the name, address,
and EIN of the filer's common parent.

Item E

Check the item E checkbox only if the
Form 8865 filer also files Form 8938,
Statement of Specified Foreign
Financial Assets, for the tax year and
includes this form in the total number
of Forms 8865 reported on Form
8938, Part IV, line 19. For more
information, see the Instructions for
Form 8938, generally, and in
particular, Duplicative reporting and
Part IV. Excepted Specified Foreign
Financial Assets.

Item F
Information about certain partners.
If you are reporting information about
-7-

other persons under the multiple
Category 1 filers exception, or are
reporting information about members
of your affiliated group of corporations
under the consolidated return
exception (see Exceptions to Filing,
earlier), identify each such person in
item F. List their names, addresses,
and identifying numbers. Also,
indicate whether each person is a
Category 1 filer or Category 2 filer,
and whether such person
constructively owned an interest in the
foreign partnership during the tax year
of the partnership listed at the top of
Form 8865, page 1. See Constructive
ownership, earlier.

Item G1

For the foreign partnership's address,
enter the city or town, state or
province, and the foreign country in
that order. Follow the foreign country's
practice in placing the postal code in
the address. Don’t abbreviate the
country name. If the partnership
receives its mail in care of a third party
(such as an accountant or attorney),
enter “C/O” followed by the third
party's name and street address or
P.O. box.

Item G2(a)

If the foreign partnership has an EIN,
enter it here. Don’t enter FOREIGNUS
or APPLIED FOR. If the partnership
has no EIN, item G2(b) must be
completed.

Item G2(b)

A reference ID number (defined
below) is required on item G2(b) only
in cases where no EIN was entered
on item G2(a) for the foreign
partnership. However, filers are
permitted to enter both an EIN on item
G2(a) and a reference ID number on
item G2(b). If applicable, enter the
reference ID number you have
assigned to the foreign partnership
identified on item G1.
A “reference ID number” is a
number established by or on behalf of
the U.S. person identified at the top of
page 1 of the form that is assigned to
a foreign partnership with respect to
which Form 8865 reporting is
required. These numbers are used to
uniquely identify the foreign
partnership in order to keep track of
the partnership from tax year to tax
year.

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The reference ID number must
meet the requirements below. Don’t
enter FOREIGNUS or APPLIED FOR
with respect to the reference ID
number.
Note. Because reference ID numbers
are established by or on behalf of the
U.S. person filing Form 8865, there is
no need to apply to the IRS to request
a reference ID number or for
permission to use these numbers.
Note. Generally, the reference ID
number assigned to a foreign
partnership on Form 8865 has
relevance only on Form 8865, its
schedules, and any other form that is
attached to or associated with Form
8865, and should not be used with
respect to that foreign partnership on
other IRS forms. However, the foreign
partnership's reference ID number
should also be entered on Form 8858,
Information Return of U.S. Persons
With Respect to Foreign Disregarded
Entities, if the foreign partnership is
listed as a tax owner of a foreign
disregarded entity on Form 8858. See
the instructions for Form 8858,
line 3c(2), for more information.
Requirements
The reference ID number that is
entered on item G2(b) must be
alphanumeric (defined below) and no
special characters or spaces are
permitted. The length of a given
reference ID number is limited to 50
characters.
For these purposes, the term
“alphanumeric” means the entry can
be alphabetical, numeric, or any
combination of the two.
The same reference ID number
must be used consistently from tax
year to tax year with respect to a given
foreign partnership. If for any reason a
reference ID number falls out of use
(for example, the foreign partnership
no longer exists due to disposition or
liquidation), the reference ID number
used for that foreign partnership
cannot be used again for another
foreign partnership for purposes of
Form 8865 reporting.
There are some situations that
warrant correlation of a new reference
ID number with a previous reference
ID number when assigning a new

reference ID number to a foreign
partnership. For example:
• In the case of a merger or
acquisition, a Form 8865 filer must
use a reference ID number which
correlates the previous reference ID
number with the new reference ID
number assigned to the foreign
partnership; or
• In the case of an entity
classification election that is made on
behalf of the foreign partnership on
Form 8832, Regulations section
301.6109-1(b)(2)(v) requires the
foreign partnership to have an EIN for
this election. For the first year that
Form 8865 is filed after an entity
classification election is made on
behalf of the foreign partnership on
Form 8832, the new EIN must be
entered on item G2(a) of Form 8865
and the old reference ID number must
be entered on item G2(b). In
subsequent years, the filer may
continue to enter both the EIN on item
G2(a) and the reference ID number on
item G2(b), but must enter at least the
EIN on item G2(a).
You must correlate the reference ID
numbers as follows: New reference ID
number (space) Old reference ID
number. If there is more than one old
reference ID number, you must enter
a space between each such number.
As indicated above, the length of a
given reference ID number is limited
to 50 characters and each number
must be alphanumeric and no special
characters are permitted.
Note. This correlation requirement
applies only to the first year the new
reference ID number is used.

Item G6. Principal Business
Activity Code
If the foreign partnership filed
Form 1065. Enter the business code
number (principal business activity
code) shown in item C of the Form
1065 filed by the partnership.
If the foreign partnership did not
file Form 1065. Enter the applicable
principal business activity code from
Codes for Principal Business Activity
and Principal Product or Service near
the end of these instructions. If the
information necessary to apply the
total receipts test is not available, pick
a principal business activity code
using the information you have about
the partnership.
-8-

Item G8a. Functional Currency

Enter the foreign partnership's
functional currency. See sections 985
through 989 and the regulations
thereunder. If the partnership had
more than one qualified business unit
(QBU), described in Regulations
section 1.989(a)-1(b)(2)(ii), attach a
statement identifying each QBU, its
country of operation, and its functional
currency. A QBU under Regulations
section 1.989(a)-1(b)(2)(ii) is any
separate and clearly identified unit of
a trade or business of the partnership
which maintains separate books and
records.
Hyperinflationary exception. A
partnership that has a
hyperinflationary currency as its
functional currency is subject to
special rules set forth in Regulations
section 1.985-3. Generally, under
these rules, a partnership must use
the U.S. dollar as its functional
currency.

Item G8b. Exchange Rate

When translating functional currency
to U.S. dollars, you must use the
method specified in sections 985
through 989 and the regulations
thereunder. But, regardless of the
specific method required, all
exchange rates must be reported
using a “divide-by convention”
rounded to at least four places. That
is, the exchange rate must be
reported in terms of the amount by
which the functional currency amount
must be divided in order to reflect an
equivalent amount of U.S. dollars. As
such, the exchange rate must be
reported as the units of foreign
currency that equal one U.S. dollar,
rounded to at least four places. Don’t
report the exchange rate as the
number of U.S. dollars that equal one
unit of foreign currency.
Note. You must round the result to
more than four places if failure to do
so would materially distort the
exchange rate or the equivalent
amount of U.S. dollars.

Item H2

If the foreign partnership was required
to file Form 1065 for the partnership's
tax year listed at the top of page 1 of
Form 8865, check the applicable box
and enter the Internal Revenue
Service Center where the form was or
will be filed (or enter “electronic filing”
Instructions for Form 8865 (2022)

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if the form was or will be filed
electronically). Also, check the
applicable box(es) if the foreign
partnership was required to file (for its
tax year) Form 8804, Annual Return
for Partnership Withholding Tax
(Section 1446); or (for the calendar
year ending with or within the foreign
partnership's tax year) Form 1042,
Annual Withholding Tax Return for
U.S. Source Income of Foreign
Persons.

Item H5

Section 267A disallows a deduction
for certain interest or royalty paid or
accrued in agreement with a hybrid
arrangement, to the extent that, under
the foreign tax law, there isn’t a
corresponding income inclusion
(including long-term deferral). In the
case of a filer that is a tax resident of
the United States (for example, a
domestic corporation or citizen of the
United States), report in Question H5
the total amount of interest and royalty
paid or accrued by the foreign
partnership for which your distributive
share of deductions is disallowed
under section 267A. In the case of a
filer that isn’t a tax resident of the
United States (for example, a
domestic partnership), only report in
Question H5 the portion of your
distributive share of interest and
royalty paid or accrued by the foreign
partnership for which you know, or
have reason to know, that one or
more of your owners aren’t allowed a
deduction under section 267A. For
additional information about section
267A, including the application of
section 267A in the case of payments
by a partnership, see IRS.gov/
businesses/partnerships/faqs-forform-1065-schedule-b-otherinformation-question-22.

Item H6

Answer “Yes” to item H6 if the
partnership is a section 721(c)
partnership. If the answer is “Yes,”
see the specific instructions for
Schedules G and H, relating to the
gain deferral method, and, if
applicable, Schedule O, relating to the
contribution of property during the tax
year. See Section 721(c) partnership,
earlier.

Item H8

Note. Only Category 1 and 2 filers
are required to complete item H8.

Instructions for Form 8865 (2022)

Enter the number of Forms 8858
attached to Form 8865. A disregarded
entity is an entity that is disregarded
as an entity separate from its owner
under Regulations section
301.7701-2(c)(2). The partnership is
the tax owner of the foreign
disregarded entity if it is treated as
owning the assets and liabilities of the
foreign disregarded entity for
purposes of U.S. income tax law.
If the foreign partnership is the tax
owner of a foreign disregarded entity
or operates a foreign branch and you
are a Category 1 or 2 filer of Form
8865, complete and attach Form 8858
to Form 8865. For more information,
see the Instructions for Form 8858.

Item H10. Separate Units

Note. Only Category 1 filers (or
indirect partners that are filing the
constructive ownership exception
statement) are required to answer
items H10a and H10b, if applicable.
Answer "Yes" to item H10a if the filer
is a domestic corporation and (1) the
partnership is a hybrid entity; or (2)
the filer, through its interest in the
partnership, indirectly owns an
interest in a hybrid entity or indirectly
carries on a business operation
outside the United States that, if
carried on by a U.S. person, would
constitute a foreign branch (as
defined in Regulations section
1.367(a)-6T(g)(1)). Under Regulations
section 1.1503(d)-1(b)(3), a hybrid
entity means an entity that isn’t
taxable as an association for U.S.
federal tax purposes, but is subject to
an income tax of a foreign country as
a corporation (or otherwise at the
entity level) either on its worldwide
income or on a residence basis. If the
answer to item H10a is "No," skip item
H10b.
See Regulations section
1.1503(d)-1(b)(4) for more information
on separate units, including
information on when two or more
individual separate units are
combined and treated as one
separate unit. If you answer “Yes” to
item H10b, then, for each separate
unit that has a dual consolidated loss,
attach a statement that sets forth (1)
the identity and country of operation of
the separate unit or, in the case of a
combined separate unit, the identity
and country of operation of each
individual separate unit that is treated
as part of the combined separate unit;
-9-

and (2) the amount of the dual
consolidated loss. See Regulations
section 1.1503(d)-5 for rules on
determining the amount of a dual
consolidated loss attributable to a
separate unit.

Item H11

Note. Only Category 1 filers are
required to answer item H11.
Answer “Yes” to item H11 if the
partnership meets both of the
requirements shown on the form.
Total receipts is defined as the sum of
gross receipts or sales (Schedule B,
line 1a); all other income reported on
Schedule B (lines 4 through 7);
income reported on Schedule K, lines
3a, 5, 6a, and 7; income or net gain
reported on Schedule K, lines 8, 9a,
10, and 11; and income or net gain
reported on Form 8825, Rental Real
Estate Income and Expenses of a
Partnership or an S Corporation, lines
2, 19, and 20a.

Item H12

Check the “Yes” box on line 12a if the
filer of this Form 8865 is claiming a
deduction under section 250 with
respect to foreign-derived intangible
income (FDII), and enter the amounts
requested on lines 12b, 12c, and 12d.
Enter U.S. dollar amounts on lines
12b, 12c, and 12d, translated from
functional currency at the average
exchange rate for the foreign
partnership's tax year (see section
989(b)).
The reported amounts should
provide information for transactions
between the filer of the Form 8865
and the foreign partnership. See Form
8993 and its instructions for
information on the section 250
deduction. If no deduction is being
claimed, check the “No” box.

Item H14

Answer “Yes” if at any time during the
year there were transfers between the
partnership and its partners subject to
the disclosure requirements of
Regulations section 1.707-8. For
certain transfers that are presumed to
be sales, the partnership or the
partners must comply with the
disclosure requirements in
Regulations section 1.707-8.
Generally, disclosure is required
when:
1. Certain transfers to a partner
are made within 2 years of a transfer

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of property by the partner to the
partnership;
2. Certain debt is incurred by a
partner within 2 years of the earlier of
(a) a written agreement to transfer, or
(b) a transfer of the property that
secures the debt, if the debt is treated
as a qualified liability; or
3. Transfers from a partnership to
a partner occur which are the
equivalent to those listed in (1) or (2)
above.
The disclosure must be made on
the transferor partner's return using
Form 8275, Disclosure Statement, or
on an attached statement providing
the same information. When more
than one partner transfers property to
a partnership under a plan, the
disclosure may be made by the
partnership rather than each partner.

