Category 1 filer.

A Category 1 filer is a U.S. person who controlled the foreign partnership at any time during the partnership's tax year. Control of a partnership is ownership of more than a 50% interest in the partnership. See the definition of 50% interest, later. There may be more than one Category 1 filer for a partnership for a particular partnership tax year. See U.S. person and Foreign partnership, later.

A Category 1 filer also includes a U.S. transferor who must report certain information for a section 721(c) partnership for the tax year of contribution and subsequent years, pursuant to Regulations section 1.721(c)-6. A Category 1 filer fulfills this reporting requirement by filing Schedule G and, in certain circumstances, Schedule H. See Section 721(c) partnership and U.S. transferor, later.

Category 2 filer.

A Category 2 filer is a U.S. person who at any time during the tax year of the foreign partnership owned a 10% or greater interest in the partnership while the partnership was controlled by U.S. persons each owning at least a 10% interest. However, if the foreign partnership had a Category 1 filer at any time during that tax year, no person will be considered a Category 2 filer. See the definition of a 10% interest, later.

Category 3 filer.

A Category 3 filer is a U.S. person who contributed property during that person's tax year to a foreign partnership in exchange for an interest in the partnership (a section 721 transfer), if that person either:

If a domestic partnership contributes property to a foreign partnership, the domestic partnership's partners are considered to have transferred a proportionate share of the contributed property to the foreign partnership. However, if the domestic partnership files Form 8865 and properly reports all the required information for the contribution, its partners will not be required to report the transfer.

A Category 3 filer includes a U.S. transferor who (a) contributes section 721(c) property to a section 721(c) partnership, and (b) has reporting requirements pursuant to Regulations section 1.721(c)-6(b)(2). The Category 3 filer fulfills this reporting requirement by filing Schedule G, in addition to Schedule O, and, in certain circumstances, Schedule H. See Section 721(c) property, later.

Category 3 also includes a U.S. person that previously transferred appreciated property to the partnership and was required to report that transfer under section 6038B, if the foreign partnership disposed of such property while the U.S. person remained a direct or indirect partner in the partnership.

Category 4 filer.

A Category 4 filer is a U.S. person that had a reportable event under section 6046A during that person's tax year. There are three categories of reportable events under section 6046A: acquisitions, dispositions, and changes in proportional interests.

Multiple Category 1 filers.

If during the tax year of the partnership more than one U.S. person qualifies as a Category 1 filer, only one of these Category 1 partners is required to file Form 8865. A U.S. person with a controlling interest in the losses or deductions of the partnership isn’t permitted to be the filer of Form 8865 if another U.S. person has a controlling interest in capital or profits; only the latter may file the return. The U.S. person that files the Form 8865 must complete item F on page 1.

The single Form 8865 to be filed must contain all of the information that would be required if each Category 1 filer filed a separate Form 8865. Specifically, separate Schedules N, K-1, and K-3 (if applicable) must be attached to the Form 8865 for each Category 1 filer. Also, items B, C, and D on page 1 and Schedule A on page 2 of Form 8865 must be completed for each Category 1 filer not filing the form. Attach a separate statement listing this information to the single Form 8865.

A Category 1 filer not filing Form 8865 must attach a statement entitled “Controlled Foreign Partnership Reporting” to that person's income tax return.

The statement must include the following information.

Constructive owners.

See Constructive ownership, later. A Category 1 or 2 filer that doesn’t own a direct interest in the partnership and that is required to file this form solely because of constructive ownership from a U.S. person(s) isn’t required to file Form 8865 if:

To qualify for the constructive ownership filing exception, the indirect partner must file with its income tax return a statement entitled “Controlled Foreign Partnership Reporting.”

This statement must contain the following information.

Members of an affiliated group of corporations filing a consolidated return.

If one or more members of an affiliated group of corporations filing a consolidated return qualify as Category 1 or 2 filers for a particular foreign partnership, the common parent corporation may file one Form 8865 on behalf of all of the members of the group required to report. Except for group members who also qualify under the constructive owners exception, the Form 8865 must contain all the information that would have been required to be submitted if each group member filed its own Form 8865.

