Instructions for IRS Form 8804-C "Certificate of Partner-Level Items to Reduce Section 1446 Withholding"

This document contains official instructions for IRS Form 8804-C, Certificate of Partner-Level Items to Reduce Section 1446 Withholding - a tax form released and collected by the Internal Revenue Service (IRS), a subdivision of the U.S. Department of the Treasury. An up-to-date fillable IRS Form 8804-C is available for download through this link.

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Download Instructions for IRS Form 8804-C "Certificate of Partner-Level Items to Reduce Section 1446 Withholding"

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Instructions for Form 8804-C
Department of the Treasury
Internal Revenue Service
(Rev. November 2012)
(Use with the March 2009 revision of Form 8804-C)
Certificate of Partner-Level Items to Reduce Section 1446 Withholding
investment in the partnership is its only
receives written notification from the IRS
Section references are to the Internal Revenue
Code unless otherwise noted.
activity giving rise to effectively connected
revoking or modifying the original
income, gain, loss, or deduction, if the
notification.
Future Developments
partnership estimates that the annualized
When To File
For the latest information about
(or, in the case of a partnership
completing its Form 8804, the actual)
developments related to Form 8804-C,
1446 tax otherwise due for that partner is
and its instructions, such as legislation
Foreign partner. A foreign partner may
less than $1,000, without taking into
enacted after they were published, go to
submit a Form 8804-C to a partnership at
account any deductions or losses certified
www.irs.gov/form8804.
any time during the partnership's year and
by the partner to the partnership or any
prior to the partnership's filing of its Form
General Instructions
state and local taxes paid by the
8804.
partnership on behalf of the partner.
Partnership. A partnership must make
Purpose of Form
Who Must File
installment payments of 1446 tax with
respect to a foreign partner using Form
Form 8804-C is used by a foreign partner
8813. For the first installment period in
Foreign partner. A foreign partner must
who chooses to provide to a partnership a
which the partnership considers a Form
use Form 8804-C to provide a certification
certification under Regulations section
8804-C in calculating an installment
to a partnership under Regulations section
1.1446-6 to reduce or eliminate the
payment of 1446 tax, the partnership must
1.1446-6 to reduce or eliminate the 1446
partnership's withholding tax obligation
attach a copy of the Form 8804-C to the
tax the partnership must withhold and pay
under section 1446 (1446 tax) on the
Form 8813. For all subsequent installment
on ECTI allocable to the foreign partner.
partner's allocable share of effectively
periods for which the partnership
The foreign partner uses Form 8804-C to
connected taxable income (ECTI) from the
considers the same Form 8804-C, the
certify to the partnership that it meets all
partnership. The foreign partner uses
partnership may, instead of attaching a
the requirements of the regulations, and
Form 8804-C to certify to the partnership
copy of the Form 8804-C, attach to the
represents that the information provided,
that it has certain partner-level deductions
Form 8813 a statement listing the
including filing requirements, is true,
and losses that can reduce or eliminate
following information for each foreign
correct, and complete.
the 1446 tax on its allocable share of ECTI
partner whose certificate was relied upon
from the partnership or that its investment
during that installment period:
Failure to accurately supply all
in the partnership is its only activity giving
Name,
the information requested by the
!
rise to effectively connected income, gain,
form (including attachments) may
Taxpayer identification number, and
loss, or deduction. The foreign partner
CAUTION
result in the IRS rejecting the form and
The amount of certified deductions and
also uses Form 8804-C to update
prevent the partnership from considering
losses, and the amount of state and local
information previously certified to the
the certifications in the form in calculating
taxes (if any) the partnership may consider
partnership for the same tax year (updated
its 1446 tax on the partner's allocable
under Regulations section 1.1446-6(c)(1)
certificate).
share of ECTI.
(iii).
Each foreign partner who chooses to
If the partnership is relying on a de
A foreign partner should not file
submit a certificate to a partnership must
minimis certification submitted by a foreign
Form 8804-C with the IRS. Only
!
submit a separate Form 8804-C. Also, a
partner, the statement attached to the
the partnership files Form 8804-C
foreign partner must submit a new Form
Form 8813 should instead indicate that no
CAUTION
with the IRS.
8804-C for each tax year in which it
1446 tax is due with respect to that partner
chooses to utilize the provisions of
based on the de minimis certification.
Partnership. A partnership that receives
Regulations section 1.1446-6.