Signature
Filer. Don’t sign Form 8865 if you are
filing it as an attachment to your
income tax return. Sign the return only
if you are filing Form 8865 separately
because you aren’t required to file a
U.S. income tax return. See When
and Where To File, earlier, for more
information.
Paid preparer. Don’t sign Form 8865
or complete the paid preparer section
at the bottom of the form if Form 8865
is filed as an attachment to an income
tax return. Sign Form 8865 and
complete the paid preparer section
only if Form 8865 is filed separately.

Schedule A. Constructive
Ownership of Partnership
Interest

All filers must complete Schedule A.
Check box a if the person filing the
return owns a direct interest in the
foreign partnership. Check box b if the
person filing the return constructively
owns an interest in the foreign
partnership. See Constructive
ownership, earlier.
Category 1 and 2 filers. Category 1
and 2 filers must list the persons (U.S.
and foreign) whose interests in the
foreign partnership they constructively
owned during the partnership tax
year.
Category 3 filers. Category 3 filers
must list the persons (U.S. and
foreign) whose interests in the foreign
partnership they constructively owned

during the filer's tax year that the
reportable transfer occurred. See
Schedule A-2. Foreign Partners of
Section 721(c) Partnership, later.

Schedule A-1. Certain
Partners of Foreign
Partnership

All Category 1 and certain Category 3
filers must complete Schedule A-1.
Any person already listed on
Schedule A isn’t required to be listed
again on Schedule A-1.
Category 1 filers. Category 1 filers
must list all U.S. persons who owned
at least a 10% direct interest in the
foreign partnership during the
partnership's tax year listed at the top
of page 1 of Form 8865.
Category 3 filers. Category 3 filers
must list:
• Each U.S. person that owned a
10% or greater direct interest in the
foreign partnership during the
Category 3 filer's tax year, and
• Any other person related to the
Category 3 filer that was a direct
partner in the foreign partnership
during that tax year.
See Regulations section
1.6038B-2(i)(4) for the definition of a
related person.
Exception. Category 3 filers who
only transferred cash and didn’t own a
10% or greater interest in the
transferee partnership after the
transfer aren’t required to complete
Schedule A-1.

Schedule A-2. Foreign
Partners of Section 721(c)
Partnership

Schedule A-2 must be completed if
(1) item H6 is answered “Yes” (that
the partnership is a section 721(c)
partnership); and (2) during the
current tax year, a gain deferral
contribution occurred, or (3) a gain
deferral contribution occurred in a
prior tax year (including before 2021)
and, during the current tax year, the
gain deferral method is applied to
section 721(c) property contributed in
the prior gain deferral contribution.
See Section 721(c) partnership, Gain
deferral contribution, and Gain
deferral method, earlier.

Country of organization. Insert the
2-letter country code for the country of
-10-

organization for any foreign partner,
other than an individual. See country
codes on IRS.gov/CountryCodes.
Check if related to U.S. transferor.
Check the box if the partner is directly
or indirectly related to the U.S.
transferor (within the meaning of
section 267(b) or 707(b)(1)) and isn’t
a U.S. person.
Percentage interest. Include the
foreign partner's percentage of
interest in the partnership's capital
and profits immediately after the gain
deferral contribution. If multiple gain
deferral contributions occurred during
the tax year, enter the percentages
immediately after the last gain deferral
contribution. See Gain deferral
contribution, earlier.

Schedule A-3. Affiliation
Schedule

All filers must complete Schedule A-3.
List on Schedule A-3 all partnerships
(foreign or domestic) in which the
foreign partnership owned a direct
interest, or a 10% indirect interest
(under the rules of section 267(c)(1)
and (5)) during the partnership tax
year listed at the top of page 1 of
Form 8865.
Category 1 filers. Only Category 1
filers must complete the ordinary
income or loss column. In that
column, report the foreign
partnership's share of ordinary income
(even if not received) or loss from
partnerships in which the foreign
partnership owns a direct interest.
The total amount of ordinary income
or loss from each partnership must
also be included on Schedule B,
line 4.

Schedule B. Income
Statement—Trade or
Business Income
Important: All Category 1 filers in
partnerships engaged in a domestic
or foreign trade or business must
complete Form 8865, Schedule B.
If the partnership is a section
721(c) partnership and the gain
deferral method is applied,
Schedule B must include any
remedial items with respect to section
721(c) property, including an
offsetting remedial item relating to
contributed section 197(f)(9) property.
Instructions for Form 8865 (2022)

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See Regulations section 1.704-3(d)
and Regulations section 1.704-3(d)(5)
(iii). The total net amount of remedial
allocations should be included on
line 7, Other income (loss). Attach a
detailed statement describing the
remedial items allocated to each
partner during the tax year with
respect to section 721(c) property.
See Regulations section 1.721(c)-3.
See Section 721(c) partnership,
Section 721(c) property, and Gain
deferral method, earlier.

Specific Instructions for
Schedule B

For specific instructions for Form
8865, Schedule B, use the
instructions for Form 1065, lines 1a
through 21 (income and deductions).
You can view or download the

TIP Instructions for Form 1065 at

IRS.gov/
ScheduleD(Form1065). Also, these
instructions can be ordered by calling
800-829-3676 (800-TAX-FORM).

Schedule D. Capital Gains
and Losses
Important: All Form 8865 Category 1
filers in partnerships having
partnership items described in the
Instructions for Schedule D (Form
1065), Capital Gains and Losses,
must complete that schedule.
You can view or download the

TIP Schedule D (Form 1065) and

the Instructions for
Schedule D (Form 1065) at IRS.gov/
ScheduleD(Form1065). Also, the form
and its instructions can be ordered by
calling 800-829-3676
(800-TAX-FORM).

Schedule G (Form 8865).
Statement of Application
of the Gain Deferral
Method Under Section
721(c)

A U.S. transferor uses Schedule G to
comply with the reporting
requirements that must be satisfied in
applying the gain deferral method. If
the gain deferral method is applied to
section 721(c) property, a U.S.
transferor must file Schedule G for the
tax year of a gain deferral
contribution, as well as for each
Instructions for Form 8865 (2022)

subsequent tax year to which the gain
deferral method is applied to section
721(c) property, even if the gain
deferral contribution with respect to
that property occurred before 2018.
See Regulations section 1.721(c)-6(b)
(2) and (3). See Gain deferral method,
Gain deferral contribution, and
Section 721(c) property, earlier.

Filing Year

Check the box for “Tax year of gain
deferral contribution” if your tax year is
a year in which a gain deferral
contribution occurred (a gain deferral
contribution year). Check the “Annual
reporting” box if a gain deferral
contribution occurred in a year prior to
the current tax year and, in the current
tax year, the gain deferral method
applies to section 721(c) property
contributed in the prior gain deferral
contribution (an annual reporting
year). If the tax year is both a gain
deferral contribution year and an
annual reporting year, both boxes
should be checked.

General Instructions

On Schedule G, information must be
provided with respect to section
721(c) property that was (i)
contributed to the partnership in a
gain deferral contribution that
occurred during the current tax year;
or (ii) contributed to the partnership in
a gain deferral contribution that
occurred during a prior tax year,
provided that the gain deferral method
is applied to the property in the
current tax year. Collectively, section
721(c) property with respect to which
information must be reported on
Schedule G is referred to as
“reportable section 721(c) properties.”
See Section 721(c) property, earlier.
In Parts I through V, information
must be provided on a
property-by-property basis. In Part I,
reportable section 721(c) properties
and accompanying information must
be listed in descending order of FMV
(measured at the time of contribution).
Thus, the reportable section 721(c)
property with the highest FMV should
be listed on line 1, the reportable
section 721(c) property with the
second highest FMV should be listed
on line 2, and so on.
In Parts II through IV, the line on
which information is provided with
respect to a reportable section 721(c)
property must correspond to the line
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on which the property is listed in Part
I. Thus, in Parts II through IV, line 1
corresponds to Part I, line 1, and line 2
corresponds to Part I, line 2, and so
on.
If there are more than four
reportable section 721(c) properties,
in Parts I through IV, attach a
statement using the same format as in
Parts I through IV, listing properties, or
information with respect to properties,
in the same manner as described in
the preceding two paragraphs. For
example, the first line on the
statement for Part I must be labeled
“5” and contain columns with the
same information as those in Part I,
and must list the reportable section
721(c) property with the fifth-highest
FMV. The statements with respect to
Parts I through IV may be combined in
a single attached statement, provided
that the format described above is
followed.
A U.S. transferor should complete
and file only one Schedule G for each
partnership. See U.S. transferor,
earlier.

Part I. Section 721(c) Property

Provide the requested information
with respect to each reportable
section 721(c) property. See General
Instructions under Schedule G above
for the order in which properties must
be listed and when an attached
statement can and must be used. If
there are more than four reportable
section 721(c) properties, enter on
line 4a the following information with
respect to the reportable section
721(c) properties listed on the
attached statement.
1. In columns 6(a) through 6(c),
provide the aggregate FMV, basis,
and built-in gain, respectively, of the
properties.
2. Check the boxes in columns 4,
5, and 7(a)–(e) if applicable to any of
the properties.

!

CAUTION

Don’t complete line 4a if there
are four or fewer reportable
section 721(c) properties.

Note. Schedule O, Transfer of
Property to a Foreign Partnership,
may need to be completed if, during
the tax year, the U.S. transferor
contributed property (including
section 721(c) property) to the
partnership. See the Schedule O
instructions, later.

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Column 4. Section 197(f)(9) property. Check the box with respect to
the reportable section 721(c) property
if the property is an intangible
described in section 197(f)(9).
Column 5. Effectively connected
income property. Check the box
with respect to the reportable section
721(c) property if (1) all distributive
shares of income and gain with
respect to the property for all direct
and indirect partners that are related
foreign persons with respect to the
U.S. transferor will be subject to
taxation as income effectively
connected with a trade or business
within the United States (under
section 871 or 882), and (2) neither
the section 721(c) partnership nor a
related foreign person that is a direct
or indirect partner in the partnership
claims benefits under an income tax
convention that would exempt the
income or gain from tax or reduce the
rate of taxation to which the income or
gain is subject. See Regulations
sections 1.721(c)-3(b)(1)(ii) and
1.721(c)-6(c)(1).
Column 6(a). Fair market value.
Enter the fair market value of the
reportable section 721(c) property,
measured as of the date of
contribution.
Column 6(b). Basis. Enter the
adjusted tax basis of the reportable
section 721(c) property on the date of
the contribution. See sections 1011
through 1016 for more information for
the determination of adjusted tax
basis.
Column 7. Events. Check the box
for each of columns 7(a) through 7(e)
which describes an event that
occurred during the tax year with
respect to the reportable section
721(c) property. If a box is checked
for any reportable section 721(c)
property listed, respond “Yes” on the
corresponding line in Part V of
Schedule G and complete
Schedule H. See the Part V
instructions below.

Part II. Remaining Built-in Gain,
Remedial Income, and Gain
Recognition
Provide the requested information
with respect to each reportable
section 721(c) property. See General
Instructions under Schedule G,
earlier, for the order in which

properties must be listed and when an
attached statement can and must be
used. On line 4a, provide the total
amounts in each column with respect
to all reportable section 721(c)
property, including property listed on
an attached statement.
Column (a). Remaining built-in
gain at beginning of tax year. With
respect to a reportable section 721(c)
property, enter the amount of
remaining built-in gain at the
beginning of the tax year. If the
property was contributed in the
current tax year, enter the property’s
built-in gain on the date of the
contribution (Part I, column 6(c)).
Column (b). Remaining built-in
gain at end of tax year. With
respect to a reportable section 721(c)
property, enter the amount of
remaining built-in gain at the end of
the tax year, figured under the gain
deferral method.
Column (c). Remedial income allocated to the U.S. transferor. With
respect to a reportable section 721(c)
property, enter the remedial income
allocated to the U.S. transferor under
the remedial allocation method. When
the gain deferral method applies to a
section 721(c) property, the
partnership must use the remedial
allocation method described in
Regulations section 1.704-3(d) with
respect to the property. See
Regulations section 1.721(c)-3(b)(1)
(i)(A).
Column (d). Gain recognized due
to acceleration event. With respect
to a reportable section 721(c)
property, enter the amount of built-in
gain taken into account by reason of
an acceleration event or partial
acceleration event. See Regulations
sections 1.721(c)-4 and 1.721(c)-5 for
events constituting an acceleration
event or partial acceleration event and
for the consequences of such events.
Column (e). Gain recognized due
to section 367 transfer. With
respect to a reportable section 721(c)
property, enter the amount of gain
recognized by the U.S. transferor
pursuant to Regulations section
1.721(c)-5(e) (regarding transfers,
including indirect transfers, described
in section 367 of section 721(c)
property to a foreign corporation).
Gain recognized under section 367
should not be included in column 5.
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Instead, column 5 should list only the
amount of gain recognized pursuant
to Regulations section 1.721(c)-5(e)
(requiring the U.S. transferor to
recognize an amount of gain equal to
the remaining built-in gain (if any) that
would have been allocated to the U.S.
transferor if the partnership had sold
the remaining portion of the property
immediately before the transfer for
FMV).