Exception for certain trusts.

Trusts relating to state and local government employee retirement plans that otherwise would have Forms 8865 reporting requirements with regard to foreign partnerships aren’t required to file Form 8865.

Exception for certain Category 4 filers.

If you qualify as a Category 3 and 4 filer because you contributed property to a foreign partnership in exchange for a 10% or greater interest in that partnership, you aren’t required to report this transaction under both Category 3 and 4 filing requirements. If you properly report the contribution of property under the Category 3 rules, you aren’t required to report it as a Category 4 filer. However, the acquisition will count as a reportable event to determine if a later change in your partnership interest qualifies as a reportable event under Category 4.

Partnership.

A partnership is the relationship between two or more persons who join to carry on a trade or business, with each person contributing money, property, labor, or skill and each expecting to share in the profits and losses of the business whether or not a formal partnership agreement is made.

The term “partnership” includes a limited partnership, syndicate, group, pool, joint venture, or other unincorporated organization, through or by which any business, financial operation, or venture is carried on, that isn’t, within the meaning of the regulations under section 7701, a corporation, trust, estate, or sole proprietorship.

A joint undertaking merely to share expenses isn’t a partnership. Mere co-ownership of property that is maintained and leased or rented isn’t a partnership. However, if the co-owners provide services to the tenants, a partnership exists.

Foreign partnership.

A foreign partnership is a partnership that isn’t created or organized in the United States or under the law of the United States or of any state or the District of Columbia. If a domestic section 721(c) partnership is formed on or after January 18, 2017, and the gain deferral method is applied, then the section 721(c) partnership is treated as a foreign partnership for purposes of Form 8865 and these instructions. See Regulations section 1.721(c)-6(b)(4).

Section 721(c) partnership.

A partnership (domestic or foreign) is a section 721(c) partnership if there is a contribution of section 721(c) property to the partnership and, after the contribution (and all transactions related to the contribution), (a) a related foreign person with respect to the U.S. transferor is a direct or indirect partner in the partnership; and (b) the U.S. transferor and related persons own 80% or more of the interests in partnership capital, profits, deductions, or losses. See Regulations section 1.721(c)-1(b)(14).

U.S. transferor.

A U.S. transferor is a U.S. person other than a domestic partnership. See Regulations section 1.721(c)-1(b)(18).

Section 721(c) property.

Section 721(c) property is property (other than excluded property) with built-in gain that is contributed to a partnership by a U.S. transferor, including pursuant to a contribution described in Regulations section 1.721(c)-2(d) (partnership look-through rule). See Regulations section 1.721(c)-1(b)(15).

Gain deferral contribution.

A gain deferral contribution is a contribution of section 721(c) property to a section 721(c) partnership for which the recognition of gain is deferred under the gain deferral method. See Regulations section 1.721(c)-1(b)(7).

Gain deferral method.

The gain deferral method is the method described in Regulations section 1.721(c)-3(b) applied to avoid the immediate recognition of gain upon a contribution of section 721(c) property to a section 721(c) partnership under Regulations section 1.721(c)-2(b).

50% interest.

A 50% interest in a partnership is an interest equal to:

10% interest.

A 10% interest in a partnership is an interest equal to:

Constructive ownership.

For purposes of determining an interest in a partnership, the constructive ownership rules of section 267(c) (excluding section 267(c)(3)) apply, taking into account that such rules refer to corporations and not to partnerships. Generally, an interest owned directly or indirectly by or for a corporation, partnership, estate, or trust shall be considered as being owned proportionately by its owners, partners, or beneficiaries.

Also, an individual is considered to own an interest owned directly or indirectly by or for their family. The family of an individual includes only that individual's spouse, siblings, ancestors, and lineal descendants. An interest will be attributed from a nonresident alien individual under the family attribution rules only if the person to whom the interest is attributed owns a direct or indirect interest in the foreign partnership under section 267(c)(1) or (5).