In all events, the partnership must
a Form 8804-C from a foreign partner is
attach the foreign partner's most recently
not obligated to consider the Form 8804-C
A partnership that receives a Form
submitted Form 8804-C to the Form 8805
in computing the 1446 tax due with
8804-C from a foreign partner may
filed for the partnership's tax year in which
respect to that foreign partner. However, if
consider the form in calculating, paying,
the Form 8804-C was considered.
the partnership considers the Form
and reporting the 1446 tax due with
8804-C in computing the 1446 tax due
respect to the ECTI allocable to the
Also, in all events, the partnership must
with respect to a foreign partner, the
foreign partner. A partnership may
attach a copy of the computation of 1446
partnership must submit a copy of the
consider, in whole or in part, a Form
tax due with respect to such foreign
Form 8804-C to the IRS as explained in
8804-C received from a foreign partner to
partner to all Forms 8813, Partnership
When To File below.
reduce or eliminate the 1446 tax withheld
Withholding Tax Payment Voucher
and paid with respect to that partner
If the partnership receives written
(Section 1446), and Forms 8805, Foreign
based on the deductions and losses
notification from the IRS that a foreign
Partner's Information Statement of Section
certified by the foreign partner on the Form
partner's certificate is defective, the
1446 Withholding Tax, filed with the IRS
8804-C.
partnership may not use that certificate or
for any installment period or year for which
such Form 8804-C is considered in
any other certificate submitted by the
A partnership may also eliminate the
computing the partnership's 1446 tax. The
foreign partner for the year submitted or
1446 tax due with respect to a partner that
any subsequent year until the partnership
computation of 1446 tax due attached to
certifies, using Form 8804-C, that its
Nov 16, 2012
Cat. No. 51633R
Instructions for Form 8804-C
Department of the Treasury
Internal Revenue Service
(Rev. November 2012)
(Use with the March 2009 revision of Form 8804-C)
Certificate of Partner-Level Items to Reduce Section 1446 Withholding
investment in the partnership is its only
receives written notification from the IRS
Section references are to the Internal Revenue
Code unless otherwise noted.
activity giving rise to effectively connected
revoking or modifying the original
income, gain, loss, or deduction, if the
notification.
Future Developments
partnership estimates that the annualized
When To File
For the latest information about
(or, in the case of a partnership
completing its Form 8804, the actual)
developments related to Form 8804-C,
1446 tax otherwise due for that partner is
and its instructions, such as legislation
Foreign partner. A foreign partner may
less than $1,000, without taking into
enacted after they were published, go to
submit a Form 8804-C to a partnership at
account any deductions or losses certified
www.irs.gov/form8804.
any time during the partnership's year and
by the partner to the partnership or any
prior to the partnership's filing of its Form
General Instructions
state and local taxes paid by the
8804.
partnership on behalf of the partner.
Partnership. A partnership must make
Purpose of Form
Who Must File
installment payments of 1446 tax with
respect to a foreign partner using Form
Form 8804-C is used by a foreign partner
8813. For the first installment period in
Foreign partner. A foreign partner must
who chooses to provide to a partnership a
which the partnership considers a Form
use Form 8804-C to provide a certification
certification under Regulations section
8804-C in calculating an installment
to a partnership under Regulations section
1.1446-6 to reduce or eliminate the
payment of 1446 tax, the partnership must
1.1446-6 to reduce or eliminate the 1446
partnership's withholding tax obligation
attach a copy of the Form 8804-C to the
tax the partnership must withhold and pay
under section 1446 (1446 tax) on the
Form 8813. For all subsequent installment
on ECTI allocable to the foreign partner.
partner's allocable share of effectively
periods for which the partnership
The foreign partner uses Form 8804-C to
connected taxable income (ECTI) from the
considers the same Form 8804-C, the
certify to the partnership that it meets all
partnership. The foreign partner uses
partnership may, instead of attaching a
the requirements of the regulations, and
Form 8804-C to certify to the partnership
copy of the Form 8804-C, attach to the
represents that the information provided,
that it has certain partner-level deductions
Form 8813 a statement listing the
including filing requirements, is true,
and losses that can reduce or eliminate
following information for each foreign
correct, and complete.
the 1446 tax on its allocable share of ECTI
partner whose certificate was relied upon
from the partnership or that its investment
during that installment period:
Failure to accurately supply all
in the partnership is its only activity giving
Name,
the information requested by the
!
rise to effectively connected income, gain,
form (including attachments) may
Taxpayer identification number, and
loss, or deduction. The foreign partner
CAUTION
result in the IRS rejecting the form and
The amount of certified deductions and
also uses Form 8804-C to update
prevent the partnership from considering
losses, and the amount of state and local
information previously certified to the
the certifications in the form in calculating
taxes (if any) the partnership may consider
partnership for the same tax year (updated
its 1446 tax on the partner's allocable
under Regulations section 1.1446-6(c)(1)
certificate).
share of ECTI.