Part III. Allocation Percentages
of Partnership Items With
Respect to Section 721(c)
Property

For each reportable section 721(c)
property, enter the percentage of
income, gain, deduction, and loss
allocated to the U.S. transferor,
related domestic partners, and related
foreign partners. See General
Instructions under Schedule G,
earlier, for the order in which
properties must be listed and when an
attached statement can and must be
used. See section 267(b) or 707(b)(1)
for rules on determining related
partners, and see Regulations section
1.721(c)-3(c) for a rule requiring that
the partnership apply the consistent
allocation method when the gain
deferral method applies.

Part IV. Allocation of Items to
U.S. Transferor With Respect to
Section 721(c) Property

For each reportable section 721(c)
property, enter the amount (both book
and tax) of income, gain, deduction,
and loss allocated to the U.S.
transferor under the gain deferral
method. See General Instructions
under Schedule G, earlier, for the
order in which properties must be
listed and when an attached
statement can and must be used. In
addition, a description of any tax item
or regulatory allocation with respect to
a reportable section 721(c) property
that is allocated to the U.S. transferor
must be included in Part VI,
Supplemental Information.

Part V. Additional Information

Part V provides questions relating to
whether certain events have occurred
in the current tax year with respect to
one or more reportable section 721(c)
properties and information relating to
treaty benefits. Such events include:
• Acceleration events (see
Regulations section 1.721(c)-4),
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• Partial acceleration events (see
Regulations section 1.721(c)-5(d)),
• Termination events (see
Regulations section 1.721(c)-5(b)),
• Successor events involving a
successor partnership or U.S.
transferor (see Regulations section
1.721(c)-5(c)),
• Taxable disposition of a portion of
an interest in a partnership (see
Regulations section 1.721(c)-5(f)),
and
• Direct or indirect transfer of section
721(c) property to a foreign
corporation subject to section 367
(see Regulations section
1.721(c)-5(e)).
Lines 1 through 6b. If the answer is
“Yes” to any of the questions on lines
1 through 6b of Part V, also complete
and attach Schedule H (Form 8865).
See the separate instructions later for
Schedule H. In addition, the
corresponding checkboxes in Part I,
columns 7(a) through 7(e), should be
marked, as applicable.
Line 7a. If the answer is “Yes,” attach
to Form 8865 a copy of the waiver of
treaty benefits with respect to the
reportable section 721(c) property.
See Regulations sections
1.721(c)-6(b)(2)(iii) and 1.721(c)-6(c).

Part VI. Supplemental
Information
Information to be reported. When
providing any information in Part VI,
indicate the Part, Part column, and
line for which the information is
provided.
Additional Part rows. If an attached
statement is used in Parts I through
IV, include the statement “Additional
Section 721(c) Property statement(s)
is/are attached” in the area provided
in Part VI.
Other information. Use the
Supplemental Information section to
provide any additional information
required by Regulations section
1.721(c)-6 that isn’t captured in Parts I
through IV above.

Instructions for Form 8865 (2022)

Schedule H (Form 8865).
Acceleration Events and
Exceptions Reporting
Relating to Gain Deferral
Method Under Section
721(c)

If the gain deferral method is being
applied to reportable section 721(c)
property, complete and file
Schedule H to report certain events
related to the section 721(c) property.
See Regulations sections 1.721(c)-4
and -5 for more information. Complete
a separate Schedule H for each
partnership.
General instructions. Complete all
Parts of Schedule H that correspond
to the box or boxes checked in
Schedule G, Part I, column 7, and the
related line on Part V checked “Yes.”
If additional lines are needed to report
the information required in Parts I
through V, attach a statement in the
same format as the format used in the
Part, in Part VI, Supplemental
Information. See Section 721(c)
property, earlier.
For Parts I–III and V, enter in
column (a) the line number for the
section 721(c) property from
Schedule G, Part I. If the impacted
section 721(c) property is listed on an
attached statement to Schedule G,
Part I, enter the line number from the
attached statement on which that
property was identified.

Part I. Acceleration Event
Acceleration event. An acceleration
event is any event that either would
reduce the amount of the remaining
built-in gain that a U.S. transferor
would have recognized under the gain
deferral method if the event had not
occurred or could defer the
recognition of the remaining built-in
gain. Acceleration events are
applicable on a property-by-property
basis. An acceleration event includes
the transfer of section 721(c) property
by making a contribution of the
property itself to another partnership
or the contribution of an interest in a
section 721(c) partnership to another
partnership. When an acceleration
event occurs with respect to a section
721(c) property, the U.S. transferor
must recognize gain in an amount
equal to remaining built-in gain in the
property that would have been
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allocated to the U.S. transferor if the
section 721(c) partnership had sold
the section 721(c) property
immediately before the acceleration
event for FMV. Following the event,
the gain deferral method no longer
applies to that section 721(c)
property. See Regulations section
1.721(c)-4 for rules relating to
acceleration events.
At any time, a U.S. transferor may
affirmatively treat an acceleration
event as having occurred (a deemed
acceleration event) with respect to a
section 721(c) property by both
recognizing the remaining built-in gain
in that section 721(c) property and
satisfying the reporting requirements
of the acceleration event. See
Regulations section 1.721(c)-4(b)(4).
Column (b). Provide a description of
the acceleration event, including the
citation in the case of a partial or
deemed acceleration event. See
Regulations section 1.721(c)-6(b)(3)
(iv). Use Part VI, Supplemental
Information, if additional space is
needed to describe the transaction.
Column (d). Enter the amount of the
gain recognized by the U.S. transferor
with respect to the section 721(c)
property resulting from the
acceleration event.
Column (e). Enter the amount that
the section 721(c) partnership will
increase its basis in the section 721(c)
property as a result of the acceleration
event. See Regulations sections
1.721(c)-4(c)(2) and 1.721(c)-5(d) in
the case of a partial acceleration
event.
Column (f). Check the box if there is
a partial acceleration event and the
U.S. transferor recognizes a partial
gain with respect to the section 721(c)
property. Certain distributions of other
partnership property to a partner that
result in an adjustment under section
734 to the section 721(c) property
constitute a partial acceleration event
requiring that the U.S. transferor
recognize gain. If there is a remaining
built-in gain in the section 721(c)
property immediately after the partial
acceleration event, the gain deferral
method must continue to apply and
the U.S. transferor is required to
continue to report the information on
Schedule G with respect to that
property. See Regulations section
1.721(c)-5(d).

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Part II. Termination Event

A termination event causes the gain
deferral method to no longer apply
with respect to the affected section
721(c) property on a
property-by-property basis.
Regulations section 1.721(c)-5(b)
identifies the termination events.

Column (b). Provide a description of
the termination event, including the
citation to the relevant paragraph in
Regulations section 1.721(c)-5(b).
See Regulations section 1.721(c)-6(b)
(3)(v). Use Part VI, Supplemental
Information, if additional space is
needed to describe the transaction.

Part III. Successor Event

A successor event allows for the
continued application of the gain
deferral method with respect to the
affected section 721(c) property on a
property-by-property basis by a
successor U.S. transferor or a
successor section 721(c) partnership.
However, if the successor doesn’t
continue the gain deferral method, the
event is an acceleration event and
must be reported in Part I above.
Successor events are applicable on a
property-by-property basis. If only a
portion of an interest in a partnership
is transferred in a successor event,
the rules of Regulations section
1.704-3(a)(7) are applied to determine
the remaining built-in gain in the
section 721(c) property that is
attributable to the portion of the
interest that is transferred and the
portion that is retained. Regulations
section 1.721(c)-5(c) identifies the
successor events, including special
rules for transactions involving tiered
partnerships.

If more than one successor event
occurs in the tax year, provide the
required information for each event
separately in Part IV in chronological
date order.
Column (b). Provide a description of
the successor event, including the
citation to the relevant paragraph in
Regulations section 1.721(c)-5(c).
See Regulations section 1.721(c)-6(b)
(3)(v). Use Part VI, Supplemental
Information, if additional space is
needed to describe the transaction.
Column (d). Enter the identifying
information of the relevant successor,
as applicable. In certain successor
events, a domestic corporation
becomes the successor U.S.

transferor. In other successor events,
a partnership becomes the successor
section 721(c) partnership. A
successor section 721(c) partnership
may be a new, upper-tier, or lower-tier
partnership. The identifying
information must include the name,
address, and U.S. taxpayer
identification number (TIN), if any, of
the successor U.S. transferor or
successor section 721(c) partnership.

Part IV. Taxable Disposition of
a Portion of an Interest in
Partnership Event

Part IV reports the information relating
to a fully taxable disposition of a
portion of an interest in a section
721(c) partnership. Complete this Part
if a U.S. transferor or a partnership in
which a U.S. transferor is a direct or
indirect partner disposes of (directly or
indirectly through one or more
partnerships) a portion of an interest
in a section 721(c) partnership in a
transaction in which the gain or loss, if
any, is recognized. This will not be an
acceleration event with respect to the
portion of the interest transferred. The
gain deferral method will continue to
apply with respect to the section
721(c) property of the section 721(c)
partnership. The rules of Regulations
section 1.704-3(a)(7) are applied to
determine the remaining built-in gain
in the section 721(c) property on a
property-by-property basis that is
attributable to the portion of the
interest in the section 721(c)
partnership is retained. See
Regulations section 1.721(c)-5(f).
Column (a). Provide a description of
the disposition of the interest in the
partnership, including whether the
interest was a direct or indirect
interest (through one or more
partnerships). If more than one
taxable disposition event occurs in the
tax year, provide the required
information for each event separately
in Part IV in chronological date order.
If additional space is needed, provide
the information in Part VI,
Supplemental Information.
Column (c). Enter the percentage of
partnership interest that was disposed
of in the event to which all gain or
loss, if any, is recognized.
Column (d). Enter the percentage of
the partnership interest (directly or
indirectly through one or more
-14-

partnerships) that the U.S. transferor
retained immediately after the event.
Column (e). Enter the aggregate
amount of the remaining built-in gain
with respect to all of the section
721(c) properties that is attributable to
the portion of the interest in the
section 721(c) partnership that is
retained. Attach a detailed supporting
schedule to Schedule H that
separately states each remaining
section 721(c) property and its
respective remaining built-in gain
allocable to the U.S. transferor
included in the aggregate amount
reported in column (e).

Part V. Section 367 Transfer
Event

Part V reports the information relating
to a transfer described in section 367
of section 721(c) property to a foreign
corporation. See Regulations section
1.721(c)-5(e). Section 367 events
include:
• Transfer of section 721(c) property
by a section 721(c) partnership to a
foreign corporation, or
• Transfer by a U.S. transferor or a
partnership in which a U.S. transferor
is a direct or indirect partner transfers
(directly or indirectly through one or
more partnerships) all or a portion of
the section 721(c) partnership that
owns section 721(c) property to a
foreign corporation.
As a result of the section 367
event, the section 721(c) property is
no longer subject to the gain deferral
method. The U.S. transferor is treated
as transferring the section 721(c)
property to a foreign corporation and
is subject to taxation on the transfer
under section 367. See the section
367 regulations for rules relating to
gain or income recognition under
section 367.
Note. A transfer of property to a
foreign corporation by a U.S.
transferor is subject to other reporting
requirements under sections 367,
351, 368, and 6038B (for example,
the filing of Form 926), as applicable.
See the related regulations under
these Code sections. Such reporting
requirements are in addition to the
filing of Schedule H.
After considering the tax
consequences under section 367, the
remaining built-in gain, if any, with
respect to the section 721(c) property
is recognized by the U.S. transferor to
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the extent that would have been
allocated to the U.S. transferor had
the section 721(c) partnership sold
that portion of the property
immediately before the transfer for
FMV.
Column (b). Provide a description of
the section 367 transfer, including
whether the transfer was a direct or
indirect transfer (through one or more
partnerships) of section 721(c)
property to a foreign corporation. If
more than one section 367 transfer
occurs in the tax year, provide the
required information for each transfer
separately in Part IV in chronological
date order. If additional space is
needed, provide the information in
Part VI, Supplemental Information.
Column (d). Enter the amount of the
remaining portion of built-in gain
recognized by the U.S. transferor
under section 721(c). The amount of
gain equals the remaining portion of
the built-in gain that would have been
allocated to the U.S. transferor if the
section 721(c) partnership had sold
that portion of the section 721(c)
property immediately before the
transfer for FMV. This amount should
not include any gain or income
recognized by the U.S. transferor
pursuant to section 367 that is
reported elsewhere on the return. See
Regulations section 1.721(c)-5(e).
After the section 367 transfer, the
transferred section 721(c) property
will no longer be subject to the gain
deferral method.
Column (e). Enter the identifying
information of the foreign transferee
corporation that received the section
721(c) property in the section 367
transfer. The identifying information
includes the name, address, and
U.S.TIN, if any.