U.S. person.

A U.S. person is a citizen or resident of the United States, a domestic partnership, a domestic corporation, and any estate or trust that isn’t foreign. See section 7701(a)(30).

Control of a corporation.

For purposes of Schedule N, control of a corporation is ownership of stock possessing more than 50% of the total combined voting power, or more than 50% of the total value of shares of all classes of stock of the corporation. For rules concerning indirect ownership and attribution, see Regulations section 1.6038-2(c).

Change in a proportional interest.

A partner's proportional interest in a foreign partnership can change as a result of changes in other partners' interests, for example, when another partner withdraws from the partnership. A partner's proportional interest can also change, for example, by operation of the partnership agreement (for example, if the partnership agreement provides that a partner's interest in profits will change on a set date or when the partnership has earned a specified amount of profits, then the partner's proportional interest changes when the set date or specified amount of profits is reached).

Failure to timely submit all information required of Category 1 and 2 filers.

Additionally, any person that files under the constructive owners exception may be subject to these penalties if all the requirements of the exception aren’t met. Any person required to file Form 8865 who doesn’t file under the multiple Category 1 filers exception may be subject to the above penalties if the other person doesn’t file a correctly completed form and schedules. See Exceptions to Filing, earlier.

Failure to file information required of Category 3 filers.

Any person that fails to properly report a contribution to a foreign partnership that is required to be reported under section 6038B and the regulations under that section is subject to a penalty equal to 10% of the fair market value (FMV) of the property at the time of the contribution. This penalty is subject to a $100,000 limit, unless the failure is due to intentional disregard. In addition, the transferor must recognize gain on the contribution as if the contributed property had been sold for its FMV. See section 6038B for the exception due to reasonable cause.

Failure to file information required of Category 4 filers.

Any person who fails to properly report all the information requested by section 6046A is subject to a $10,000 penalty, in addition to the section 7203 criminal penalty, unless it is shown that such failure is due to reasonable cause. If the failure continues for more than 90 days after the IRS mails notice of the failure, an additional $10,000 penalty will apply for each 30-day period (or fraction thereof) during which the failure continues after the 90-day period has expired. The additional penalty shall not exceed $50,000.

Treaty-based return positions.

File Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), to report a return position that a treaty of the United States (such as an income tax treaty; an estate and gift tax treaty; or a friendship, commerce, and navigation treaty):

Failure to make such a report may result in a $1,000 penalty ($10,000 in the case of a C corporation). See section 6712.

Section 6662(j).

Penalties may be imposed for underpayment attributable to undisclosed foreign financial asset understatements. The term “undisclosed foreign financial asset” for any tax year includes any asset for which required information was not provided. An "undisclosed foreign financial asset understatement" means for any tax year, the portion of the understatement for that tax year which is attributable to any transaction involving an undisclosed foreign financial asset. No penalty will be imposed for any portion of an underpayment if the taxpayer can demonstrate that the failure to comply was due to reasonable cause for such portion of the underpayment and the taxpayer acted in good faith for such portion of the underpayment. See sections 6662(j) and 6664(c) for additional information.

Foreign address.

Enter the information in the following order: city or town, state or province, and country. Follow the country's practice for entering the postal code, if any. Don’t abbreviate the country name.

Information about certain partners.

If you are reporting information about other persons under the multiple Category 1 filers exception, or are reporting information about members of your affiliated group of corporations under the consolidated return exception (see Exceptions to Filing, earlier), identify each such person in item F. List their names, addresses, and identifying numbers. Also, indicate whether each person is a Category 1 filer or Category 2 filer, and whether such person constructively owned an interest in the foreign partnership during the tax year of the partnership listed at the top of Form 8865, page 1. See Constructive ownership, earlier.

If the foreign partnership filed Form 1065.

Enter the business code number (principal business activity code) shown in item C of the Form 1065 filed by the partnership.

If the foreign partnership did not file Form 1065.