(iii).
Each foreign partner who chooses to
If the partnership is relying on a de
A foreign partner should not file
submit a certificate to a partnership must
minimis certification submitted by a foreign
Form 8804-C with the IRS. Only
!
submit a separate Form 8804-C. Also, a
partner, the statement attached to the
the partnership files Form 8804-C
foreign partner must submit a new Form
Form 8813 should instead indicate that no
CAUTION
with the IRS.
8804-C for each tax year in which it
1446 tax is due with respect to that partner
chooses to utilize the provisions of
based on the de minimis certification.
Partnership. A partnership that receives
Regulations section 1.1446-6.
In all events, the partnership must
a Form 8804-C from a foreign partner is
attach the foreign partner's most recently
not obligated to consider the Form 8804-C
A partnership that receives a Form
submitted Form 8804-C to the Form 8805
in computing the 1446 tax due with
8804-C from a foreign partner may
filed for the partnership's tax year in which
respect to that foreign partner. However, if
consider the form in calculating, paying,
the Form 8804-C was considered.
the partnership considers the Form
and reporting the 1446 tax due with
8804-C in computing the 1446 tax due
respect to the ECTI allocable to the
Also, in all events, the partnership must
with respect to a foreign partner, the
foreign partner. A partnership may
attach a copy of the computation of 1446
partnership must submit a copy of the
consider, in whole or in part, a Form
tax due with respect to such foreign
Form 8804-C to the IRS as explained in
8804-C received from a foreign partner to
partner to all Forms 8813, Partnership
When To File below.
reduce or eliminate the 1446 tax withheld
Withholding Tax Payment Voucher
and paid with respect to that partner
If the partnership receives written
(Section 1446), and Forms 8805, Foreign
based on the deductions and losses
notification from the IRS that a foreign
Partner's Information Statement of Section
certified by the foreign partner on the Form
partner's certificate is defective, the
1446 Withholding Tax, filed with the IRS
8804-C.
partnership may not use that certificate or
for any installment period or year for which
such Form 8804-C is considered in
any other certificate submitted by the
A partnership may also eliminate the
computing the partnership's 1446 tax. The
foreign partner for the year submitted or
1446 tax due with respect to a partner that
any subsequent year until the partnership
computation of 1446 tax due attached to
certifies, using Form 8804-C, that its
Nov 16, 2012
Cat. No. 51633R
each form must include the amount, if any,
1.1446-1 to determine the status of these
to Form 8813 for any installment period
of state and local taxes described in
partners and determine their indirect share
such Form 8804-C is considered in
Regulations section 1.1446-6(c)(1)(iii) that
of the lower-tier partnership's ECTI. See
computing the partnership's 1446 tax.
is taken into account with respect to that
Regulations sections 1.1446-5(c) and (e).
Also attach the required computation of
partner.
1446 tax due to Form 8805 when filing
2. An upper-tier partnership that
Form 8804.
A partnership that considers a Form
submits a Form 8804-C of a direct or
8804-C received from a foreign partner
indirect foreign partner to a lower-tier
Specific Instructions
(including an updated Form 8804-C) when
partnership may not submit that Form
computing its 1446 tax due with respect to
8804-C to another lower-tier partnership.
such partner must file Form 8813 for each
3. An upper-tier partnership that relies
Partnership tax year. Enter in the space
installment period for which the Form
on a Form 8804-C submitted to it by a
below the title of Form 8804-C the tax year
8804-C is considered, even if, as a result
direct or indirect foreign partner to
of the partnership to whom you are
of relying on the certificate, no 1446 tax (or
compute its 1446 tax due on ECTI
furnishing this certificate. If you are
an installment of such tax) is due with
allocable to that partner (other than ECTI
uncertain, contact the partnership and
respect to such foreign partner. The same
allocated to it from a lower-tier
request its tax year.
rule applies with respect to the filing of
partnership) may not submit that Form
Forms 8804 and 8805 at the end of the
Part I – General
8804-C to any lower-tier partnership.
partnership's tax year.