Part VI. Supplemental
Information
Information to be reported. When
providing any information in the
Supplemental Information, indicate
the Part, Part column, row, and line for
which the information is provided.
Additional Part rows. If additional
rows are needed to enter information
in Parts I through V in the
Supplemental Information, provide the
information in an attachment or
attachments to Schedule H in the
same format as required for the row
Instructions for Form 8865 (2022)

on the Part at issue. If separate
supplemental schedules are used for
any Part of Schedule H for specific
section 721(c) properties, use the
same corresponding identification line
number from the Part I of Schedule G
for such property on the supplemental
schedule for Schedule H.
Other information. Use the
Supplemental Information section to
provide any additional information
required by Regulations section
1.721(c)-6 that isn’t reported in Parts I
through V above.

Schedules K, Partners'
Distributive Share Items,
and K-1 (Form 8865),
Partner’s Share of Income,
Deductions, Credits, etc.
Schedule K

Form 8865, Schedule K, is a summary
schedule of all of the partners' shares
of the partnership income, credits,
deductions, etc. Only Category 1 filers
must complete Form 8865,
Schedule K.

Schedule K-1

Schedule K-1 (Form 8865) is used to
report a specific partner's share of the
partnership income, deductions,
credits, etc.
All Category 1 and 2 filers must
complete Schedule K-1 (Form 8865)
for any direct interest they hold in the
partnership. A Category 1 or 2 filer
that doesn’t own a direct interest is
not required to complete
Schedule K-1 (Form 8865).
Category 1 filers must also
complete Schedule K-1 (Form 8865)
for each U.S. person that directly
owns a 10% or greater direct interest
in the partnership.
Provide the partner's beginning and
year-end percentage interests in
partnership profits, losses, capital, or
deductions. These percentages
should include any interest
constructively owned by the filer.
Complete boxes 1 through 21 for
any direct interest that the partner
owns in the partnership.
Example. Partner A owns a 45%
direct interest in a foreign partnership
(FPS). Partner A also owns 100% of
the stock of a domestic corporation
(DC), which owns a 10% direct
-15-

interest in FPS. Therefore, Partner A
is considered to own a 55% interest in
FPS and is thus a Category 1 filer.
When Partner A completes
Schedule K-1 (Form 8865) for itself,
Partner A must report the distributive
share of items allocated to Partner A's
direct interest of 45% but not any
items allocated to DC's 10% interest.
When Partner A completes
Schedule K-1 (Form 8865) for DC
(which Partner A must do because DC
owns a direct 10% interest), Partner A
must report on DC's Schedule K-1
(Form 8865) only items allocated to
DC's direct 10% interest.
Although the partnership isn’t
subject to income tax, the partners are
liable for tax on their shares of the
partnership income, whether or not
distributed, and must include their
share of such items on their tax
returns.
Allocations of income, gains,
losses, deductions, or credits among
the partners should generally be
made according to the partnership
agreement. See section 704 and the
regulations thereunder.
Schedule K-1 (Form 8865) for related foreign partners. If the gain
deferral method is applied and a
section 721(c) partnership doesn’t
have a filing obligation under section
6031, the U.S. transferor must obtain
a Schedule K-1 (Form 8865) for each
direct or indirect partner that is related
to the U.S. transferor (within the
meaning of section 267(b) or 707(b)
(1)) and that isn’t a U.S. person
(related foreign partner). See
Regulations section 1.721(c)-6(c)(3).
The Schedule K-1 (Form 8865) for
each related foreign partner must be
filed and attached to the Form 8865
as part of the annual reporting relating
to the gain deferral method pursuant
to Regulations section 1.721(c)-6(b)
(3)(xi). The instructions that apply to
Schedule K-1 (Form 8865) for all
other partners also apply to a
Schedule K-1 (Form 8865) for a
related foreign partner. See Gain
deferral method, Section 721(c)
partnership, and U.S. transferor,
earlier.
General Reporting Instructions
for Schedule K-1 (Form 8865)
On each Schedule K-1 (Form 8865),
enter the information about the

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partnership and the partner in Parts I
and II (items A through F). For
Schedule K-1 (Form 8865), items E
and F, see the instructions for the
corresponding Schedule K-1 (Form
1065), items J and L, in the
Instructions for Form 1065 under
Specific Instructions (Schedule K-1
only). In Part III, enter the partner's
distributive share of each item of
income, deduction, and credit and any
other information the partner needs to
prepare the partner's tax return.

Item A2

Enter the reference ID number used
on Form 8865, item G2(b). For details,
see the instructions for Item G2(b),
earlier.
Part III—line 1. If the gain deferral
method is applied to which the section
721(c) partnership adopts the
remedial allocation method, the
amounts reflected on each partner's
Schedule K-1 for the allocations of
income, gains, losses, deductions, or
credits allocated to such partner must
include any allocations of remedial
items with respect to section 721(c)
property. See Regulations section
1.721(c)-3(c).
For example, if the partner is the
U.S. transferor of section 721(c)
property, Part III, line 1, would include
any remedial income allocated to the
U.S. transferor from Schedule G, Part
II, column (c), Remedial income
allocated to U.S. transferor, as
applicable. For partners other than the
transferor, Part III, line 1, would
include their share of ordinary
business income (or loss) after taking
into account any remedial items to
such partner relating to section 721(c)
property. However, Part III, line 1,
would not include basis adjustments
attributable to section 197(f)(9) for
related foreign partners. See
Regulations section 1.704-3(d)(5)(iii)
and Regulations section 1.721(c)-3.
See Section 721(c) partnership,
Section 721(c) property, and Gain
deferral method, earlier.
Codes. In box 11 and boxes 13
through 21, identify each item by
entering a code in the column to the
left of the dollar amount entry space.
These codes are identified in List of
Codes Used for Schedule K-1 (Form
8865), later. For Box 11—Code G.
Other income (loss), see Other

income (loss) (code I) in the
Instructions for Form 1065.

Instructions for Schedule K-1 (Form
1065).

Attached statements. When
attaching statements to Schedule K-1
to report additional information to the
partner, indicate there is a statement
for the following.
• If an amount can be input on
Schedule K-1 but additional
information is required, enter an
asterisk (*) after the code in the
column to the left of the entry space.
• For items that can't be reported as
a single dollar amount, enter the code
and an asterisk (*) in the column to
the left and enter “STMT” in the right
column to indicate that the information
is provided on an attached statement.
• If the partnership has more coded
items than the number of entry boxes
(for example, boxes 11 and 13
through 15, or boxes 17 through 21),
don't enter a code or dollar amount in
the last entry box. Instead, enter an
asterisk (*) in the left column and
enter “STMT” in the entry space to the
right.
More than one attached statement
can be placed on the same sheet of
paper. The information included in the
statement should be identified in
alphanumeric order by box number
followed by the letter code (if any),
description, and dollar amount for
each item. For example: “Box 13,
code J—Work opportunity
credit—$1,000.” This can be followed
with any additional information the
partner needs to determine the proper
tax treatment of the item.

Line 16. If the partnership had items
of international tax relevance, see the
Instructions for Schedules K-2 and
K-3 (Form 8865) to determine if you
need to check the box and attach
Schedules K-2 and K-3.

Specific Instructions for
Schedules K and K-1

For the specific instructions for Form
8865, Schedule K, and Schedule K-1
(Form 8865), see the Instructions for
Form 1065.
If the partnership is a section
721(c) partnership, box 20 (code
AH—Other information) of
Schedule K-1, Part III, must include
the amounts relating to any remedial
items made under the remedial
allocation method (described in
Regulations section 1.704-3(d) and
Regulations section 1.704-3(d)(5)(iii))
with respect to section 721(c)
property. For the specific partner's
information relating to the remedial
method allocations and gain deferral
method, see the Instructions for Form
1065, especially the Partner's
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Schedules K-2 (Form
8865), Partners’
Distributive Share
Items—International, and
K-3 (Form 8865), Partner’s
Share of Income,
Deductions, Credits,
etc.—International
Schedule K-2

Schedule K-2 (Form 8865) is an
extension of Schedule K of the Form
8865 and is used to report items of
international tax relevance from the
operation of a partnership.

Schedule K-3

Schedule K-3 (Form 8865) is an
extension of Schedule K-1 (Form
8865) and is generally used to report
the partner’s share of the items
reported on Schedule K-2. The
information reported on Schedule K-3
is used to report information on a
partner’s tax or information returns.
For more information, see the
Instructions for Schedules K-2 and
K-3 (Form 8865).

Schedule L. Balance
Sheets per Books

The balance sheets should agree with
the partnership's books and records.
Attach a statement explaining any
differences.
Only Category 1 filers are required
to complete Form 8865, Schedule L.
If you answered "Yes" to item H11
on page 1 of Form 8865, you do not
have to complete Form 8865,
Schedule L.
Schedule L requires balance
sheets prepared and translated into
U.S. dollars in accordance with U.S.
generally accepted accounting
principles (GAAP).
Exception. Generally, if the
partnership or any QBU of the
partnership uses the dollar
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approximate separate transactions
method (DASTM), Form 8865,
Schedule L, should reflect the tax
balance sheets prepared and
translated into U.S. dollars according
to Regulations section 1.985-3(d).

Only Category 1 filers are required
to complete Form 8865,
Schedule M-1. If you answered "Yes"
to item H11 on page 1 of Form 8865,
you don’t have to complete Form
8865, Schedule M-1.

Specific Instructions for
Schedule L

Specific Instructions for
Schedule M-1

For the specific instructions for Form
8865, Schedule L, see the
Instructions for Form 1065.

For the specific instructions for
Schedule M-1 (Form 8865), see the
Instructions for Form 1065.

Schedule M. Balance
Sheets for Interest
Allocation

Schedule M-2. Analysis of
Partners' Capital Accounts

All Category 1 filers must complete
Form 8865, Schedule M, and it should
reflect the book values of the
partnership's assets, as described in
Temporary Regulations sections
1.861-9T(g)(2) and 1.861-12T. Assets
should be characterized as U.S.
assets or foreign assets in one or
more separate limitation categories as
provided in Temporary Regulations
sections 1.861-9T(g)(3) and
1.861-12T. The balance sheets
should be prepared in U.S. dollars
under Temporary Regulations section
1.861-9T(g)(2)(ii).
Exception. If the partnership or
any QBU of the partnership uses
DASTM, Form 8865, Schedule M,
should reflect the tax balance sheet
prepared in U.S. dollars under
Regulations section 1.985-3(d). See
Temporary Regulations section
1.861-9T(g)(2)(ii)(A)(2) for more
information on DASTM.
Line 2. Enter the partnership's
foreign assets according to the
separate categories of income.
See the instructions for
Schedule K-2 and Schedule K-3
(Form 8865), Part III, Section 2;
section 904(d); and Regulations
section 1.904-4(m) for more
information.

Schedule M-1.
Reconciliation of Income
(Loss) per Books With
Income (Loss) per Return

Form 8865 filers aren’t required to
complete Schedule M-3 (Form 1065),
Net Income (Loss) Reconciliation for
Certain Partnerships.

Instructions for Form 8865 (2022)

Only Category 1 filers are required to
complete Form 8865, Schedule M-2.
If you answered "Yes" to item H11 on
page 1 of Form 8865, you don’t have
to complete Form 8865,
Schedule M-2.

Specific Instructions for
Schedule M-2

For the specific instructions for Form
8865, Schedule M-2, see the
Instructions for Form 1065.

Schedule N. Transactions
Between Controlled
Foreign Partnership and
Partners or Other Related
Entities

All Category 1 filers must complete
Schedule N and report all transactions
of the foreign partnership during the
tax year of the partnership listed on
the top of Form 8865, page 1. A
Category 1 filer filing a Form 8865 for
other Category 1 filers under the
multiple Category 1 filers exception
must complete a Schedule N for itself
and a separate Schedule N for each
Category 1 filer not filing Form 8865.
Category 2 filers are required to
complete columns (a), (b), and (c) of
Schedule N. Category 2 filers don’t
have to complete column (d).
Column (a). Use column (a) to report
transactions between the foreign
partnership and the person filing the
Form 8865.
Column (d). Use column (d) to report
transactions between the foreign
partnership and any U.S. person with
a 10% or more direct interest in the
foreign partnership. If such person
also qualifies under column (b), don’t
report transactions between the
foreign partnership and that person
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under column (d). Report the
transactions only under column (b).
Lines 6 and 16. Enter distributions
received from other partnerships and
distributions from the foreign
partnership for which this form is
being completed.
Lines 20 and 21. Enter the largest
outstanding balances during the tax
year of gross amounts borrowed from,
and gross amounts lent to, the related
parties described in columns (a)
through (d). Don’t enter aggregate
cash flows, year-end loan balances,
average balances, or net balances.
Don’t include open account balances
resulting from sales and purchases
reported under other items listed on
Schedule N that arise and are
collected in full in the ordinary course
of business.

