IRS Form 8308 "Report of a Sale or Exchange of Certain Partnership Interests"

What Is IRS Form 8308?

IRS Form 8308, Report of a Sale or Exchange of Certain Partnership Interests, is used by a partnership to report the exchange or sale by a partner of a partnership interest.

There are two parties to this report: a transferor and a transferee:

  1. The transferor is a beneficial owner of the partnership interest before the transfer of that interest. In exchange for the interest, the transferor gets money or other property relating to the unrealized receivables or inventory items. Unrealized receivables are any rights to payment for the goods delivered, the services rendered, the amount of gain that would be ordinary income in case of a sale of franchises, trademarks, and short-term obligations on the date of the exchange. Inventory items include the following: stock in trade of the partnership, an asset that is not a capital asset, and trade receivables of accrual method partnerships.
  2. The transferee is a beneficial owner of the partnership interest after the transfer of that interest. The transferee can contribute cash, assets, or services in exchange for a partnership interest. It allows them to get a percentage of ownership, and distributive shares.

Usually, Form 8308 is an attachment to Form 1065 for the tax year of the partnership that includes the last day of the calendar year in which the exchange took place. Form 1065, U.S. Return of Partnership Income, is used for reporting a tax return for income obtained through a business partnership. It calculates a partnership's profit or loss over a taxable year. If you are representing a large partnership you may also use Form 1065-B, U.S. Return of Income for Electing Large Partnerships.

IRS Form 8308 was released by the Internal Revenue Service (IRS) and the latest version was issued on September 1, 2018. An IRS Form 8308 fillable version is available for download below.

When Is Form 8308 Required?

A partnership must file Form 8308 once it has notice of an exchange. It can be received as a written notification from the transferor or having knowledge that there has been a transfer of a partnership interest, and the partnership had unrealized receivables or inventory items at the time of the transfer.

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IRS Form 8308 Instructions

Form 8308 consists of three parts.

  1. Part I. The name, address, and the identifying number of the transferor should be indicated. The transferor is required to attach a statement relating to the sale or exchange for their return.
  2. Part II. The name, the address, and an identifying number of the transferee should be indicated here.
  3. Part III. This part contains the date of sale or exchange of partnership interest.

The form should contain the signature of the partner and the date. It should be signed in different places depending on whether it is being filed separately or with Form 1065.

Where Do I Mail IRS Form 8308?

According to the Form 8308 filing requirements it should be submitted as an attachment to Form 1065 for the tax year of the partnership. But in some cases, it can be submitted also separately with the service center where Form 1065 was filed.

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Download IRS Form 8308 "Report of a Sale or Exchange of Certain Partnership Interests"