Information
4. A lower-tier partnership that relies
A partnership that fails to timely file a
on a Form 8804-C of a foreign partner in
valid certificate and computation of 1446
Item A. First certificate
an upper-tier partnership to reduce the
tax due is considered to have satisfied the
1446 tax due with respect to such foreign
Check the box only if the partner is
above filing requirements if the partnership
partner must submit sufficient information
submitting a Form 8804-C to any
demonstrates to the IRS that the failure
with each Form 8813, and Form 8805, so
partnership for the first time, and has
was due to reasonable cause and not
that the IRS may reliably associate the
never submitted a certificate to any
willful neglect. See Regulations section
ECTI and the Form 8804-C with the
partnership under the section 1446
1.1446-6(d)(3)(ii) for more information,
foreign partner in the upper-tier
regulations for any tax year.
including the requirements and
partnership. The information submitted
Item B. Previously submitted
documents necessary to be submitted to
must include the foreign partner's name
satisfy this requirement. All required
certificate
and taxpayer identification number, as
documentation should be mailed to:
well as the allocations of effectively
If applicable, enter the foreign partner's
connected items at each partnership level.
first tax year for which it submitted a
Department of the Treasury
certificate under the section 1446
Internal Revenue Service Center
Avoid Common Errors
regulations to any partnership. For
Philadelphia, PA 19255-0549
example, if the foreign partner is a
Foreign partner. To ensure that your
calendar year taxpayer and previously
A partnership that fails to comply
Form 8804-C is accepted, be sure that
submitted a certificate for its 2010 tax
you:
with the above requirements will
!
year, enter “January 1, 2010 – December
not qualify to consider a foreign
Answer all applicable questions
CAUTION
31, 2010.”
partner's Form 8804-C in calculating its
completely.
1446 tax. Therefore, a partnership that
Complete the date of certification in the
Item C. Updated certificate
considers a foreign partner's Form 8804-C
space provided in Part I.
See Form 8804-C, line 5, for the
under these circumstances will have
Enter your complete name, address,
circumstances when an updated
underpaid its 1446 tax and may be subject
and identifying number in Part I, Section A.
certificate is required.
to an underpayment penalty. See
Enter the complete name, address, and
Regulations sections 1.1446-3(b)(2) and
Addresses
EIN of the partnership in Part I, Section B.
1.1446-6(d)(3).
Attach any statement required by
When providing a U.S. street address on
line 5f, 8b, 8d, 8e, or 8f, if the line(s) is
Form 8804-C, include the suite, room, or
Tiered Partnership Rules
applicable.
other unit number after the street address.
If making the certification in Part II,
If the Post Office does not deliver mail to
The following special rules apply to a
complete lines 8a through 8f accurately to
the street address and the foreign partner
partnership (upper-tier partnership), with
allow the IRS to determine the benefit you
(or partnership) has a P.O. box, enter the
one or more foreign partners, that is also a
are claiming.
box number instead of the street address.
partner in another partnership (lower-tier
List on line 4a all returns that have not
If the foreign partner (or partnership)
partnership).
been filed.
receives its mail in care of a third party
1. An upper-tier partnership may
Sign and date Part IV. If signed by an
(such as an accountant or attorney), enter
submit Forms 8804-C for its direct or
authorized representative, be sure to
on the street address line “c/o” followed by
indirect foreign partners to a lower-tier
attach a copy of the power of attorney.
the third party's name and street address
partnership only to the extent that
or P.O. box. When providing a foreign
Partnership. To qualify to consider a
Regulations section 1.1446-5 applies to
address on Form 8804-C, enter the
Form 8804-C to reduce the amount of
allow the lower-tier partnership to look
number and street, city, province or state,
1446 tax withheld and paid, be sure to:
through the upper-tier partnership (and
and the name of the country. Follow the
Attach Form 8804-C to Form 8813 for
any partnership owning an interest in the
foreign country's practice in placing the
the first installment the Form 8804-C is
upper-tier partnership for which the
postal code in the address. Do not
considered. For subsequent installments,
upper-tier partnership is submitting Forms
abbreviate the country name.
see When To File, earlier. Also attach
8804-C for that partnership) to its partners.