Schedule O (Form 8865).
Transfer
of Property to a
Foreign Partnership
Category 3 filers must complete
Schedule O.

Section 721(c) partnerships.
Regulations section 1.721(c)-2
overrides section 721(a)
nonrecognition of gain upon a
contribution of section 721(c) property
to a section 721(c) partnership
occurring on or after August 6, 2015.
A U.S. transferor must recognize gain
unless the gain deferral method
described in Regulations section
1.721(c)-3 is applied. To satisfy the
reporting requirements of the gain
deferral method, the U.S. transferor is
required to report certain information
for the year of the contribution and for
subsequent years. See Regulations
section 1.721(c)-6. See Section
721(c) property, Section 721(c)
partnership, U.S. transferor, and Gain
deferral method, earlier.
Reference ID number. Use the
reference ID number shown on Form
8865, item G2(b). For details, see the
instructions for Item G2(b), earlier.

Part I. Transfers Reportable
Under Section 6038B

Part I is used to report the transfer of
property to a foreign partnership.
Provide the information required in
columns (a) through (g) with respect
to each contribution of property to the

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foreign partnership that must be
reported. If you contributed property
with an FMV greater than its tax basis
(appreciated property), or intangible
property, provide the information
required in columns (a) through (g)
separately with respect to each item
of property transferred (except to the
extent you are allowed to aggregate
the property under Regulations
sections 1.704-3(e)(2), (3), and (4)).
Provide a general description of
each item of property in the
Supplemental Information Required
To Be Reported section. For all other
property contributed, aggregate by
the categories listed in Part I.
Column (a). Enter the date of the
transfer. If the transfer was composed
of a series of transactions over
multiple dates, enter the date the
transfer was completed.
Column (b). Enter the description of
the property transferred.
Column (c). Enter the FMV of the
property contributed (measured as of
the date of the transfer).
Column (d). Enter your adjusted
basis in the property contributed on
the date of the transfer. See sections
1011 through 1016 for more
information on the determination of
adjusted basis.
Column (f). If you contributed
appreciated property, enter the
method (traditional, traditional with
curative allocations, or remedial) used
by the partnership to make section
704(c) allocations with respect to
each item of property. See
Regulations sections 1.704-3(b), (c),
and (d) for more information on these
allocation methods. If the gain deferral
method is applied, the remedial
method must generally be used. See
Regulations section 1.721(c)-3(b)(1)
(i). For an exception for certain
property generating effectively
connected income, see Regulations
section 1.721(c)-3(b)(1)(ii).
Column (g). Enter the amount of
gain, if any, recognized on the
transfer. See sections 721(b) and
904(f)(3), and Regulations section
1.721(c)-2.
Line 3. Enter your capital interests,
by percentage, in the partnership
immediately before and after the
transfer. To the extent your capital
interest in the partnership immediately

before the transfer differs from any of
your profit, loss, or deduction interests
in the partnership at that time, enter in
the supplemental information below
your interests, by percentage, in the
profit, loss, and deductions at that
time. To the extent your capital
interest in the partnership immediately
after the transfer differs from any of
your profit, loss, or deduction interests
in the partnership at that time, enter in
the supplemental information below
your interests, by percentage, in the
profit, loss, and deductions at that
time.
Supplemental information required
to be reported. Enter any
information from Part I that is required
to be reported in greater detail.
Identify the applicable column number
next to the information entered in this
section. In addition, if you contributed
property to a foreign partnership as
part of a wider transaction, briefly
describe the entire transaction.
Reporting required for the year
of contribution to which the gain
deferral method is applied.
Additionally, describe any section
721(c) property contributed to a
section 721(c) partnership and
identify whether the gain deferral
method is applied. A U.S. transferor
must attach to Form 8865, for the year
of contribution, Schedule G,
containing the information described
in Regulations section 1.721(c)-6(b)
(2)(i). See Regulations section
1.721(c)-6(b) for additional
requirements.
Additional form and statement
requirements. In addition to the
reporting requirements above, the
following statements and forms must
also be filed to satisfy the
requirements for the gain deferral
method.
• Schedule H (Form 8865), if certain
events have occurred.
• Form 8838-P, Consent To Extend
the Time To Assess Tax Pursuant to
the Gain Deferral Method (Section
721(c)). See Regulations sections
1.721(c)-6(b)(2)(ii), (b)(3)(viii), and (b)
(5) for more information.
• Copy of “Statement of Waiver of
Treaty Benefits under Section
1.721(c)-6,” if applicable. See
Regulations section 1.721(c)-6(c)(1).

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Annual Reporting With Respect
to the Gain Deferral Method
A U.S. transferor subject to the gain
deferral method must annually attach
Schedule G (Form 8865), containing
the information required in
Regulations section 1.721(c)-6(b)(3)
(i) through (vii) (and (b)(3)(ix), as
applicable). See Regulations section
1.721(c)-6(b)(3) for further annual
reporting requirements pursuant to
the gain deferral method.

Part II. Dispositions Reportable
Under Section 6038B

Use Part II to report certain
dispositions by a foreign partnership.
If you were required to report a
transfer of appreciated property to the
partnership, and the partnership
disposes of the property while you are
still a direct or constructive partner,
you must report that disposition in Part
II. If the partnership disposes of the
property in a nonrecognition
transaction and receives in exchange
substituted basis property, report the
subsequent disposition of the
substituted basis property in the same
manner as provided for the
contributed property. See section
7701(a)(42) for the definition of
substituted basis property and
Regulations section 1.704-3(a)(8) for
more information.
A disposition by a partnership may
be an acceleration event for purposes
of applying the gain deferral method.
The U.S. transferor may be required
to recognize gain in an amount equal
to the remaining built-in gain on the
section 721(c) property previously
contributed to the section 721(c)
partnership. See Regulations section
1.721(c)-4. For acceleration event
exceptions, see Regulations section
1.721(c)-5. Acceleration events and
exceptions to an acceleration event
should be reflected in Part II. In
addition, Schedules G and H are
required to be filed.
Column (a). Provide a brief
description of the property disposed
of by the partnership. If you are
reporting the disposition of substituted
basis property received by the
partnership in a nonrecognition
transaction in exchange for
appreciated property contributed by
you, enter “See Attached” and attach
a statement providing brief
descriptions of both the property
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contributed by you to the partnership
and the substituted basis property
received by the partnership in
exchange for that property.
Column (b). Enter the date that you
transferred this property to the
partnership. If you are reporting the
disposition of substituted basis
property received by the partnership
in a nonrecognition transaction in
exchange for property previously
contributed by you, enter “See
Attached” and attach a statement
showing both the date you transferred
the appreciated property to the
partnership and the date the
partnership exchanged the property
for substituted basis property in a
nonrecognition transaction. See
Regulations section 1.6038B-2.
Column (c). Enter the date that the
partnership disposed of the property.
Column (d). Briefly describe how the
partnership disposed of the property
(for example, by sale or exchange).
Column (e). Enter the amount of
gain, if any, recognized by the
partnership on the disposition of
property.
Column (f). Enter the amount of
depreciation recapture, if any,
recognized by the partnership on the
disposition of property. See
Regulations sections 1.1245-1(e) and
1.1250-1(f).
Column (g). Enter the amount of
gain from column (e) allocated to you.
Column (h). Enter the amount of
depreciation recapture from column
(f) allocated to you. See Regulations
sections 1.1245-1(e) and 1.1250-1(f).
If you recognize any section 1254
recapture on the partnership's
disposition of natural resource
recapture property, enter “See
Attached” and attach a statement
figuring the amount of recapture. See
Regulations section 1.1254-5.

Part III. Gain Recognition Under
Section 904(f)(3) or (f)(5)(F)
If gain recognition was required with
respect to any transfer reported in
Part I under section 904(f)(3) or (f)(5)
(F), attach a statement identifying the
transfer and the amount of gain
recognized.

Schedule P (Form 8865).
Acquisitions, Dispositions,
and Changes of Interests
in a Foreign Partnership

Use Schedule P to report the
acquisition, disposition, and change of
interest in a foreign partnership.

Every Category 4 filer must
complete Schedule P, unless they
qualify under the exception for certain
Category 4 filers, described earlier.
Reference ID number. Use the
reference ID number shown on Form
8865, item G2(b). For details, see the
instructions for Item G2(b), earlier.

Part I. Acquisitions

Part I is completed by Category 4
filers required to report an acquisition
of an interest in a foreign partnership.
See Categories of Filers, earlier, for
more details about which types of
acquisitions must be reported.
An acquisition of a section 721(c)
partnership interest may be an
acceleration event exception under
the gain deferral method. In such
case, Schedule H is required to be
filed. See Regulations section
1.721(c)-5. In this case, the acquirer
may become a successor U.S.
transferor and may have a reporting
requirement under Regulations
section 1.721(c)-6. As a result, the
successor U.S. transferor is required
to file Schedule G as well as, if certain
events occur, Schedule H. See
Section 721(c) partnership, Gain
deferral method, and U.S. transferor,
earlier.
Column (a). If you acquired the
interest in the foreign partnership by
purchase, gift, or inheritance, or in a
distribution from a trust, estate,
partnership, or corporation, enter the
name, address, and identifying
number (if any) of the person from
whom you acquired the interest.
Column (b). Enter the date of the
acquisition. If the acquisition was
composed of a series of transactions
over multiple dates, enter the date the
acquisition was completed.
Column (c). Enter the FMV of the
interest you acquired in the
partnership (measured as of the date
of acquisition).
Column (d). Enter your basis in the
acquired partnership interest

Instructions for Form 8865 (2022)

-19-

(measured as of the date of
acquisition). See sections 722 and
742.
Columns (e) and (f). Enter your total
direct percentage interest in the
partnership both before and
immediately after the acquisition. To
the extent your direct percentage
interest in the partnership differs
among capital, profits, losses, or
deductions, enter “See Below” and
state the different percentages in Part
IV.

Part II. Dispositions

This section is completed by U.S.
persons who are Category 4 filers
because they disposed of an interest
in a foreign partnership. See
Categories of Filers, earlier, for more
details about what types of
dispositions must be reported. For
each disposition reported in Part II,
indicate in Part IV whether a
statement is required by Regulations
section 1.751-1(a)(3) to be filed with
respect to the disposition.
A disposition of a section 721(c)
partnership interest may be an
acceleration event for purposes of
applying the gain deferral method.
The U.S. transferor may be required
to recognize gain in an amount equal
to the remaining built-in gain on the
section 721(c) property previously
contributed to the section 721(c)
partnership. In this case, Schedule H
must also be filed. See Regulations
section 1.721(c)-4. For acceleration
event exceptions, see Regulations
section 1.721(c)-5.

Column (a). Unless you disposed of
the interest by withdrawing, in whole
or in part, from the partnership, enter
the name, address, and identifying
number (if any) of the person to whom
you transferred the interest in the
foreign partnership.
Column (b). Enter the date of the
disposition. If the disposition was
composed of a series of transactions
over multiple dates, enter the date the
disposition was completed.
Column (c). Enter the FMV of the
interest you disposed of in the
partnership (measured as of the date
of disposition). If you recognized gain
or loss on the disposition, state the
amount of gain or loss in Part IV. See
section 741.

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Column (d). Enter your adjusted
basis in the partnership interest
disposed of immediately before the
disposition. See section 705.

changed. See Categories of Filers,
earlier, for more details about which
changes in proportional interest must
be reported.

Columns (e) and (f). Enter your total
direct percentage interest in the
partnership both before and
immediately after the disposition. To
the extent your percentage interest in
the partnership differs among capital,
profits, losses, or deductions, enter
“See Below” and state the different
percentages in Part IV.

Column (b). Enter the date of the
change. If the change resulted from a
series of transactions over multiple
dates, enter the date the change was
completed.

Part III. Change in
Proportional Interest

This section is completed by U.S.
persons who are Category 4 filers
because their direct proportional
interest in the foreign partnership

Columns (e) and (f). Enter your
direct percentage interest in the
partnership both before and
immediately after the change. To the
extent your percentage interest in the
partnership differs among capital,
profits, losses, or deductions, enter
“See Below” and state the different
percentages in Part IV.

Column (a). Briefly describe the
event that caused your interest in the
partnership to change (for example,
the admission of a new partner).

Part IV. Supplemental
Information Required
To Be Reported

Column (c). Enter the FMV of your
interest in the partnership immediately
before the change.
Column (d). Enter your basis in your
partnership interest immediately
before the change.

Enter any information asked for in Part
I, Part II, or Part III that must be
reported in detail. Identify the
applicable part number and column
next to the information entered in Part
IV.

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

39 hr., 30 min.
13 hr., 52 min.
7 hr., 53 min.
12 hr., 12 min.
170 hr., 16 min.
171 hr., 13 min.
16 hr., 15 min.
5 hr., 44 min.