Enter the applicable principal business activity code from Codes for Principal Business Activity and Principal Product or Service at the end of these instructions. If the information necessary to apply the total receipts test is not available, pick a principal business activity code using the information you have about the partnership.

Hyperinflationary exception.

A partnership that has a hyperinflationary currency as its functional currency is subject to special rules set forth in Regulations section 1.985-3. Generally, under these rules, a partnership must use the U.S. dollar as its functional currency.

Filer.

Don’t sign Form 8865 if you are filing it as an attachment to your income tax return. Sign the return only if you are filing Form 8865 separately because you aren’t required to file a U.S. income tax return. See When and Where To File, earlier, for more information.

Paid preparer.

Don’t sign Form 8865 or complete the paid preparer section at the bottom of the form if Form 8865 is filed as an attachment to an income tax return. Sign Form 8865 and complete the paid preparer section only if Form 8865 is filed separately.

Column 4. Section 197(f)(9) property.

Check the box for the reportable section 721(c) property if the property is an intangible described in section 197(f)(9).

Column 5. Effectively connected income property.

Check the box for the reportable section 721(c) property if (a) all distributive shares of income and gain with respect to the property for all direct and indirect partners that are related foreign persons for the U.S. transferor will be subject to taxation as income effectively connected with a trade or business within the United States (under section 871 or 882), and (b) neither the section 721(c) partnership nor a related foreign person that is a direct or indirect partner in the partnership claims benefits under an income tax convention that would exempt the income or gain from tax or reduce the rate of taxation to which the income or gain is subject. See Regulations sections 1.721(c)-3(b)(1)(ii) and 1.721(c)-6(c)(1).

Column 6(a). Fair market value.

Enter the FMV of the reportable section 721(c) property, measured as of the date of contribution.

Column 6(b). Basis.

Enter the adjusted tax basis of the reportable section 721(c) property on the date of the contribution. See sections 1011 through 1016 for more information for the determination of adjusted tax basis.

Column 7. Events.

Check the box for each of columns 7(a) through 7(e) which describes an event that occurred during the tax year for the reportable section 721(c) property. If a box is checked for any reportable section 721(c) property listed, check “Yes” on the corresponding line in Part V of Schedule G and complete Schedule H. See the Part V instructions below.

Column (a). Remaining built-in gain at beginning of tax year.

For a reportable section 721(c) property, enter the amount of remaining built-in gain at the beginning of the tax year. If the property was contributed in the current tax year, enter the property’s built-in gain on the date of the contribution (Part I, column 6(c)).

Column (b). Remaining built-in gain at end of tax year.

For a reportable section 721(c) property, enter the amount of remaining built-in gain at the end of the tax year, figured under the gain deferral method.

Column (c). Remedial income allocated to the U.S. transferor.

For a reportable section 721(c) property, enter the remedial income allocated to the U.S. transferor under the remedial allocation method. When the gain deferral method applies to a section 721(c) property, the partnership must use the remedial allocation method described in Regulations section 1.704-3(d) for the property. See Regulations section 1.721(c)-3(b)(1)(i)(A).

Column (d). Gain recognized due to acceleration event.

For a reportable section 721(c) property, enter the amount of built-in gain taken into account by reason of an acceleration event or partial acceleration event. See Regulations sections 1.721(c)-4 and 1.721(c)-5 for events constituting an acceleration event or partial acceleration event and for the consequences of such events.

Column (e). Gain recognized due to section 367 transfer.

For a reportable section 721(c) property, enter the amount of gain recognized by the U.S. transferor pursuant to Regulations section 1.721(c)-5(e) (regarding transfers, including indirect transfers, described in section 367 of section 721(c) property to a foreign corporation). Gain recognized under section 367 should not be included in column 5. Instead, column 5 should list only the amount of gain recognized pursuant to Regulations section 1.721(c)-5(e) (requiring the U.S. transferor to recognize an amount of gain equal to the remaining built-in gain (if any) that would have been allocated to the U.S. transferor if the partnership had sold the remaining portion of the property immediately before the transfer for FMV).

Lines 1 through 6b.

