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Parts II Through IV

Line 10

these requirements, it will not qualify for

the prior year safe harbor when

Enter 25% of line 8 in columns (a) through

If only the adjusted seasonal installment

determining any penalty due on

(d) unless the partnership uses the

method (Part II) is used, complete Parts II

Schedule A (Form 8804).

annualized income installment method or

and IV. If only the annualized income

the adjusted seasonal installment method.

installment method (Part III) is used,

If the partnership begins using the prior

complete Parts III and IV. If both methods

year safe harbor method and it determines

Annualized income installment method

are used, complete all three parts. Enter in

later in the tax year (based upon the

and/or adjusted seasonal installment

each column on line 10 the amounts from

standard option annualization method

method. If the partnership's ECTI is

DRAFT AS OF

the corresponding column of line 42.

described later in these instructions) that it

expected to vary during the year because,

will not meet the 50% of ECTI requirement

for example, it operates its business on a

Do not figure any required

described in the last bulleted item above,

seasonal basis, it may be able to lower the

installment until after the end of

it may make all subsequent installment

amount of one or more required

the month preceding the due date

payments using the standard option

CAUTION

installments by using the annualized

for that installment.

annualization method and it will not be

income installment method and/or the

September 19, 2012

subject to the penalty determined on

adjusted seasonal installment method. For

Extraordinary items. Generally, under

Schedule A (Form 8804). This change in

the annualized income installment

example, a ski shop, which receives most

method must be disclosed in a statement

method, extraordinary items must be

of its income during the winter months,

attached to the Form 8804 the partnership

may be able to benefit from using one or

taken into account after annualizing the

files for the current tax year and the

both of these methods in figuring one or

ECTI for the annualization period. Similar

statement must include enough

more of its required installments.

rules apply in determining ECTI under the

information to allow the IRS to determine

adjusted seasonal installment method. An

To use one or both of these methods,

whether the change was appropriate.

extraordinary item includes:

complete Part II and/or Part III of the form.

If the partnership begins using the prior

If those Parts are used for any payment

Any item identified in Regulations

year safe harbor method and switches to

date, those Parts must be used for all

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

the current year safe harbor (because the

subsequent payment due dates. To arrive

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

partnership does not qualify for the relief

at the amount of each required

A section 481(a) adjustment; and

described in the previous paragraph (i.e.,

installment, Part IV automatically selects

Net gain or loss from the disposition of

using the standard option annualization

the smallest of (a) the annualized income

25% or more of the fair market value of the

method) or the partnership chooses not to

installment (if applicable), (b) the adjusted

partnership's business assets during the

continue using it), in order to avoid an

seasonal installment (if applicable), or (c)

tax year.

underpayment penalty with respect to the

the current year safe harbor (increased by

These extraordinary items must be

current installment payment, the

any recapture of a reduction in a required

accounted for in the appropriate

partnership must pay the sum of (a) the

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

annualization period. However, a section

current installment payment based on the

Line 11

481(a) adjustment (unless the partnership

current year safe harbor, plus (b) the sum

makes the alternative choice under

Include on line 11 any 2012 overpayment

of the amount by which the current year

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

safe harbor exceeds the prior year safe

that the partnership chose to credit

is treated as an extraordinary item

harbor amount paid in for each prior

against its 2013 tax. The overpayment is

occurring on the first day of the tax year in

installment period during which it qualified

credited against unpaid required

which the item is taken into account in

for the prior year safe harbor.

installments in the order in which the

determining ECTI.

installments are required to be paid.

Line 8

For more information regarding

Also include on line 11 any:

extraordinary items, see Regulations

Enter the smaller of line 6 or line 7.

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

However, if, for any installment payment,

Section 1446 tax withheld and paid by

examples in Regulations section

line 6 is smaller than line 7 and you enter

another partnership because the

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

that smaller line 6 amount on line 8, you

partnership preparing this Form 8804-W

section 1.6655-3(d)(3).

will not qualify for the prior year safe

was a partner in that partnership during

harbor when determining any penalty due

the tax year. See the instructions for Form

De minimis rule. Extraordinary items

on Schedule A (Form 8804) (see the line 7

8804, line 6b, in the Instructions for Forms

identified above resulting from a particular

instructions, earlier). Therefore, in that

8804, 8805, and 8813.

transaction that total less than $1 million

case, for any subsequent installment

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

(other than a section 481(a) adjustment)

payment during the tax year, do not use

withheld from or paid by the partnership

may be annualized using the general rules

the line 7 amount.

filing this Form 8804-W during the tax year

of Regulations section 1.6655-2(f), or, if

for a disposition of a U.S. real property

the partnership chooses, may be taken

Line 9—Installment Due Dates

interest. See the instructions for Form

into account after annualizing the ECTI for

Calendar-year taxpayers. Enter

8804, line 6c, in the Instructions for Forms

the annualization period.

4-15-2013, 6-17-2013, 9-16-2013, and

8804, 8805, and 8813.

Part II—Adjusted Seasonal

12-16-2013, respectively, in columns (a)

The partnership generally enters these

through (d).

Installment Method

amounts in the column that corresponds

Fiscal-year taxpayers. Enter the 15th

to the installment period for which these

Note. Part II does not reflect the lower

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

amounts were paid or withheld. However,

preferential rates permitted under

of the partnership's tax year in columns (a)

if the partnership learns about the

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

through (d). If the regular due date falls on

payments or withholding in a subsequent

were omitted because, for most taxpayers,

a Saturday, Sunday, or legal holiday, enter

installment period, the partnership may

the income reported in Part II will be

the next business day.

claim them in that period.

predominantly (or exclusively) ordinary

income. If the partnership wishes to

consider lower preferential rates for Part II

Instructions for Form 8804-W (2013)

-2-

Instructions Draft For Form 8804-W - Installment Payments Of Section 1446 Tax For Partnerships - 2013 Page 3

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