6 hr., 47 min.
3 hr., 34 min.
2 hr., 17 min.
7 hr., 31 min.
34 hr., 28 min.
35 hr., 33 min.
5 hr., 10 min.
1 hr., 12 min.

Preparing, copying, assembling,
and sending the form to the IRS

8865
Schedule G (Form 8865)
Schedule H (Form 8865)
Schedule K-1 (Form 8865)
Schedule K-2 (Form 8865)
Schedule K-3 (Form 8865)
Schedule O (Form 8865)
Schedule P (Form 8865)

.

Recordkeeping

.

Form

14 hr., 21 min.
3 hr., 57 min.
2 hr., 30 min.
9 hr., 14 min.
50 hr., 44 min.
51 hr., 53 min.
5 hr., 39 min.
1 hr., 20 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form and
related schedules simpler, we would be happy to hear from you. You can send us comments through IRS.gov/
FormComments. Or you can send your comments to the Internal Revenue Service, Tax Forms and Publications, 1111
Constitution Ave. NW, IR-6526, Washington, DC 20224. Do not send Form 8865 to this address. Instead, see When and
Where To File, earlier.

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Instructions for Form 8865 (2022)

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List of Codes Used for Schedule K-1 (Form 8865)
Box Number / Item
1. Ordinary business income (loss). Determine whether the income (loss)
is passive or nonpassive and enter on your return as follows.

Where to report or where to find further reporting information.

Passive loss

See Partner’s Instr. (Form 1065)

Passive income

Schedule E (Form 1040), line 28, column (h)

Nonpassive loss

See Partner’s Instr. (Form 1065)

Nonpassive income

Schedule E (Form 1040), line 28, column (k)

2. Net rental real estate income (loss)

See Partner’s Instr. (Form 1065)

3. Other net rental income (loss)
Net income

Schedule E (Form 1040), line 28, column (h)

Net loss

See Partner’s Instr. (Form 1065)

4a. Guaranteed payment services

See Partner’s Instr. (Form 1065)

4b. Guaranteed payment capital

See Partner’s Instr. (Form 1065)

4c. Guaranteed payment total

See Partner’s Instr. (Form 1065)

5. Interest income

Form 1040 or 1040-SR, line 2b

6a. Ordinary dividends

Form 1040 or 1040-SR, line 3b

6b. Qualified dividends

Form 1040 or 1040-SR, line 3a

6c. Dividend equivalents

See Partner’s Instr. (Form 1065)

7. Royalties

Schedule E (Form 1040), line 4

8. Net short-term capital gain (loss)

Schedule D (Form 1040), line 5

9a. Net long-term capital gain (loss)

Schedule D (Form 1040), line 12

9b. Collectibles (28%) gain (loss)

28% Rate Gain Worksheet, line 4 (Schedule D instructions)

9c. Unrecaptured section 1250 gain

See Partner’s Instr. (Form 1065)

10. Net section 1231 gain (loss)

See Partner’s Instr. (Form 1065)

11. Other income (loss)
Code A. Other portfolio income (loss)

See Partner’s Instr. (Form 1065)

Code B. Involuntary conversions

See Partner’s Instr. (Form 1065)

Code C. Section 1256 contracts & straddles

Form 6781, line 1

Code D. Mining exploration costs recapture

See Pub. 535

Code E. Cancellation of debt

Schedule 1 (Form 1040), line 8c; or Form 982

Code F. Section 743(b) positive income adjustments

See Partner’s Instr. (Form 1065)

Code G. Other income (loss)

See Partner’s Instr. (Form 1065)

Instructions for Form 8865 (2022)

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Box Number / Item

Where to report or where to find further reporting information.

12. Section 179 deduction

See Partner’s Instr. (Form 1065)

13. Other deductions
Code A. Cash contributions (60%)

See Partner’s Instr. (Form 1065)

Code B. Cash contributions (30%)

See Partner’s Instr. (Form 1065)

Code C. Noncash contributions (50%)

See Partner’s Instr. (Form 1065)

Code D. Noncash contributions (30%)

See Partner’s Instr. (Form 1065)

Code E. Capital gain property to a 50% organization (30%)

See Partner’s Instr. (Form 1065)

Code F. Capital gain property (20%)

See Partner’s Instr. (Form 1065)

Code G. Contributions (100%)

See Partner’s Instr. (Form 1065)

Code H. Investment interest expense

Form 4952, line 1

Code I. Deductions—royalty income

Schedule E (Form 1040), line 19

Code J. Section 59(e)(2) expenditures

See Partner’s Instr. (Form 1065)

Code K. Excess business interest expense

See Partner’s Instr. (Form 1065)

Code L. Deductions—portfolio (other)

Schedule A (Form 1040), line 16

Code M. Amounts paid for medical insurance

Schedule A (Form 1040), line 1; or Schedule 1 (Form 1040), line 17

Code N. Educational assistance benefits

See Partner’s Instr. (Form 1065)

Code O. Dependent care benefits

Form 2441, line 12

Code P. Preproductive period expenses

See Partner’s Instr. (Form 1065)

Code Q. Reserved for future use
Code R. Pensions and IRAs

See Partner’s Instr. (Form 1065)

Code S. Reforestation expense deduction

See Partner’s Instr. (Form 1065)

Codes T through U

Reserved for future use

Code V. Section 743(b) negative income adjustments

See Partner’s Instr. (Form 1065)

Code W. Other deductions

See Partner’s Instr. (Form 1065)

14. Self-employment earnings (loss)
Note. If you have a section 179 deduction or any partner-level
deductions, see the Partner’s Instr. (Form 1065) before completing
Schedule SE (Form 1040).
Code A. Net earnings (loss) from self-employment

Schedule SE, Section A or B

Code B. Gross farming or fishing income

See Partner’s Instr. (Form 1065)

Code C. Gross non-farm income

See Partner’s Instr. (Form 1065)

15. Credits
Code A. Reserved for future use
Code B. Reserved for future use
Code C. Low-income housing credit (section 42(j)(5)) from
post-2007 buildings

See Partner’s Instr. (Form 1065)

Code D. Low-income housing credit (other) from post-2007 buildings See Partner’s Instr. (Form 1065)
Code E. Qualified rehabilitation expenditures (rental real estate)

See Partner’s Instr. (Form 1065)

Code F. Other rental real estate credits

See Partner’s Instr. (Form 1065)

Code G. Other rental credits

See Partner’s Instr. (Form 1065)

Code H. Undistributed capital gains credit

See Partner’s Instr. (Form 1065)

Code I. Biofuel producer credit

See Partner’s Instr. (Form 1065)

Code J. Work opportunity credit

See Partner’s Instr. (Form 1065)

Code K. Disabled access credit

See Partner’s Instr. (Form 1065)

Code L. Empowerment zone employment credit

See Partner’s Instr. (Form 1065)

Code M. Credit for increasing research activities

See Partner’s Instr. (Form 1065)

Code N. Credit for employer social security and Medicare taxes

See Partner’s Instr. (Form 1065)

Code O. Backup withholding

See Partner’s Instr. (Form 1065)

Code P. Other credits

See Partner’s Instr. (Form 1065)

17. Alternative minimum tax (AMT) items
Code A. Post-1986 depreciation adjustment

See Partner’s Instr. (Form 1065) and the Instructions for Form 6251

Code B. Adjusted gain or loss

See Partner’s Instr. (Form 1065) and the Instructions for Form 6251

Code C. Depletion (other than oil & gas)

See Partner’s Instr. (Form 1065) and the Instructions for Form 6251

Code D. Oil, gas, and geothermal—gross income

See Partner’s Instr. (Form 1065) and the Instructions for Form 6251

Code E. Oil, gas, and geothermal—deductions

See Partner’s Instr. (Form 1065) and the Instructions for Form 6251

Code F. Other AMT items

See Partner’s Instr. (Form 1065) and the Instructions for Form 6251

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Box Number / Item

Where to report or where to find further reporting information.

18. Tax-exempt income and nondeductible expenses
Code A. Tax-exempt interest income

Form 1040, line 2a

Code B. Other tax-exempt income

See Partner’s Instr. (Form 1065)

Code C. Nondeductible expenses

See Partner’s Instr. (Form 1065)

19. Distributions
Code A. Cash and marketable securities

See Partner’s Instr. (Form 1065)

Code B. Distribution subject to section 737

See Partner’s Instr. (Form 1065)

Code C. Other property

See Partner’s Instr. (Form 1065)

20. Other information
Code A. Investment income

Form 4952, line 4a

Code B. Investment expenses

Form 4952, line 5

Code C. Fuel tax credit information

Form 4136

Code D. Qualified rehabilitation expenditures (other than rental real
estate)

See Partner’s Instr. (Form 1065)

Code E. Basis of energy property

See Partner’s Instr. (Form 1065)

Codes F through G. Recapture of low-income housing credit

See Partner’s Instr. (Form 1065)

Code H. Recapture of investment credit

See Form 4255

Code I. Recapture of other credits

See Partner’s Instr. (Form 1065)

Code J. Look-back interest—completed long-term contracts

See Form 8697

Code K. Look-back interest—income forecast method

See Form 8866

Code L. Dispositions of property with section 179 deductions

See Partner’s Instr. (Form 1065)

Code M. Recapture of section 179 deduction

See Partner’s Instr. (Form 1065)

Code N. Business interest expense (information item)

See Partner’s Instr. (Form 1065)

Code O. Section 453(I)(3) information

See Partner’s Instr. (Form 1065)

Code P. Section 453A(c) information
Code Q. Section 1260(b) information
Code R. Interest allocable to production expenditures
Code S. Capital construction fund (CCF) nonqualified withdrawals
Code T. Depletion information — oil and gas
Code U. Section 743(b) basis adjustment
Code V. Unrelated business taxable income
Code X. Reserved for future use
Code Y. Net investment income
Code Z. Section 199A information

See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)
See Partner’s Instr. (Form 1065)

Code AA. Section 704(c) information

See Partner’s Instr. (Form 1065)

Code AB. Section 751 gain (loss)

See Partner’s Instr. (Form 1065)

Code AC. Section 1(h)(5) gain (loss)

See Partner’s Instr. (Form 1065)

Code AD. Deemed section 1250 unrecaptured gain

See Partner’s Instr. (Form 1065)

Code AE. Excess taxable income

See Partner’s Instr. (Form 1065)

Code AF. Excess business interest income

See Partner’s Instr. (Form 1065)

Code AG. Gross receipts for section 448(c) (information item)

See Partner’s Instr. (Form 1065)

Code AH. Other information

See Partner’s Instr. (Form 1065)

Instructions for Form 8865 (2022)

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Codes for Principal Business
Activity and Principal Product or
Service
This list of Principal Business Activities and their
associated codes is designed to classify an
enterprise by the type of activity in which it is
engaged to facilitate the administration of the
Internal Revenue Code. These Principal Business
Activity Codes are based on the North American
Industry Classification System.

Agriculture, Forestry, Fishing,
and Hunting

Crop Production
111100 Oilseed & Grain Farming
111210 Vegetable & Melon Farming
(including potatoes & yams)
111300 Fruit & Tree Nut Farming
111400 Greenhouse, Nursery, &
Floriculture Production
111900 Other Crop Farming
(including tobacco, cotton,
sugarcane, hay, peanut,
sugar beet, & all other crop
farming)
Animal Production
112111 Beef Cattle Ranching &
Farming
112112 Cattle Feedlots
112120 Dairy Cattle & Milk Production
112210 Hog & Pig Farming
112300 Poultry & Egg Production
112400 Sheep & Goat Farming
112510 Aquaculture (including
shellfish & finfish farms &
hatcheries)
112900 Other Animal Production
Forestry and Logging
113110 Timber Tract Operations
113210 Forest Nurseries & Gathering
of Forest Products
113310 Logging
Fishing, Hunting, and Trapping
114110 Fishing
114210 Hunting & Trapping
Support Activities for Agriculture
and Forestry
115110 Support Activities for Crop
Production (including cotton
ginning, soil preparation,
planting, & cultivating)
115210 Support Activities for Animal
Production (including
Farriers)
115310 Support Activities for Forestry

Mining
211120
211130
212110
212200
212310
212320

Crude Petroleum Extraction
Natural Gas Extraction
Coal Mining
Metal Ore Mining
Stone Mining & Quarrying
Sand, Gravel, Clay, &
Ceramic & Refractory
Minerals Mining & Quarrying
212390 Other Nonmetallic Mineral
Mining & Quarrying
213110 Support Activities for Mining

Utilities

221100 Electric Power Generation,
Transmission, & Distribution
221210 Natural Gas Distribution
221300 Water, Sewage, & Other
Systems
221500 Combination Gas & Electric

Construction

Construction of Buildings
236110 Residential Building
Construction
236200 Nonresidential Building
Construction
Heavy and Civil Engineering
Construction
237100 Utility System Construction
237210 Land Subdivision