If the answer is “Yes” to any of the questions on lines 1 through 6b of Part V, also complete and attach Schedule H (Form 8865). See the separate instructions later for Schedule H. In addition, the corresponding checkboxes in Part I, columns 7(a) through 7(e), should be marked, as applicable.

Line 7a.

If the answer is “Yes,” attach to Form 8865 a copy of the waiver of treaty benefits for the reportable section 721(c) property. See Regulations sections 1.721(c)-6(b)(2)(iii) and 1.721(c)-6(c).

Information to be reported.

When providing any information in Part VI, indicate the Part, Part column, and line for which the information is provided.

Acceleration event.

An acceleration event is any event that either would reduce the amount of the remaining built-in gain that a U.S. transferor would have recognized under the gain deferral method if the event had not occurred or could defer the recognition of the remaining built-in gain. Acceleration events are applicable on a property-by-property basis. An acceleration event includes the transfer of section 721(c) property by making a contribution of the property itself to another partnership or the contribution of an interest in a section 721(c) partnership to another partnership. When an acceleration event occurs for a section 721(c) property, the U.S. transferor must recognize gain in an amount equal to remaining built-in gain in the property that would have been allocated to the U.S. transferor if the section 721(c) partnership had sold the section 721(c) property immediately before the acceleration event for FMV. Following the event, the gain deferral method no longer applies to that section 721(c) property. See Regulations section 1.721(c)-4 for rules relating to acceleration events.

At any time, a U.S. transferor may affirmatively treat an acceleration event as having occurred (a deemed acceleration event) for a section 721(c) property by both recognizing the remaining built-in gain in that section 721(c) property and satisfying the reporting requirements of the acceleration event. See Regulations section 1.721(c)-4(b)(4).

Column (a).

Provide a description of the disposition of the interest in the partnership, including whether the interest was a direct or indirect interest (through one or more partnerships). If more than one taxable disposition event occurs in the tax year, provide the required information for each event separately in Part IV in chronological date order. If additional space is needed, provide the information in Part VI.

Column (c).

Enter the percentage of partnership interest that was disposed of in the event to which all gain or loss, if any, is recognized.

Column (d).

Enter the percentage of the partnership interest (directly or indirectly through one or more partnerships) that the U.S. transferor retained immediately after the event.

Column (e).

Enter the aggregate amount of the remaining built-in gain for all of the section 721(c) properties that is attributable to the portion of the interest in the section 721(c) partnership that is retained. Attach a detailed supporting schedule to Schedule H that separately states each remaining section 721(c) property and its respective remaining built-in gain allocable to the U.S. transferor included in the aggregate amount reported in column (e).

Column (b).

Provide a description of the section 367 transfer, including whether the transfer was a direct or indirect transfer (through one or more partnerships) of section 721(c) property to a foreign corporation. If more than one section 367 transfer occurs in the tax year, provide the required information for each transfer separately in Part IV in chronological date order. If additional space is needed, provide the information in Part VI.

Column (d).

Enter the amount of the remaining portion of built-in gain recognized by the U.S. transferor under section 721(c). The amount of gain equals the remaining portion of the built-in gain that would have been allocated to the U.S. transferor if the section 721(c) partnership had sold that portion of the section 721(c) property immediately before the transfer for FMV. This amount should not include any gain or income recognized by the U.S. transferor pursuant to section 367 that is reported elsewhere on the return. See Regulations section 1.721(c)-5(e). After the section 367 transfer, the transferred section 721(c) property will no longer be subject to the gain deferral method.

Column (e).

Enter the identifying information of the foreign transferee corporation that received the section 721(c) property in the section 367 transfer. The identifying information includes the name, address, and U.S.TIN, if any.

Information to be reported.

When providing any information in the Supplemental Information, indicate the Part, Part column, row, and line for which the information is provided.

Schedule K-1 (Form 8865) for related foreign partners.