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8308
Report of a Sale or Exchange of
Form
Certain Partnership Interests
OMB No. 1545-0123
(Rev. September 2018)
Department of the Treasury
Go to www.irs.gov/Form8308 for the latest information.
Internal Revenue Service
Employer identification number
Name of partnership
Phone number
Number, street, and room or suite no. If a P.O. box, see instructions.
City or town, state or province, country, and ZIP or foreign postal code
Part I
Transferor Information (Beneficial owner of the partnership interest immediately before the transfer of that
interest)
Name
Identifying number
Number and street (including apt. no.)
City or town, state or province, country, and ZIP or foreign postal code
Notice to Transferors: The information on this form has been supplied to the Internal Revenue Service. The transferor in a section 751(a)
exchange is required to treat a portion of the gain realized from the exchange as ordinary income. For more details, see Pub. 541, Partnerships.
Statement by Transferor: The transferor in a section 751(a) exchange is required under Regulations section 1.751-1(a)(3) to attach a
statement relating to the sale or exchange to his or her return. See Instructions to Transferors for more details.
Part II
Transferee Information (Beneficial owner of the partnership interest immediately after the transfer of that
interest)
Name
Identifying number
Number and street (including apt. no.)
City or town, state or province, country, and ZIP or foreign postal code
/
/
Part III
Date of Sale or Exchange of Partnership Interest
Under penalties of perjury, I declare that I have examined this return, including accompanying attachments, and to the best of my
Sign here only if you
knowledge and belief, it is true, correct, and complete.
are filing this form by
itself and not with Form
/
/
1065
Signature of partnership representative or partner or limited liability company member
Date
General Instructions
1. The partnership receives written
When to file. Generally, file Form 8308 as
notification of the exchange from the
an attachment to Form 1065 for the tax
Section references are to the Internal
transferor that includes the names and
year of the partnership that includes the
addresses of both parties to the exchange,
last day of the calendar year in which the
Revenue Code unless otherwise noted.
the identifying numbers of the transferor
section 751(a) exchange took place. Form
Purpose of form. Form 8308 is filed by a
and (if known) of the transferee, and the
8308 is due at the time for filing the
partnership to report the sale or exchange
date of the exchange; or
partnership return, including extensions.
by a partner of all or part of a partnership
2. The partnership has knowledge that
If, however, a partnership is notified of a
interest where any money or other property
there has been a transfer of a partnership
section 751(a) exchange after it has filed
received in exchange for the interest is
interest and, at the time of the transfer, the
its partnership return, file Form 8308
attributable to unrealized receivables or
partnership had any unrealized receivables
separately, within 30 days of notification,
inventory items (that is, where there has
or inventory items.
with the service center where Form 1065
been a section 751(a) exchange).
was filed.
Who must file. A partnership must file a
No returns or statements are required
Copies of Form 8308 to be furnished to
under section 6050K if the transfer was not
separate Form 8308 for each section
a section 751(a) exchange. For example, a
transferor and transferee. All
751(a) exchange of an interest in such
transfer which in its entirety constitutes a
partnerships required to file Form 8308
partnership. See Regulations section
gift for federal income tax purposes is not
must furnish a copy of the form to each
1.6050K-1.
a section 751(a) exchange.
transferor and transferee by January 31 of
Note: Form 8308 does not have to be filed
the year following the calendar year in
A partnership may rely on a written
if, under section 6045, Form 1099-B,
which the section 751(a) exchange
statement from the transferor that the
Proceeds From Broker and Barter
occurred or, if later, 30 days after the
transfer was not a section 751(a) exchange
Exchange Transactions, is required to be
partnership has notice of the exchange.
unless the partnership has knowledge to
filed with respect to the sale or exchange.
the contrary. If a partnership is in doubt
If the partnership does not know the
A partnership must file Form 8308 once
whether partnership property constitutes
identity of the beneficial owner of an
the partnership has notice of the section
unrealized receivables or inventory items or
interest in the partnership, the record
751(a) exchange. The partnership has such
whether a transfer constitutes a section
holder of the interest is treated as the
notice when either:
751(a) exchange, the partnership may file
transferor or transferee.
Form 8308 to avoid the risk of incurring a
penalty for failure to file.
8308
Form
(Rev. 9-2018)
Cat. No. 62503I
8308
Report of a Sale or Exchange of
Form
Certain Partnership Interests
OMB No. 1545-0123
(Rev. September 2018)
Department of the Treasury
Go to www.irs.gov/Form8308 for the latest information.
Internal Revenue Service
Employer identification number
Name of partnership
Phone number
Number, street, and room or suite no. If a P.O. box, see instructions.