Form 8804-C to Form 8805 when filing
Included in this requirement is that the
Form 8804.
upper-tier partnership provide the
Attach the required computation of
lower-tier partnership sufficient
1446 tax due (see When To File, earlier)
documentation under Regulations section
Instructions for Form 8804-C (Rev. 11-2012)
-2-
Section A – Partner
Line 1b
paid (or will pay) all amounts due with
respect to the returns (including interest,
Information
The only type of trust that may submit a
penalties, and additions to tax, if any) by
certificate to a partnership is a grantor
the date they are filed. NRA's 2009
Foreign partner's name
trust. A grantor trust is any trust over which
through 2011 U.S. federal income tax
the grantor or other owner retains the
Enter the foreign partner's name. If the
returns report income or gain effectively
power to control or direct the trust's
partner is an individual, enter the partner's
connected with a U.S. trade or business or
income or assets. See sections 671
last name (surname), then first name. For
deductions or losses properly allocated
through 679. A grantor trust may submit a
business entities, enter the complete and
and apportioned to such activities.
certificate if the grantor or other owner of
official business name (as set forth in the
the trust has submitted the certificate and
Because 2012 is NRA's first tax year
charter or other legal document creating
has met the documentation requirements
for which he is submitting a certificate to
it). If a “c/o” or another person's name is
of Regulations section 1.1446-1.
any partnership (regardless of whether he
necessary, insert that information in the
was a partner in PRS or any other
address line.
Line 2a
partnership during each of these years),
Foreign partner's taxpayer
A partner may make estimated payments
he must meet the following requirements:
identifying number (TIN)
for both income tax and self-employment
1. His U.S. federal income tax return
tax, as well as other taxes and amounts
If the partner is an individual, the TIN is the
for the 2011 tax year must be timely filed,
reported on its tax return. If the partner
individual's social security number or
including any extensions he obtained;
does not pay enough tax through
individual taxpayer identification number,
2. His U.S. federal income tax return
withholding or estimated tax payments, it
and must be entered using a
for the 2009 and 2010 tax years must
may be charged a penalty. If the partner
NNN-NN-NNNN format (for example,
have been filed by the earlier of:
does not pay enough tax by the due date
123-45-6789). The TIN of any other
The date that is one year after the due
of each payment period, it may be
foreign partner is its U.S. employer
date set forth in section 6072(c) for filing
charged a penalty even if it is due a refund
identification number (EIN), and must be
such return, not including any extensions
when it files its tax return. For more
entered using a NN-NNNNNNN format
of time to file; or
information see Forms 2210 and 2220.
(for example, 12-3456789).
July 23, 2012, the date on which this
Line 2b
Date of certification
certificate is submitted to the partnership;
The character of a loss includes whether
3. All amounts due with each return
Enter the date when the foreign partner
the loss is ordinary or capital and whether
(including interest, penalties, and
submits the certificate (Form 8804-C) to
or not it is passive.
additions to tax, if any) must have been (or
the partnership. Use a MM/DD/YYYY
will be) paid on or before these dates for
Line 2c
format (for example, 09/24/2012).
filing such returns.
Foreign partner's address
See Form of certification in the
While NRA's 2009 and 2010 U.S.
Instructions for Forms 8804, 8805, and
See Addresses, earlier.
federal income tax returns were filed after
8813 for a listing of documentation a
their due dates, they were filed within one
foreign partner can provide to a
Section B – Partnership
year of the due date and before NRA
partnership under Regulations section
Information
1.1446-1 to establish its foreign status.
submitted his certificate to PRS. In
addition, if NRA files his 2011 U.S. federal
Lines 3a and 3b
Partnership's name
income tax return on April 13, 2012, and
The following examples illustrate the
his 2012 U.S. federal income tax return on
Enter the partnership's name. If a “c/o” or
required representations.
another person's name is necessary,
May 14, 2013, then such returns will be
insert that information in the address line.
timely filed. Finally, all amounts due with
Example 1. A foreign individual (NRA)
each return (including interest, penalties,
Employer identification number
and a U.S. individual (B) form a
and additions to tax, if any) were (or will
partnership (PRS) in 2012 to conduct a
(EIN)
be) paid on or before these dates.
trade or business in the United States.
Therefore, NRA is eligible to submit a
Enter the partnership's EIN using a
NRA and B provide PRS appropriate
certificate to PRS in 2012.
NN-NNNNNNN format (for example,
documentation under Regulations section
12-3456789).
1.1446-1 to establish their status for
Example 2. Assume the same facts as
purposes of section 1446. NRA, B, and
Example 1 except NRA had submitted a
Partnership's address
PRS are calendar year taxpayers. NRA
certificate to another partnership in 2009.