If the gain deferral method is applied and a section 721(c) partnership doesn’t have a filing obligation under section 6031, the U.S. transferor must obtain a Schedule K-1 (Form 8865) for each direct or indirect partner that is related to the U.S. transferor (within the meaning of section 267(b) or 707(b)(1)) and that isn’t a U.S. person (related foreign partner). See Regulations section 1.721(c)-6(c)(3). The Schedule K-1 (Form 8865) for each related foreign partner must be filed and attached to the Form 8865 as part of the annual reporting relating to the gain deferral method pursuant to Regulations section 1.721(c)-6(b)(3)(xi). The instructions that apply to Schedule K-1 (Form 8865) for all other partners also apply to a Schedule K-1 (Form 8865) for a related foreign partner. See Gain deferral method, Section 721(c) partnership, and U.S. transferor, earlier.

Part III—line 1.

If the gain deferral method is applied to which the section 721(c) partnership adopts the remedial allocation method, the amounts reflected on each partner's Schedule K-1 for the allocations of income, gains, losses, deductions, or credits allocated to such partner must include any allocations of remedial items for section 721(c) property. See Regulations section 1.721(c)-3(c).

For example, if the partner is the U.S. transferor of section 721(c) property, Part III, line 1, would include any remedial income allocated to the U.S. transferor from Schedule G, Part II, column (c), Remedial income allocated to U.S. transferor, as applicable. For partners other than the transferor, Part III, line 1, would include their share of ordinary business income (or loss) after taking into account any remedial items to such partner relating to section 721(c) property. However, Part III, line 1, would not include basis adjustments attributable to section 197(f)(9) for related foreign partners. See Regulations sections 1.704-3(d)(5)(iii) and 1.721(c)-3. See Section 721(c) partnership, Section 721(c) property, and Gain deferral method, earlier.

Codes.

In box 11 and boxes 13 through 21, identify each item by entering a code in the column to the left of the dollar amount entry space. These codes are identified in List of Codes Used for Schedule K-1 (Form 8865) , later. For Box 11—Code ZZ. Other, see Other code ZZ in the Instructions for Form 1065.

Attached statements.

When attaching statements to Schedule K-1 to report additional information to the partner, indicate there is a statement for the following.

More than one attached statement can be placed on the same sheet of paper. The information included in the statement should be identified in alphanumeric order by box number followed by the letter code (if any), description, and dollar amount for each item. For example: “Box 15, code J—Work opportunity credit—$1,000.” This can be followed with any additional information the partner needs to determine the proper tax treatment of the item.

Column (a).

Enter the date of the transfer. If the transfer was composed of a series of transactions over multiple dates, enter the date the transfer was completed.

Column (b).

Enter the description of the property transferred.

Column (c).

Enter the FMV of the property contributed (measured as of the date of the transfer).

Column (d).

Enter your adjusted basis in the property contributed on the date of the transfer. See sections 1011 through 1016 for more information on the determination of adjusted basis.

Column (f).

If you contributed appreciated property, enter the method (traditional, traditional with curative allocations, or remedial) used by the partnership to make section 704(c) allocations for each item of property. See Regulations sections 1.704-3(b), (c), and (d) for more information on these allocation methods. If the gain deferral method is applied, the remedial method must generally be used. See Regulations section 1.721(c)-3(b)(1)(i). For an exception for certain property generating effectively connected income, see Regulations section 1.721(c)-3(b)(1)(ii).

Column (g).

Enter the amount of gain, if any, recognized on the transfer. See sections 721(b) and 904(f)(3), and Regulations section 1.721(c)-2.

Line 3.

Enter your capital interests, by percentage, in the partnership immediately before and after the transfer. To the extent your capital interest in the partnership immediately before the transfer differs from any of your profit, loss, or deduction interests in the partnership at that time, enter in the supplemental information below your interests, by percentage, in the profit, loss, and deductions at that time. To the extent your capital interest in the partnership immediately after the transfer differs from any of your profit, loss, or deduction interests in the partnership at that time, enter in the supplemental information below your interests, by percentage, in the profit, loss, and deductions at that time.

Supplemental information required to be reported.