City or town, state or province, country, and ZIP or foreign postal code
Part I
Transferor Information (Beneficial owner of the partnership interest immediately before the transfer of that
interest)
Name
Identifying number
Number and street (including apt. no.)
City or town, state or province, country, and ZIP or foreign postal code
Notice to Transferors: The information on this form has been supplied to the Internal Revenue Service. The transferor in a section 751(a)
exchange is required to treat a portion of the gain realized from the exchange as ordinary income. For more details, see Pub. 541, Partnerships.
Statement by Transferor: The transferor in a section 751(a) exchange is required under Regulations section 1.751-1(a)(3) to attach a
statement relating to the sale or exchange to his or her return. See Instructions to Transferors for more details.
Part II
Transferee Information (Beneficial owner of the partnership interest immediately after the transfer of that
interest)
Name
Identifying number
Number and street (including apt. no.)
City or town, state or province, country, and ZIP or foreign postal code
/
/
Part III
Date of Sale or Exchange of Partnership Interest
Under penalties of perjury, I declare that I have examined this return, including accompanying attachments, and to the best of my
Sign here only if you
knowledge and belief, it is true, correct, and complete.
are filing this form by
itself and not with Form
/
/
1065
Signature of partnership representative or partner or limited liability company member
Date
General Instructions
1. The partnership receives written
When to file. Generally, file Form 8308 as
notification of the exchange from the
an attachment to Form 1065 for the tax
Section references are to the Internal
transferor that includes the names and
year of the partnership that includes the
addresses of both parties to the exchange,
last day of the calendar year in which the
Revenue Code unless otherwise noted.
the identifying numbers of the transferor
section 751(a) exchange took place. Form
Purpose of form. Form 8308 is filed by a
and (if known) of the transferee, and the
8308 is due at the time for filing the
partnership to report the sale or exchange
date of the exchange; or
partnership return, including extensions.
by a partner of all or part of a partnership
2. The partnership has knowledge that
If, however, a partnership is notified of a
interest where any money or other property
there has been a transfer of a partnership
section 751(a) exchange after it has filed
received in exchange for the interest is
interest and, at the time of the transfer, the
its partnership return, file Form 8308
attributable to unrealized receivables or
partnership had any unrealized receivables
separately, within 30 days of notification,
inventory items (that is, where there has
or inventory items.
with the service center where Form 1065
been a section 751(a) exchange).
was filed.
Who must file. A partnership must file a
No returns or statements are required
Copies of Form 8308 to be furnished to
under section 6050K if the transfer was not
separate Form 8308 for each section
a section 751(a) exchange. For example, a
transferor and transferee. All
751(a) exchange of an interest in such
transfer which in its entirety constitutes a
partnerships required to file Form 8308
partnership. See Regulations section
gift for federal income tax purposes is not
must furnish a copy of the form to each
1.6050K-1.
a section 751(a) exchange.
transferor and transferee by January 31 of
Note: Form 8308 does not have to be filed
the year following the calendar year in
A partnership may rely on a written
if, under section 6045, Form 1099-B,
which the section 751(a) exchange
statement from the transferor that the
Proceeds From Broker and Barter
occurred or, if later, 30 days after the
transfer was not a section 751(a) exchange
Exchange Transactions, is required to be
partnership has notice of the exchange.
unless the partnership has knowledge to
filed with respect to the sale or exchange.
the contrary. If a partnership is in doubt
If the partnership does not know the
A partnership must file Form 8308 once
whether partnership property constitutes
identity of the beneficial owner of an
the partnership has notice of the section
unrealized receivables or inventory items or
interest in the partnership, the record
751(a) exchange. The partnership has such
whether a transfer constitutes a section
holder of the interest is treated as the
notice when either:
751(a) exchange, the partnership may file
transferor or transferee.
Form 8308 to avoid the risk of incurring a
penalty for failure to file.
8308
Form
(Rev. 9-2018)
Cat. No. 62503I
2
Form 8308 (Rev. 9-2018)
Page
Note: The transferor of the interest is
Penalty for failure to furnish correct
• Mining property (section 617(f)(2)).
Forms 8308 to transferor and
required to notify the partnership of the
• Stock in an interest charge domestic
exchange of the partnership interest
transferee. A penalty may be imposed for
international sales corporation (section
unless, under section 6045, Form 1099-B
each failure to furnish when due a copy of
992(a)).
is required to be filed.
Form 8308 to either party to the exchange.
• Farm recapture property or farm land
The penalty may also be imposed for each
Form 8308 must generally be prepared
(section 1252(a)).
failure to give the transferor or transferee all
prior to the time it must be attached to the
required information on each Form 8308 or