See Addresses, earlier.
submits a Form 8804-C to PRS on July
Under these circumstances NRA was
23, 2012, to be considered by PRS in
required to have timely filed his U.S.
Section C – Partner
determining its 1446 tax due with respect
federal income tax return for 2009 and all
Representations
to NRA for the third installment period in
subsequent tax years. Because NRA did
2012. The Form 8804-C indicates that
not timely file his 2009 U.S. federal
Line 1a
NRA reasonably expects to have an
income tax return, NRA is not eligible to
effectively connected net operating loss of
submit a certificate to any partnership,
A foreign partner must represent that the
$5,000 available to offset his allocable
including PRS, for any subsequent tax
Form 8804-C is not being submitted to a
share of ECTI from PRS in 2012. Prior to
year, including 2012.
publicly traded partnership. A publicly
2012, NRA had not submitted a certificate
traded partnership is any partnership (a)
Line 4a
to a partnership. NRA filed his 2009 U.S.
whose interests are regularly traded on an
federal income tax return on March 14,
A foreign partner submitting a Form
established securities market or is readily
8804-C to the partnership must list all
2011; his 2010 U.S. federal income tax
tradable on a secondary market (or the
returns required under line 3a or 3b that
return on February 13, 2012; and his 2011
substantial equivalent thereof), and (b)
have not been filed at the time of the Form
U.S. federal income tax return on April 13,
that is not treated as a corporation. See
8804-C submission.
2012. NRA will file his 2012 U.S. federal
section 7704.
income tax return on May 14, 2013. NRA
Instructions for Form 8804-C (Rev. 11-2012)
-3-
Line 7
Example 3. A foreign partner submits
The foreign partner is also required to
a Form 8804-C to its U.S. partnership on
submit to the partnership another updated
A foreign partner may not certify a loss or
June 1, 2012, but has not yet filed its 2011
Form 8804-C when it files the prior year
deduction for a tax year that ends on the
U.S. federal income tax return. The foreign
income tax return. On that updated Form
same date as or after the partnership's tax
partner discloses the required information
8804-C, the foreign partner will check the
year ends. See the instructions for lines 3a
on line 4a as follows.
box on line 5a to inform the partnership of
and 3b, earlier, for the filing dates required
the occurrence of the event.
for U.S. federal income tax returns on
Return Form: 1040NR
which the deductions and losses must be
The foreign partner must inform
Tax Year Ended: December 31, 2011
reflected.
the partnership if it fails to file the
!
Filing Due Date: June 15, 2012
prior year return by its due date
Example 5. Both the foreign partner
CAUTION
Section D – Updated
including any extensions obtained. In this
and the partnership have calendar tax
case, the partnership must disregard the
Certificates
years. The foreign partner may certify a
partner's certificate when computing the
net operating loss (NOL) for its 2011 tax
A foreign partner must submit any updated
1446 tax due with respect to that partner
year to the partnership for the
certificate(s) required by line 5a, 5c, 5d, or
for all remaining installment periods and
partnership's 2012 tax year. However, the
when completing its Form 8804 for the tax
5e within 10 days of the occurrence of the
foreign partner may not certify an NOL for
year.
event described on the applicable line(s).
its 2012 tax year for the partnership's 2012
Like the first Form 8804-C, a partner must
tax year.
Line 5d
submit any updated Forms 8804-C to the
partnership, not the IRS.
Example 6. The foreign partner has a
The character of a loss includes whether
fiscal tax year ending on June 30, and the
the loss is ordinary or capital and whether
Example 4. When the foreign partner
partnership has a calendar tax year. The
or not it is passive.
submitted its first certificate to the
foreign partner may not certify an NOL for
partnership, it had not yet filed a prior year
Line 5e
its tax year ending June 30, 2012, to the
U.S. federal income tax return. When the
partnership until after June 30, 2012. If the
Examples of when another activity would
foreign partner files the tax return, it
foreign partner certifies the NOL on July
give rise to effectively connected income,
determines that it had overstated the
16, 2012, the partnership is not permitted
gain, loss, or deduction include if the
amount of the loss certified on its first
to consider that NOL until its September
foreign partner began a U.S. trade or
certificate. The partner would check boxes
15, 2012, installment due date.
business or invested in a partnership that
5a and 5d when it submits its updated
is engaged in a U.S. trade or business.