Using the list of activities and codes below,
determine from which activity the business derives
the largest percentage of its “total receipts.” Total
receipts is defined as the sum of gross receipts or
sales (Schedule B, line 1a); all other income
reported on Schedule B, lines 4 through 7; income
reported on Schedule K, lines 3a, 5, 6a, and 7;
income or net gain reported on Schedule K, lines
8, 9a, 10, and 11; and income or net gain reported
on Form 8825, lines 2, 19, and 20a. If the business
purchases raw materials and supplies them to a

237310 Highway, Street, & Bridge
Construction
237990 Other Heavy & Civil
Engineering Construction
Specialty Trade Contractors
238100 Foundation, Structure, &
Building Exterior Contractors
(including framing carpentry,
masonry, glass, roofing, &
siding)
238210 Electrical Contractors
238220 Plumbing, Heating, &
Air-Conditioning Contractors
238290 Other Building Equipment
Contractors
238300 Building Finishing
Contractors (including
drywall, insulation, painting,
wallcovering, flooring, tile, &
finish carpentry)
238900 Other Specialty Trade
Contractors (including site
preparation)

Manufacturing

Food Manufacturing
311110 Animal Food Mfg
311200 Grain & Oilseed Milling
311300 Sugar & Confectionery
Product Mfg
311400 Fruit & Vegetable Preserving
& Specialty Food Mfg
311500 Dairy Product Mfg
311610 Animal Slaughtering and
Processing
311710 Seafood Product Preparation
& Packaging
311800 Bakeries, Tortilla & Dry Pasta
Mfg
311900 Other Food Mfg (including
coffee, tea, flavorings, &
seasonings)
Beverage and Tobacco Product
Manufacturing
312110 Soft Drink & Ice Mfg
312120 Breweries
312130 Wineries
312140 Distilleries
312200 Tobacco Manufacturing
Textile Mills and Textile Product
Mills
313000 Textile Mills
314000 Textile Product Mills
Apparel Manufacturing
315100 Apparel Knitting Mills
315210 Cut & Sew Apparel
Contractors
315250 Cut & Sew Apparel Mfg
(except Contractors)
315990 Apparel Accessories & Other
Apparel Mfg
Leather and Allied Product
Manufacturing
316110 Leather & Hide Tanning &
Finishing
316210 Footwear Mfg (including
rubber & plastics)
316990 Other Leather & Allied
Product Mfg
Wood Product Manufacturing
321110 Sawmills & Wood
Preservation
321210 Veneer, Plywood, &
Engineered Wood Product
Mfg
321900 Other Wood Product Mfg

subcontractor to produce the finished product, but
retains title to the product, the business is
considered a manufacturer and must use one of
the manufacturing codes (311110–339900).
Once the Principal Business Activity is
determined, enter the six-digit code from the list
below on page 1, item H7. Also enter a brief
description of the business activity in item H8.

Paper Manufacturing
322100 Pulp, Paper, & Paperboard
Mills
322200 Converted Paper Product Mfg
Printing and Related Support
Activities
323100 Printing & Related Support
Activities
Petroleum and Coal Products
Manufacturing
324110 Petroleum Refineries
(including integrated)
324120 Asphalt Paving, Roofing, &
Saturated Materials Mfg
324190 Other Petroleum & Coal
Products Mfg
Chemical Manufacturing
325100 Basic Chemical Mfg
325200 Resin, Synthetic Rubber, &
Artificial & Synthetic Fibers &
Filaments Mfg
325300 Pesticide, Fertilizer, & Other
Agricultural Chemical Mfg
325410 Pharmaceutical & Medicine
Mfg
325500 Paint, Coating, & Adhesive
Mfg
325600 Soap, Cleaning Compound, &
Toilet Preparation Mfg
325900 Other Chemical Product &
Preparation Mfg
Plastics and Rubber Products
Manufacturing
326100 Plastics Product Mfg
326200 Rubber Product Mfg
Nonmetallic Mineral Product
Manufacturing
327100 Clay Product & Refractory
Mfg
327210 Glass & Glass Product Mfg
327300 Cement & Concrete Product
Mfg
327400 Lime & Gypsum Product Mfg
327900 Other Nonmetallic Mineral
Product Mfg
Primary Metal Manufacturing
331110 Iron & Steel Mills & Ferroalloy
Mfg
331200 Steel Product Mfg From
Purchased Steel
331310 Alumina & Aluminum
Production & Processing
331400 Nonferrous Metal (except
Aluminum) Production &
Processing
331500 Foundries
Fabricated Metal Product
Manufacturing
332110 Forging & Stamping
332210 Cutlery & Handtool Mfg
332300 Architectural & Structural
Metals Mfg
332400 Boiler, Tank, & Shipping
Container Mfg
332510 Hardware Mfg
332610 Spring & Wire Product Mfg
332700 Machine Shops; Turned
Product; & Screw, Nut, & Bolt
Mfg
332810 Coating, Engraving, Heat
Treating, & Allied Activities
332900 Other Fabricated Metal
Product Mfg
Machinery Manufacturing
333100 Agriculture, Construction, &
Mining Machinery Mfg

-24-

333200 Industrial Machinery Mfg
333310 Commercial & Service
Industry Machinery Mfg
333410 Ventilation, Heating,
Air-Conditioning, &
Commercial Refrigeration
Equipment Mfg
333510 Metalworking Machinery Mfg
333610 Engine, Turbine & Power
Transmission Equipment Mfg
333900 Other General Purpose
Machinery Mfg
Computer and Electronic Product
Manufacturing
334110 Computer & Peripheral
Equipment Mfg
334200 Communications Equipment
Mfg
334310 Audio & Video Equipment
Mfg
334410 Semiconductor & Other
Electronic Component Mfg
334500 Navigational, Measuring,
Electromedical, & Control
Instruments Mfg
334610 Manufacturing & Reproducing
Magnetic & Optical Media
Electrical Equipment, Appliance,
and Component Manufacturing
335100 Electric Lighting Equipment
Mfg
335200 Household Appliance Mfg
335310 Electrical Equipment Mfg
335900 Other Electrical Equipment &
Component Mfg
Transportation Equipment
Manufacturing
336100 Motor Vehicle Mfg
336210 Motor Vehicle Body & Trailer
Mfg
336300 Motor Vehicle Parts Mfg
336410 Aerospace Product & Parts
Mfg
336510 Railroad Rolling Stock Mfg
336610 Ship & Boat Building
336990 Other Transportation
Equipment Mfg
Furniture and Related Product
Manufacturing
337000 Furniture & Related Product
Manufacturing
Miscellaneous Manufacturing
339110 Medical Equipment &
Supplies Mfg
339900 Other Miscellaneous
Manufacturing

Wholesale Trade

Merchant Wholesalers, Durable
Goods
423100 Motor Vehicle & Motor
Vehicle Parts & Supplies
423200 Furniture & Home Furnishings
423300 Lumber & Other Construction
Materials
423400 Professional & Commercial
Equipment & Supplies
423500 Metal & Mineral (except
Petroleum)
423600 Household Appliances &
Electrical & Electronic Goods
423700 Hardware, & Plumbing &
Heating Equipment &
Supplies
423800 Machinery, Equipment, &
Supplies

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Codes for Principal Business Activity and Principal Product or Service (Continued)
423910 Sporting & Recreational
Goods & Supplies
423920 Toy & Hobby Goods &
Supplies
423930 Recyclable Materials
423940 Jewelry, Watch, Precious
Stone, & Precious Metals
423990 Other Miscellaneous Durable
Goods
Merchant Wholesalers, Nondurable
Goods
424100 Paper & Paper Products
424210 Drugs & Druggists' Sundries
424300 Apparel, Piece Goods, &
Notions
424400 Grocery & Related Products
424500 Farm Product Raw Materials
424600 Chemical & Allied Products
424700 Petroleum & Petroleum
Products
424800 Beer, Wine, & Distilled
Alcoholic Beverages
424910 Farm Supplies
424920 Book, Periodical, &
Newspapers
424930 Flower, Nursery Stock, &
Florists' Supplies
424940 Tobacco Products &
Electronic Cigarettes
424950 Paint, Varnish, & Supplies
424990 Other Miscellaneous
Nondurable Goods
Wholesale Trade Agents & Agents
and Brokers
425120 Wholesale Trade Agents &
Brokers

Retail Trade

Motor Vehicle and Parts Dealers
441110 New Car Dealers
441120 Used Car Dealers
441210 Recreational Vehicle Dealers
441222 Boat Dealers
441227 Motorcycle, ATV, & All Other
Motor Vehicle Dealers
441300 Automotive Parts,
Accessories, & Tire Retailers
Building Material and Garden
Equipment and Supplies Dealers
444110 Home Centers
444120 Paint & Wallpaper Stores
444140 Hardware Retailers
444180 Other Building Material
Dealers
444200 Lawn & Garden Equipment &
Supplies Retailers
Food and Beverage Retailers
445110 Supermarkets and Other
Grocery (except
Convenience) Retailers
445131 Convenience Retailers
445132 Vending Machine Operators
445230 Fruit & Vegetable Retailers
445240 Meat Retailers
445250 Fish & Seafood Retailers
445291 Baked Goods Retailers
445292 Confectionery & Nut Retailers
445298 All Other Specialty Food
Retailers
445320 Beer, Wine, & Liquor
Retailers
Furniture and Home Furnishings
Retailers
449110 Furniture Retailers
449121 Floor Covering Retailers
449122 Window Treatment Retailers
449129 All Other Home Furnishings
Retailers
Electronics and Appliance Retailers
449210 Electronics & Appliance
Retailers (including
computers)
General Merchandise Retailers
455110 Department Stores

455210 Warehouse Clubs,
Supercenters, & Other Merch
Retailers
Health and Personal Care Retailers
456110 Pharmacies & Drug Retailers
456120 Cosmetics, Beauty Supplies,
& Perfume Retailers
456130 Optical Goods Retailers
446190 Other Health & Personal Care
Retailers
Gasoline Stations & Fuel Dealers
457100 Gasoline Stations (including
convenience stores with gas)
457210 Fuel Dealers (including
Heating Oil & Liquefied
Petroleum)
Clothing & Accessories Retailers
458110 Clothing & Clothing
Accessories Retailers
458210 Shoe Retailers
458310 Jewelry Retailers
458320 Luggage & Leather Goods
Retailers
Sporting, Hobby, Book, Musical
Instrument, & Miscellaneous
Retailers
459110 Sporting Goods Retailers
459120 Hobby, Toy, & Game
Retailers
459130 Sewing, Needlework, & Piece
Goods Retailers
459140 Musical Instrument &
Supplies Retailers
459210 Book Retailers & News
Dealers (including
newsstands)
459310 Florists
459410 Office Supplies & Stationery
Retailers
459420 Gift, Novelty, & Souvenir
Retailers
459510 Used Merchandise Retailers
459910 Pet & Pet Supplies Retailers
459920 Art Dealers
459930 Manufactured (Mobile) Home
Dealers
459990 All Other Miscellaneous
Retailers (including tobacco,
candle, & trophy retailers)
Nonstore Retailers
Nonstore retailers sell all
types of merchandise using
such methods as Internet,
mail-order catalogs,
interactive television, or direct
sales. These types of
Retailers should select the
PBA associated with their
primary line of products sold.
For example, establishments
primarily selling prescription
and non-prescription drugs,
select PBA code 456110
Pharmacies & Drug Retailers.

