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method. If the partnership’s ECTI is

determining any penalty due on Schedule

and IV. If only the annualized income

A (Form 8804).

expected to vary during the year because,

installment method (Part III) is used,

for example, it operates its business on a

complete Parts III and IV. If both methods

If the partnership begins using the

seasonal basis, it may be able to lower

are used, complete all three parts. Enter

prior year safe harbor method and it

the amount of one or more required

in each column on line 10 the amounts

determines later in the tax year (based

installments by using the annualized

from the corresponding column of line 42.

upon the standard option annualization

income installment method and/or the

method described later in these

Do not figure any required

adjusted seasonal installment method.

instructions) that it will not meet the 50%

installment until after the end of

For example, a ski shop, which receives

of ECTI requirement described in the last

the month preceding the due date

most of its income during the winter

CAUTION

bulleted item above, it may make all

for that installment.

months, may be able to benefit from using

subsequent installment payments using

Extraordinary items. Generally, under

one or both of these methods in figuring

the standard option annualization method

the annualized income installment

one or more of its required installments.

and it will not be subject to the penalty

method, extraordinary items must be

To use one or both of these methods,

determined on Schedule A (Form 8804).

taken into account after annualizing the

complete Part II and/or Part III of the

This change in method must be disclosed

ECTI for the annualization period. Similar

in a statement attached to the Form 8804

form. If those Parts are used for any

rules apply in determining ECTI under the

payment date, those Parts must be used

the partnership files for the current tax

adjusted seasonal installment method. An

year and the statement must include

for all subsequent payment due dates. To

extraordinary item includes:

enough information to allow the IRS to

arrive at the amount of each required

•

Any item identified in Regulations

installment, Part IV automatically selects

determine whether the change was

section 1.1502-76(b)(2)(ii)(C)(1), (2), (3),

the smallest of (a) the annualized income

appropriate.

(4), (7), and (8);

installment (if applicable), (b) the adjusted

If the partnership begins using the

•

A section 481(a) adjustment; and

seasonal installment (if applicable), or (c)

prior year safe harbor method and

•

Net gain or loss from the disposition of

the current year safe harbor (increased by

switches to the current year safe harbor

25% or more of the fair market value of

any recapture of a reduction in a required

(because the partnership does not qualify

the partnership’s business assets during

installment under section 6655(e)(1)(B)).

for the relief described in the previous

the tax year.

Partnerships with assets of $1 billion

paragraph (i.e., using the standard option

These extraordinary items must be

or more. If the partnership had assets of

annualization method) or the partnership

accounted for in the appropriate

$1 billion or more (determined as of the

chooses not to continue using it), in order

annualization period. However, a section

end of the preceding tax year), with

to avoid an underpayment penalty with

481(a) adjustment (unless the partnership

respect to any required installment of

respect to the current installment

makes the alternative choice under

estimated tax due in July, August, or

payment, the partnership must pay the

Regulations section 1.6655-2(f)(3)(ii)(C))

September 2012, enter 100.5% of the

sum of (a) the current installment

is treated as an extraordinary item

amount that would have been otherwise

payment based on the current year safe

occurring on the first day of the tax year in

due for that required installment.

harbor, plus (b) the sum of the amount by

which the item is taken into account in

which the current year safe harbor

Note. The amount of the next required

determining ECTI.

exceeds the prior year safe harbor

installment, after the required installment

amount paid in for each prior installment

For more information regarding

referred to in the previous paragraph, is

period during which it qualified for the

extraordinary items, see Regulations

reduced to reflect the amount of the

prior year safe harbor.

section 1.6655-2(f)(3)(ii) and the

required increase in the previous

examples in Regulations section

installment.

Line 8

1.6655-2(f)(3)(vii). Also see Regulations

Line 11

Enter the smaller of line 6 or line 7.

section 1.6655-3(d)(3).

However, if, for any installment payment,

Include on line 11 any 2011 overpayment

De minimis rule. Extraordinary items

line 6 is smaller than line 7 and you enter

that the partnership chose to credit

identified above resulting from a particular

that smaller line 6 amount on line 8, you

against its 2012 tax. The overpayment is

transaction that total less than $1 million

will not qualify for the prior year safe

credited against unpaid required

(other than a section 481(a) adjustment)

harbor when determining any penalty due

installments in the order in which the

may be annualized using the general

on Schedule A (Form 8804) (see the line

installments are required to be paid.

rules of Regulations section 1.6655-2(f),

7 instructions on page 1). Therefore, in

or, if the partnership chooses, may be

Also include on line 11 any:

that case, for any subsequent installment

taken into account after annualizing the

•

payment during the tax year, do not use

Section 1446 tax withheld and paid by

ECTI for the annualization period.

the line 7 amount.

another partnership because the

partnership preparing this Form 8804-W

Part II—Adjusted Seasonal

Line 9—Installment Due Dates

was a partner in that partnership during

Installment Method

the tax year. See the instructions for Form

Calendar-year taxpayers. Enter

8804, line 6b, in the Instructions for

4-17-2012, 6-15-2012, 9-17-2012, and

Note. Part II does not reflect the lower

Forms 8804, 8805, and 8813.

12-17-2012, respectively, in columns (a)

preferential rates permitted under

•

Section 1445(a) or 1445(e)(1) tax

through (d).

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

withheld from or paid by the partnership

These were omitted because, for most

Fiscal-year taxpayers. Enter the 15th

filing this Form 8804-W during the tax

taxpayers, the income reported in Part II

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

year for a disposition of a U.S. real

will be predominantly (or exclusively)

of the partnership’s tax year in columns

property interest. See the instructions for

ordinary income. If the partnership wishes

(a) through (d). If the regular due date

Form 8804, line 6c, in the Instructions for

to consider lower preferential rates for

falls on a Saturday, Sunday, or legal

Forms 8804, 8805, and 8813.

Part II (and if the requirements outlined in

holiday, enter the next business day.

The partnership generally enters these

the Note in the line 30 instructions are

Line 10

amounts in the column that corresponds

met), it must attach a schedule which

to the installment period for which these

Enter 25% of line 8 in columns (a)

appropriately expands lines 14 and 21

amounts were paid or withheld. However,

through (d) unless the partnership uses

through 24 to show the applicable special

if the partnership learns about the

the annualized income installment

types of income or gain and the

payments or withholding in a subsequent

method or the adjusted seasonal

applicable percentages (see, for example,

installment method, or the partnership

installment period, the partnership may

lines 32 and 33 of this schedule).

claim them in that period.

had assets of $1 billion or more, and a

Complete this part only if the

required installment of estimated tax due

partnership’s base period percentage for

Parts II Through IV

in July, August, or September 2012.

any 6 consecutive months of the tax year

Annualized income installment method

If only the adjusted seasonal installment

equals or exceeds 70%. Figure the base

and/or adjusted seasonal installment

method (Part II) is used, complete Parts II

period percentage using the 6-month

-2-

Instructions for Form 8804-W (2012)

Instructions For Form 8804-W - Estimated Section 1446 Tax Payments - Internal Revenue Service - 2012 Page 2

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