Instructions for Form 8804-W, Installment Payments of Section 1446 Tax for Partnerships

• Legal Form Number: 8804-W
• Year: 2024
• Issuer: Treasury Department
• Section: Treasury Department

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2024

Instructions for Form 8804-W

(WORKSHEET)

Installment Payments of Section 1446 Tax for Partnerships

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue

Code unless otherwise noted.

Future Developments

For the latest information about

developments related to Form 8804-W

and its instructions, such as legislation

enacted after they were published, go to

IRS.gov/Form8804W.

General Instructions

Purpose of Form

Partnerships that have effectively

connected taxable income (ECTI)

allocable to foreign partners can use the

Form 8804-W (WORKSHEET) to

determine the proper estimated section

1446 tax payments.

Who Must Make Estimated

Section 1446 Tax

Payments

Partnerships must generally make

installment payments of estimated section

1446 tax if the aggregate tax on the ECTI

that is allocable to all foreign partners will

be $500 or more.

When To Make Estimated

Section 1446 Tax

Payments

The installments are due by the 15th day

of the 4th, 6th, 9th, and 12th months of the

partnership's tax year. If any date falls on a

Saturday, Sunday, or legal holiday, the

installment is due on the next regular

business day.

Underpayment of

Estimated Section 1446

Tax

A partnership that doesn’t make estimated

section 1446 tax payments when due may

be subject to an underpayment penalty for

the period of underpayment. See

Schedule A (Form 8804) for details.

How To Make Estimated

Section 1446 Tax

Payments

A partnership that is required to make an

installment payment of section 1446 tax

must file Form 8813. Furthermore, the

partnership is generally required to notify

each foreign partner of the section 1446

tax paid on the partner's behalf within 10

days of the installment payment due date,

or, if paid later, the date the installment

payment is made. See Regulations

section 1.1446-3(d)(1)(i) for information

that must be included in the notification

and for exceptions to the notification

requirement.

Refiguring Estimated

Section 1446 Tax

If, after the partnership figures and makes

an installment payment of estimated

section 1446 tax, it finds that its section

1446 tax liability for the year will be more

or less than originally estimated, it may

have to refigure its required installments. If

earlier installments were underpaid, the

partnership may owe a penalty for

underpayment of estimated tax. An

immediate catch-up payment should be

made to reduce the amount of any penalty

resulting from the underpayment of any

earlier installments, whether caused by a

change in estimate, failure to make a

payment, or a mistake.

Specific Instructions

Part I—Determination of

Installment Payments

Complete Form 8804-W for each

installment payment of section 1446 tax

based on the information available at the

time of the installment payment.

Lines 1 Through 6—Current

Year Safe Harbor

Lines 1a, 1e, 1i, 1m, and 1q. To

determine the allocable share of ECTI for

all foreign partners, see Effectively

Connected Taxable Income in the

Instructions for Forms 8804, 8805, and

8813. Enter on lines 1i, 1m, and 1q the

specified types of ECTI allocable to those

partners who would be entitled to use a

preferential rate on such income or gain

(see Regulations section 1.1446-3(a)(2)).

For tiered partnerships, see Regulations

section 1.1446-5.

A partner may be entitled to use a

preferential rate on the following types of

income or gain.

1. Line 1i—See section 1(h)(4) and

the instructions for Schedule D (Form

1040), line 18, for more information

regarding 28% rate gain.

2. Line 1m—See section 1(h)(6) and

the instructions for Schedule D (Form

1040), line 19, for more information

regarding unrecaptured section 1250 gain.

3. Line 1q—Adjusted net capital gain

is net capital gain, as defined in section

1222(11), reduced (but not below zero) by

the sum of (a) unrecaptured section 1250

gain, and (b) 28% rate gain, plus qualified

dividend income. See section 1(h)(3).

If the partnership has net ordinary loss,

net short-term capital loss, or net 28% rate

loss, each net loss should be netted

against the appropriate categories of

income and gain to determine the

amounts of income and gain to be entered

on lines 1a, 1e, 1i, 1m, and 1q,

respectively. Don’t enter a negative

number on line 1a, 1e, 1i, 1m, or 1q. See

section 1(h) and Notice 97-59, 1997-45

I.R.B. 7, available at IRS.gov/pub/irs-irbs/

irb97-45.pdf, for rules for netting gains and

losses.

Lines 1b, 1f, 1j, 1n, and 1r. Enter the

reduction amounts for state and local

taxes under Regulations section

1.1446-6(c)(1)(iii). See Reductions for

State and Local Taxes in the Instructions

for Forms 8804, 8805, and 8813 for

additional information. The netting rules

under section 1(h) and Notice 97-59 must

be considered in determining the category

of income the reduction amounts offset.

Lines 1c, 1g, 1k, 1o, and 1s. Enter the

reduction amounts resulting from certified

partner-level items received from foreign

partners using Form 8804-C. See

Certification of Deductions and Losses in

the Instructions for Forms 8804, 8805, and

8813 for additional information. The

netting rules under section 1(h) and Notice

97-59 must be considered in determining

the category of income the reduction

amounts offset.

Line 8—Prior Year Safe Harbor

Enter the total section 1446 tax that would

have been due for 2023, applying the

2023 rates (see the 2023 Form 8804-W for

Jul 25, 2023 Cat. No. 51675X