Transportation and
Warehousing

Air, Rail, and Water Transportation
481000 Air Transportation
482110 Rail Transportation
483000 Water Transportation
Truck Transportation
484110 General Freight Trucking,
Local
484120 General Freight Trucking,
Long-Distance
484200 Specialized Freight Trucking
Transit and Ground Passenger
Transportation
485110 Urban Transit Systems
485210 Interurban & Rural Bus
Transportation
485310 Taxi Service
485320 Limousine Service
485410 School & Employee Bus
Transportation
485510 Charter Bus Industry

485990 Other Transit & Ground
Passenger Transportation
Pipeline Transportation
486000 Pipeline Transportation
Scenic & Sightseeing
Transportation
487000 Scenic & Sightseeing
Transportation
Support Activities for
Transportation
488100 Support Activities for Air
Transportation
488210 Support Activities for Rail
Transportation
488300 Support Activities for Water
Transportation
488410 Motor Vehicle Towing
488490 Other Support Activities for
Road Transportation
488510 Freight Transportation
Arrangement
488990 Other Support Activities for
Transportation
Couriers and Messengers
492110 Couriers & Express Delivery
Services
492210 Local Messengers & Local
Delivery
Warehousing and Storage
493100 Warehousing & Storage
(except lessors of
mini-warehouses &
self-storage units)

Information

Motion Picture and Sound
Recording Industries
512100 Motion Picture & Video
Industries (except video
rental)
512200 Sound Recording Industries
Publishing Industries
513110 Newspaper Publishers
513120 Periodical Publishers
513130 Book Publishers
513140 Directory & Mailing List
Publishers
513190 Other Publishers
513210 Software Publishers
Broadcasting & Content Providers
& Telecommunications
516100 Radio & Television
Broadcasting Stations
516210 Media Streaming, Social
Networks, & Other Content
Providers
517000 Telecommunications
(including Wired, Wireless,
Satellite, Cable & Other
Program Distribution,
Resellers, Agents, Other
Telecommunications, &
Internet Service Providers)
Data Processing, Web Search
Portals, & Other Information
Services
518210 Computing Infrastructure
Providers, Data Processing,
Web Hosting, & Related
Services
519200 Web Search Portals,
Libraries, Archives, & Other
Info. Services

Finance and Insurance

Depository Credit Intermediation
522110 Commercial Banking
522130 Credit Unions
522180 Savings Institutions & Other
Depository Credit
Intermediation
Nondepository Credit
Intermediation
522210 Credit Card Issuing
522220 Sales Financing
522291 Consumer Lending
522292 Real Estate Credit (including
mortgage bankers &
originators)

-25-

522299 Intl, Secondary Market, &
Other Nondepo. Credit
Intermediation
Activities Related to Credit
Intermediation
522300 Activities Related to Credit
Intermediation (including loan
brokers, check clearing, &
money transmitting)
Securities, Commodity Contracts,
and Other Financial Investments
and Related Activities
523150 Investment Banking &
Securities Intermediation
523160 Commodity Contracts
Intermediation
523210 Securities & Commodity
Exchanges
523900 Other Financial Investment
Activities (including portfolio
management & investment
advice)
Insurance Carriers and Related
Activities
524110 Direct Life, Health, & Medical
Insurance Carriers
524120 Direct Insurance (except Life,
Health, & Medical) Carriers
524210 Insurance Agencies &
Brokerages
524290 Other Insurance Related
Activities (including
third-party administration of
insurance and pension funds)
Funds, Trusts, and Other Financial
Vehicles
525100 Insurance & Employee
Benefit Funds
525910 Open-End Investment Funds
(Form 1120-RIC,)
525920 Trusts, Estates, & Agency
Accounts
525990 Other Financial Vehicles
(including mortgage REITs
and closed-end investment
funds)
“Offices of Bank Holding Companies”
and “Offices of Other Holding
Companies” are located under
Management of Companies
(Holding Companies) below.

Real Estate and Rental and
Leasing

Real Estate
531110 Lessors of Residential
Buildings & Dwellings
(including equity REITs)
531120 Lessors of Nonresidential
Buildings (except
Mini-Warehouses) (including
equity REITs)
531130 Lessors of Mini-Warehouses
& Self-Storage Units
(including equity REITs)
531190 Lessors of Other Real Estate
Property (including equity
REITs)
531210 Offices of Real Estate Agents
& Brokers
531310 Real Estate Property
Managers
531320 Offices of Real Estate
Appraisers
531390 Other Activities Related to
Real Estate
Rental and Leasing Services
532100 Automotive Equipment Rental
& Leasing
532210 Consumer Electronics &
Appliances Rental
532281 Formal Wear & Costume
Rental
532282 Video Tape & Disc Rental
532283 Home Health Equipment
Rental
532284 Recreational Goods Rental
532289 All Other Consumer Goods
Rental
532310 General Rental Centers

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Codes for Principal Business Activity and Principal Product or Service (Continued)
532400 Commercial & Industrial
Machinery & Equipment
Rental & Leasing
Lessors of Nonfinancial Intangible
Assets (except copyrighted works)
533110 Lessors of Nonfinancial
Intangible Assets (except
copyrighted works)

Professional, Scientific, and
Technical Services

Legal Services
541110 Offices of Lawyers
541190 Other Legal Services
Accounting, Tax Preparation,
Bookkeeping, and Payroll Services
541211 Offices of Certified Public
Accountants
541213 Tax Preparation Services
541214 Payroll Services
541219 Other Accounting Services
Architectural, Engineering, and
Related Services
541310 Architectural Services
541320 Landscape Architecture
Services
541330 Engineering Services
541340 Drafting Services
541350 Building Inspection Services
541360 Geophysical Surveying &
Mapping Services
541370 Surveying & Mapping (except
Geophysical) Services
541380 Testing Laboratories &
Services
Specialized Design Services
541400 Specialized Design Services
(including interior, industrial,
graphic, & fashion design)
Computer Systems Design and
Related Services
541511 Custom Computer
Programming Services
541512 Computer Systems Design
Services
541513 Computer Facilities
Management Services
541519 Other Computer Related
Services
Other Professional, Scientific, and
Technical Services
541600 Management, Scientific, &
Technical Consulting
Services
541700 Scientific Research &
Development Services
541800 Advertising & Public
Relations, & Related Services
541910 Marketing Research & Public
Opinion Polling
541920 Photographic Services
541930 Translation & Interpretation
Services
541940 Veterinary Services
541990 All Other Professional,
Scientific, & Technical
Services

Management of Companies
(Holding Companies)

551111 Offices of Bank Holding
Companies
551112 Offices of Other Holding
Companies

Administrative and Support and
Waste Management and
Remediation Services
Administrative and Support
Services
561110 Office Administrative
Services

561210 Facilities Support Services
561300 Employment Services
561410 Document Preparation
Services
561420 Telephone Call Centers
561430 Business Service Centers
(including private mail centers
& copy shops)
561440 Collection Agencies
561450 Credit Bureaus
561490 Other Business Support
Services (including
repossession services, court
reporting, & stenotype
services)
561500 Travel Arrangement &
Reservation Services
561600 Investigation & Security
Services
561710 Exterminating & Pest Control
Services
561720 Janitorial Services
561730 Landscaping Services
561740 Carpet & Upholstery Cleaning
Services
561790 Other Services to Buildings &
Dwellings
561900 Other Support Services
(including packaging &
labeling services, &
convention & trade show
organizers)
Waste Management and
Remediation Services
562000 Waste Management &
Remediation Services

Educational Services

611000 Educational Services
(including schools, colleges,
& universities)

Health Care and Social
Assistance

Offices of Physicians and Dentists
621111 Offices of Physicians (except
mental health specialists)
621112 Offices of Physicians, Mental
Health Specialists
621210 Offices of Dentists
Offices of Other Health
Practitioners
621310 Offices of Chiropractors
621320 Offices of Optometrists
621330 Offices of Mental Health
Practitioners (except
Physicians)
621340 Offices of Physical,
Occupational & Speech
Therapists, & Audiologists
621391 Offices of Podiatrists
621399 Offices of All Other
Miscellaneous Health
Practitioners
Outpatient Care Centers
621410 Family Planning Centers
621420 Outpatient Mental Health &
Substance Abuse Centers
621491 HMO Medical Centers
621492 Kidney Dialysis Centers
621493 Freestanding Ambulatory
Surgical & Emergency
Centers
621498 All Other Outpatient Care
Centers
Medical and Diagnostic
Laboratories
621510 Medical & Diagnostic
Laboratories
Home Health Care Services
621610 Home Health Care Services

Other Ambulatory Health Care
Services
621900 Other Ambulatory Health
Care Services (including
ambulance services & blood
& organ banks)
Hospitals
622000 Hospitals
Nursing and Residential Care
Facilities
623000 Nursing & Residential Care
Facilities
Social Assistance
624100 Individual & Family Services
624200 Community Food & Housing,
& Emergency & Other Relief
Services
624310 Vocational Rehabilitation
Services
624410 Childcare Services

Arts, Entertainment, and
Recreation

Performing Arts, Spectator Sports,
and Related Industries
711100 Performing Arts Companies
711210 Spectator Sports (including
sports clubs & racetracks)
711300 Promoters of Performing Arts,
Sports, & Similar Events
711410 Agents & Managers for
Artists, Athletes, Entertainers,
& Other Public Figures
711510 Independent Artists, Writers,
& Performers
Museums, Historical Sites, and
Similar Institutions
712100 Museums, Historical Sites, &
Similar Institutions
Amusement, Gambling, and
Recreation Industries
713100 Amusement Parks & Arcades
713200 Gambling Industries
713900 Other Amusement &
Recreation Industries
(including golf courses, skiing
facilities, marinas, fitness
centers, & bowling centers)

Accommodation and Food
Services

Accommodation
721110 Hotels (except Casino Hotels)
& Motels
721120 Casino Hotels
721191 Bed & Breakfast Inns
721199 All Other Traveler
Accommodation
721210 RV (Recreational Vehicle)
Parks & Recreational Camps
721310 Rooming & Boarding Houses,
Dormitories, & Workers’
Camps
Food Services and Drinking Places
722300 Special Food Services
(including food service
contractors & caterers)
722410 Drinking Places (Alcoholic
Beverages)
722511 Full Service Restaurants
722513 Limited Service Restaurants
722514 Cafeterias, Grill Buffets,
Buffets
722515 Snack & Nonalcoholic
Beverage Bars

Other Services

Repair and Maintenance
811110 Automotive Mechanical &
Electrical Repair &
Maintenance

-26-

811120 Automotive Body, Paint,
Interior, & Glass Repair
811190 Other Automotive Repair &
Maintenance (including oil
change & lubrication shops &
car washes)
811210 Electronic & Precision
Equipment Repair &
Maintenance
811310 Commercial & Industrial
Machinery & Equipment
(except Automotive &
Electronic) Repair &
Maintenance
811410 Home & Garden Equipment &
Appliance Repair &
Maintenance
811420 Reupholstery & Furniture
Repair
811430 Footwear & Leather Goods
Repair
811490 Other Personal & Household
Goods Repair & Maintenance
Personal and Laundry Services
812111 Barber Shops
812112 Beauty Salons
812113 Nail Salons
812190 Other Personal Care Services
(including diet & weight
reducing centers)
812210 Funeral Homes & Funeral
Services
812220 Cemeteries & Crematories
812310 Coin-Operated Laundries &
Drycleaners
812320 Drycleaning & Laundry
Services (except
Coin-Operated)
812330 Linen & Uniform Supply
812910 Pet Care (except Veterinary)
Services
812920 Photofinishing
812930 Parking Lots & Garages
812990 All Other Personal Services
Religious, Grantmaking, Civic,
Professional, and Similar
Organizations
813000 Religious, Grantmaking,
Civic, Professional, & Similar
Organizations (including
condominium and
homeowners associations)

Other

999999 Unclassified Establishments
(unable to classify)

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Index
10% interest 5
50% interest 5

Exceptions to Filing 3
Constructive owners 4
Multiple Category 1 filers 3

A

F

Acquisitions 3
Analysis of partners' capital
accounts 17
Attached statements 16

B
Balance sheets per books 16

C
Categories of Filers 2
Category 1 filer 2, 8, 10
Category 2 filer 3, 8
Category 3 filer 3, 8, 10
Category 4 filer 3, 8
Change in a Proportional
Interest 6
Changes in Proportional
Interests 3
Consolidated Return 7
Constructive Ownership 5
Control of a Corporation 6
Corrections to Form 8865 6

D

Foreign Address 7
Foreign Partnership 5
Future Developments 1

G
General Instructions 1
General Reporting Instructions
for Schedule K-1 15

H
Hyperinflationary Exception 8

I
Identifying Numbers and
Addresses 7

L
List of Codes Used in
Schedule K-1 (Form
8865) 21

P

Definitions 5
Dispositions 3

Partnership 5
Penalties 6
Purpose of Form 1

E

R

Exceptions for Filing:
Category 4 filers 4

Relief for Category 1 and 2
filers 4

S
Schedule A-1. Certain partners
of Foreign Partnership 10
Schedule A-2. Foreign Partners
of Section 721(c)
Partnership 10
Schedule A-3. Affiliation
Schedule 10
Schedule A. Constructive
Ownership of Partnership
Interest 10
Schedule B. Income Statement–
Trade or Business
Income 10
Schedule D. Capital Gains and
Losses 11
Schedule G (Form 8865).
Statement of Application of
the Gain Deferral Method
Under Section 721(c) 11
Schedule H (Form 8865).
Acceleration Events and
Exceptions Reporting
Relating to Gain Deferral
Method Under Section
721(c) 13
Schedule N. Transactions
Between Controlled Foreign
Partnership and Partners or
Other Related Entities 17
Schedule O (Form 8865).
Transfer of Property to a
Foreign Partnership 17
Schedule P (Form 8865).
Acquisitions, Dispositions,
and Changes of Interests in
a Foreign Partnership 19

-27-

Schedules K-2 (Form 8865),
Partners’ Distributive Share
Items—International, and
K-3 (Form 8865), Partner’s
Share of Income,
Deductions, Credits,
etc.—International 16
Schedules K, Partners'
Distributive Share Items and
K-1 (Form 8865), Partner’s
Share of Income,
Deductions, Credits, Etc. 15
Specific Instructions 7

T
Tax Year 7
Treaty-based Return
Positions 6

U
U.S. Person 5

W
What’s New 1
When To File 5
Who Must File 1


File Typeapplication/pdf
File Title2022 Instructions for Form 8865
SubjectInstructions for Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships
AuthorW:CAR:MP:FP
File Modified2022-11-14
File Created2022-11-14

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