Line 8
certificate.
Line 5f
The following instructions explain the
Lines 5b and 5c
responsibilities of the partner and the
Examples of other information that would
A foreign partner checks the box on
partnership with respect to this line.
require an updated certificate include a
line 5b or line 5c to provide the status
partner correcting an incorrect taxpayer
Partnership. A partnership must take into
update required by Regulations section
identification number or address listed on
account any limitations on the use of any
1.1446-6(c)(2)(ii)(B)(1), if applicable. This
the first Form 8804-C.
deduction or loss certified by the foreign
update informs the partnership that an
partners on Form 8804-C in determining
un-filed prior year U.S. federal income tax
Part II – Certifications of
the 1446 tax due with respect to the
return listed on a previous certificate
Deductions and Losses
partner. For example, a partner certifies
remains un-filed. This updated certificate
passive activity losses on line 8d and
must be provided to the partnership before
Under Regulations Section
identifies the activities the partnership
the partnership's final installment due date
1.1446-6(c)(1)(i)
conducts that the partner expects will be
of 1446 tax. The partnership's installment
passive activities. The partnership must
due dates of 1446 tax are the 15th day of
In Part II, the foreign partner makes
limit the amount of certified loss it
the 4th, 6th, 9th, and 12th months of its tax
representations about the character and
considers relating to each activity to the
year. For calendar year partnerships,
amounts of its deductions and losses that
amount of income the partnership
these correspond to the 15th day of April,
are available to offset its allocable share of
generates from that activity.
June, September, and December.
ECTI. The foreign partner also lists the
amounts and character of the eligible
Foreign partner. Enter on the
If the first certificate submitted can
deductions and losses. Deductions and
appropriate line the amount of the eligible
continue to be considered by the
losses certified to a partnership for a tax
deductions and losses that are being
partnership, check the box on line 5b. If
year of the partnership may not be
represented to the partnership. The
the first certificate submitted can no longer
certified to another partnership whose tax
character of the deductions and losses will
be considered by the partnership, check
year begins or ends with or within the tax
determine where the entry is made. Any
the box on line 5c.
year of the partnership to which the
deductions and losses certified to the
deductions and losses were certified.
partnership from another partnership must
If the partnership does not
be reported on a Form 1065
receive an updated certificate
!
Note. If Part III is applicable, it is not
(Schedule K-1) issued (or to be issued) to
from the partner prior to the
necessary to complete Part II. However,
CAUTION
partnership's final installment due date (or
the foreign partner by such other
under some circumstances, it may be
if the statement described in the previous
partnership.
advisable to complete both Part II and Part
paragraph is not attached to the
III. See the instructions for line 11, later, for
A foreign partner may not certify
certificate), the partnership must disregard
more information.
current year deductions and
!
the partner's certificate when computing
losses to a partnership.
Line 6
the 1446 tax due with respect to that
CAUTION
partner for the final installment period and
A partner may not certify charitable
when completing its Form 8804 for the tax
contribution deductions to the partnership.
year. See Regulations section 1.1446-6(c)
(2)(ii)(B)(1) for additional information.
Instructions for Form 8804-C (Rev. 11-2012)
-4-
capital losses from long-term capital
(in which the partner is or was a partner)
Column (a)
losses in the attachment.
that affects the foreign partner's original
A partner submitting its first certificate for
distributive share of deductions and
Line 8c
the current tax year should complete
losses from a prior year.
column (a) only. A partner submitting an
Enter only those losses suspended under
updated certificate should complete
Part III – Certification
section 704(d) that are attributable to the
columns (a), (b), and (c).
partnership to which this certificate is
Under Regulations Section
being submitted. Section 704(d) limits the
A partner submitting an updated
1.1446-6
amount of losses (that flow through a
certificate should enter in column (a) the
partnership to a partner) to the partner's
Line 11
amounts from its first certificate submitted
basis in the partnership. Any excess
to the partnership for the current tax year.
losses are suspended and may not be
When applicable under Regulations
If the first certificate has been superseded,
used by the partner until the partner's
section 1.1446-6(c)(1)(ii)(B), a foreign
enter in column (a) the amounts from the
basis increases. A partner may certify its
partner may certify that its investment in
most recent certificate submitted to the
losses suspended under section 704(d)
the partnership is (and will be) the sole
partnership.
only to the partnership to whom those
activity that will give rise to effectively
losses are attributable.