• Franchises, trademarks, or trade names
partnership return and sent to the IRS. This
for furnishing incorrect information. If the
(section 1253(a)).
will allow the timely furnishing of Forms
partnership intentionally disregards the
8308 to the transferor and transferee.
• Oil, gas, or geothermal property (section
requirement to report correct information,
1254).
Instructions to Transferors
each penalty is increased. The penalty will
not apply to any failure that the
• Stock of a controlled foreign corporation
partnership can show was due to
This form alerts transferors that they are
(section 1248).
reasonable cause and not willful neglect.
required to treat a portion of the gain
• Section 1245 property.
See sections 6722 and 6724 for more
realized from a section 751(a) exchange as
• Section 1245 recovery property.
details.
ordinary income. For more details, see
Pub. 541.
Partnership address. Include the suite,
• Section 1250 property.
room, or other unit number after the street
Separate statement required by
• Market discount bonds (section 1278).
address. If the Post Office does not deliver
transferor. The transferor is required by
• Short-term governmental obligations
mail to the street address and the
Regulations section 1.751-1(a)(3) to attach
(section 1283).
partnership has a P.O. box, show the box
a statement to the transferor’s income tax
number instead.
return for the tax year of the sale or
• Other short-term obligations (section
exchange with the following information.
1283(c)).
Paperwork Reduction Act Notice. We
1. The date of the sale or exchange.
Inventory items. Inventory items are not
ask for the information on this form to
just stock in trade of the partnership. They
2. The amount of any gain or loss
carry out the Internal Revenue laws of the
also include the following.
attributable to the section 751 property.
United States. You are required to give us
• Any properties that would be included in
the information. We need it to ensure that
3. The amount of any gain or loss
inventory if on hand at the end of the tax
you are complying with these laws and to
attributable to capital gain or loss on the
year or that are held primarily for sale to
allow us to figure and collect the right
sale of the partnership interest.
customers in the normal course of
amount of tax.
Instructions to Partnerships
business.
You are not required to provide the
• Any asset that is not a capital asset or is
information requested on a form that is
Section 751(a) exchange. A section 751(a)
not treated as a capital asset.
subject to the Paperwork Reduction Act
exchange occurs when money or any
unless the form displays a valid OMB
property is exchanged for all or part of a
• Any other property held by the
control number. Books or records relating
partnership interest that is attributable to
partnership that would be considered
to a form or its instructions must be
unrealized receivables or inventory items.
inventory if held by the transferor partner.
retained as long as their contents may
Generally, any sale or exchange of a
• Any trade receivables of accrual method
become material in the administration of
partnership interest (or any portion) at a
partnerships.
any Internal Revenue law. Generally, tax
time when the partnership has any
returns and return information are
unrealized receivables or inventory items is
Tiered partnerships. In determining
confidential, as required by section 6103.
a section 751(a) exchange.
whether partnership property is an
unrealized receivable or an inventory item,
The time needed to complete and file
Unrealized receivables. Unrealized
the partnership is treated as owning its
this form will vary depending on individual
receivables, to the extent not previously
proportionate share of the property of any
circumstances. The estimated burden for
includible in income under the
other partnership in which it is a partner.
business taxpayers filing this form is
partnership’s accounting method, are any
See section 751(f).
approved under OMB control number
rights to payment for:
1545-0123 and is included in the estimates
Penalty for late filing of correct Form
1. Goods delivered or to be delivered, to
shown in the instructions for their business
8308. A penalty may be imposed for failing
the extent that the payment would be
income tax return.
to file each Form 8308 when due, including
treated as received for property other than
extensions. The penalty may also be
If you have suggestions for making these
a capital asset; and
imposed for failing to include all required
forms simpler, we would be happy to hear
2. Services rendered or to be rendered.
information on Form 8308 or for furnishing
from you. You can send us comments from
incorrect information. The penalty is based
www.irs.gov/FormComments. You can
Unrealized receivables also include the
on when the partnership files a correct
write to the Internal Revenue Service, Tax
amount of gain that would be ordinary
Form 8308.
Forms and Publications, 1111 Constitution
income if any of the following types of
Ave. NW, IR-6526, Washington, DC 20224.
partnership property were sold on the date
The penalty will not apply to any failure
Do not send Form 8308 to this address.
of the section 751(a) exchange.
that the partnership can show was due to
Instead, see When to file on page 1.
reasonable cause and not willful neglect.
For more details, see sections 6721 and
6724.
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