Enter any information from Part I that is required to be reported in greater detail. Identify the applicable column number next to the information entered in this section. In addition, if you contributed property to a foreign partnership as part of a wider transaction, briefly describe the entire transaction.

Column (a).

Provide a brief description of the property disposed of by the partnership. If you are reporting the disposition of substituted basis property received by the partnership in a nonrecognition transaction in exchange for appreciated property contributed by you, enter “See Attached” and attach a statement providing brief descriptions of both the property contributed by you to the partnership and the substituted basis property received by the partnership in exchange for that property.

Column (b).

Enter the date that you transferred this property to the partnership. If you are reporting the disposition of substituted basis property received by the partnership in a nonrecognition transaction in exchange for property previously contributed by you, enter “See Attached” and attach a statement showing both the date you transferred the appreciated property to the partnership and the date the partnership exchanged the property for substituted basis property in a nonrecognition transaction. See Regulations section 1.6038B-2.

Column (c).

Enter the date that the partnership disposed of the property.

Column (d).

Briefly describe how the partnership disposed of the property (for example, by sale or exchange).

Column (e).

Enter the amount of gain, if any, recognized by the partnership on the disposition of property.

Column (f).

Enter the amount of depreciation recapture, if any, recognized by the partnership on the disposition of property. See Regulations sections 1.1245-1(e) and 1.1250-1(f).

Column (g).

Enter the amount of gain from column (e) allocated to you.

Column (h).

Enter the amount of depreciation recapture from column (f) allocated to you. See Regulations sections 1.1245-1(e) and 1.1250-1(f). If you recognize any section 1254 recapture on the partnership's disposition of natural resource recapture property, enter “See Attached” and attach a statement figuring the amount of recapture. See Regulations section 1.1254-5.

Column (a).

If you acquired the interest in the foreign partnership by purchase, gift, or inheritance, or in a distribution from a trust, estate, partnership, or corporation, enter the name, address, and identifying number (if any) of the person from whom you acquired the interest.

Column (b).

Enter the date of the acquisition. If the acquisition was composed of a series of transactions over multiple dates, enter the date the acquisition was completed.

Column (c).

Enter the FMV of the interest you acquired in the partnership (measured as of the date of acquisition).

Column (d).

Enter your basis in the acquired partnership interest (measured as of the date of acquisition). See sections 722 and 742.

Columns (e) and (f).

Enter your total direct percentage interest in the partnership both before and immediately after the acquisition. To the extent your direct percentage interest in the partnership differs among capital, profits, losses, or deductions, enter “See Below” and state the different percentages in Part IV.

Column (a).

Unless you disposed of the interest by withdrawing, in whole or in part, from the partnership, enter the name, address, and identifying number (if any) of the person to whom you transferred the interest in the foreign partnership.

Column (b).

Enter the date of the disposition. If the disposition was composed of a series of transactions over multiple dates, enter the date the disposition was completed.

Column (c).

Enter the FMV of the interest you disposed of in the partnership (measured as of the date of disposition). If you recognized gain or loss on the disposition, state the amount of gain or loss in Part IV. See section 741.

Column (d).

Enter your adjusted basis in the partnership interest disposed of immediately before the disposition. See section 705.

Columns (e) and (f).

Enter your total direct percentage interest in the partnership both before and immediately after the disposition. To the extent your percentage interest in the partnership differs among capital, profits, losses, or deductions, enter “See Below” and state the different percentages in Part IV.

Column (a).

Briefly describe the event that caused your interest in the partnership to change (for example, the admission of a new partner).

Column (b).

Enter the date of the change. If the change resulted from a series of transactions over multiple dates, enter the date the change was completed.

Column (c).

Enter the FMV of your interest in the partnership immediately before the change.

Column (d).

Enter your basis in your partnership interest immediately before the change.

Columns (e) and (f).

Enter your direct percentage interest in the partnership both before and immediately after the change. To the extent your percentage interest in the partnership differs among capital, profits, losses, or deductions, enter “See Below” and state the different percentages in Part IV.