connected income, gain, deduction, or
Column (b)
loss during the partner's tax year in which
Line 8d
Form 8804-C is submitted to the
Enter the net increase or net decrease for
Enter only those suspended activity losses
partnership. The foreign partner must
each line being changed.
that meet the requirements of Regulations
make this determination based on the
section 1.1446-6(c)(1)(i)(D). Attach a
partnership's tax year that ends with or
Column (c)
statement identifying the partnership
within the partner's tax year. A qualifying
activity to which each loss relates. For
foreign partner makes this certification by
Add the increase in column (b) to the
more information regarding passive
checking the box on line 11.
amount in column (a), or subtract the
activity losses, see Form 8582 and Pub.
column (b) decrease from column (a).
A foreign partner may make the
925.
Enter the result in column (c). For an item
certification on line 11 without making the
that did not change, enter the amount from
Line 8e
certifications in Part II. However, see the
column (a) in column (c).
next paragraph for the only circumstance
Enter only those suspended at-risk losses
under which a partnership may consider a
that meet the requirements of Regulations
Note. Show any negative numbers
certification on line 11. A foreign partner
section 1.1446-6(c)(1)(i)(D). Attach a
(losses or decreases) in columns (a), (b),
making the certifications in Part II need not
statement identifying the partnership
or (c) in parentheses.
make the certification on line 11.
activity to which each loss relates. For
Line 8a. Net Operating Loss
more information regarding at-risk loss
A partnership that receives this
Carryover
limitations, see Form 6198 and Pub. 925.
certification from a foreign partner, and
Line 8f
that may reasonably rely on such
Foreign partner. The NOL must be
certification, is not required to pay 1446
connected with gross income which is
Enter other ordinary deductions and
tax (or any installment of such tax) with
effectively connected (or treated as
losses described in Regulations section
respect to such partner if the partnership
effectively connected) with conduct of the
1.1446-6(c)(1)(i) that are subject to
estimates that the annualized (or, in the
partner's trade or business in the United
partner level limitation or warrant special
case of a partnership completing its Form
States.
consideration. A foreign partner must
8804, the actual) 1446 tax otherwise due
identify in an attachment any other
Partnership. Regulations section
with respect to such partner is less than
certified losses or deductions that are
1.1446-6(c)(1)(i)(C) provides that a
$1,000, without taking into account any
subject to special limitations at the partner
partnership may not consider a partner's
deductions or losses the foreign partner
level.
certified NOL deduction in an amount
certified to the partnership or any state
greater than 90% of the partner's allocable
Line 9
and local taxes the partnership withholds
share of ECTI reduced by all other
on behalf of the partner.
If a foreign partner is a partner in more
certified deductions whether or not
than one partnership, the partner may
otherwise taken into account, as well as
Part IV – Disclosure
certify some of its deductions and losses
state and local income taxes the
Consent and Signature
to one partnership and some to another.
partnership withholds on behalf of the
However, the total of any one type of
partner that are taken into account under
Foreign partners should note the
deduction or loss certified to all
Regulations section 1.1446-6(c)(1)(iii).
importance of the two statements on the
partnerships may not exceed the amount
The 90% limitation should be applied on a
form to which they are consenting and
of that deduction or loss carried forward
cumulative basis for each installment
certifying under penalties of perjury. The
from a prior year that the partner may
period. Note that if the partnership's
first statement reads as follows:
claim on its current year U.S. federal tax
annualized income changes during the
“Consent is hereby given to disclosures
return.
year, the limitation on the amount of the
of return and return information by the
certified NOL deduction that the
Line 10
Internal Revenue Service pertaining to the
partnership may take into account can
The foreign partner may not utilize
validity of this certificate to the partnership
increase or decrease accordingly. See
deductions and losses that have been
or other withholding agent to which this
Regulations section 1.1446-3(b)(2)(i)(B).
disallowed or proposed to be adjusted by
certificate is submitted for the purpose of
Line 8b
the IRS. This refers not only to loss
administering section 1446.”
disallowances or proposed adjustments
Attach a statement that indicates the type
The foreign partner's consent gives the
resulting from an IRS audit of the foreign
and amount of each capital loss. The
IRS authority to contact the partnership or
partner, but also to those resulting from an
foreign partner must distinguish short-term
withholding agent directly with questions
administrative proceeding of a partnership
to ensure processing of the certificate.
Instructions for Form 8804-C (Rev. 11-2012)
-5-