Fill - Free fillable F8308 Form 8308 (Rev. September 2018) PDF form

Form 8308

(Rev. September 2018)

Department of the Treasury

Internal Revenue Service

Report of a Sale or Exchange of

Certain Partnership Interests

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Go to www.irs.gov/Form8308 for the latest information.

OMB No. 1545-0123

Name of partnership Phone number Employer identification number

Number, street, and room or suite no. If a P.O. box, see instructions.

City or town, state or province, country, and ZIP or foreign postal code

Part I

Transferor Information (Beneficial owner of the partnership interest immediately before the transfer of that

interest)

Name Identifying number

Number and street (including apt. no.)

City or town, state or province, country, and ZIP or foreign postal code

Notice to Transferors: The information on this form has been supplied to the Internal Revenue Service. The transferor in a section 751(a)

exchange is required to treat a portion of the gain realized from the exchange as ordinary income. For more details, see Pub. 541, Partnerships.

Statement by Transferor: The transferor in a section 751(a) exchange is required under Regulations section 1.751-1(a)(3) to attach a

statement relating to the sale or exchange to his or her return. See Instructions to Transferors for more details.

Part II

Transferee Information (Beneficial owner of the partnership interest immediately after the transfer of that

interest)

Name Identifying number

Number and street (including apt. no.)

City or town, state or province, country, and ZIP or foreign postal code

Part III

Date of Sale or Exchange of Partnership Interest

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/ /

Sign here only if you

are filing this form by

itself and not with Form

1065

Under penalties of perjury, I declare that I have examined this return, including accompanying attachments, and to the best of my

knowledge and belief, it is true, correct, and complete.

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Signature of partnership representative or partner or limited liability company member

▲

Date

/ /

General Instructions

Section references are to the Internal

Revenue Code unless otherwise noted.

Purpose of form. Form 8308 is filed by a

partnership to report the sale or exchange

by a partner of all or part of a partnership

interest where any money or other property

received in exchange for the interest is

attributable to unrealized receivables or

inventory items (that is, where there has

been a section 751(a) exchange).

Who must file. A partnership must file a

separate Form 8308 for each section

751(a) exchange of an interest in such

partnership. See Regulations section

1.6050K-1.

Note: Form 8308 does not have to be filed

if, under section 6045, Form 1099-B,

Proceeds From Broker and Barter

Exchange Transactions, is required to be

filed with respect to the sale or exchange.

A partnership must file Form 8308 once

the partnership has notice of the section

751(a) exchange. The partnership has such

notice when either:

1. The partnership receives written

notification of the exchange from the

transferor that includes the names and

addresses of both parties to the exchange,

the identifying numbers of the transferor

and (if known) of the transferee, and the

date of the exchange; or

2. The partnership has knowledge that

there has been a transfer of a partnership

interest and, at the time of the transfer, the

partnership had any unrealized receivables

or inventory items.

No returns or statements are required

under section 6050K if the transfer was not

a section 751(a) exchange. For example, a

transfer which in its entirety constitutes a

gift for federal income tax purposes is not

a section 751(a) exchange.

A partnership may rely on a written

statement from the transferor that the

transfer was not a section 751(a) exchange

unless the partnership has knowledge to

the contrary. If a partnership is in doubt

whether partnership property constitutes

unrealized receivables or inventory items or

whether a transfer constitutes a section

751(a) exchange, the partnership may file

Form 8308 to avoid the risk of incurring a

penalty for failure to file.

When to file. Generally, file Form 8308 as

an attachment to Form 1065 for the tax

year of the partnership that includes the

last day of the calendar year in which the

section 751(a) exchange took place. Form

8308 is due at the time for filing the

partnership return, including extensions.

If, however, a partnership is notified of a

section 751(a) exchange after it has filed

its partnership return, file Form 8308

separately, within 30 days of notification,

with the service center where Form 1065

was filed.

Copies of Form 8308 to be furnished to

transferor and transferee. All

partnerships required to file Form 8308

must furnish a copy of the form to each

transferor and transferee by January 31 of

the year following the calendar year in

which the section 751(a) exchange

occurred or, if later, 30 days after the

partnership has notice of the exchange.

If the partnership does not know the

identity of the beneficial owner of an

interest in the partnership, the record

holder of the interest is treated as the

transferor or transferee.

Cat. No. 62503I

Form 8308 (Rev. 9-2018)

Page 2

Note: The transferor of the interest is

required to notify the partnership of the

exchange of the partnership interest

unless, under section 6045, Form 1099-B

is required to be filed.

Form 8308 must generally be prepared

prior to the time it must be attached to the

partnership return and sent to the IRS. This

will allow the timely furnishing of Forms

8308 to the transferor and transferee.

Instructions to Transferors

This form alerts transferors that they are

required to treat a portion of the gain

realized from a section 751(a) exchange as

ordinary income. For more details, see

Pub. 541.

Separate statement required by

transferor. The transferor is required by

Regulations section 1.751-1(a)(3) to attach

a statement to the transferor’s income tax

return for the tax year of the sale or

exchange with the following information.

1. The date of the sale or exchange.

2. The amount of any gain or loss

attributable to the section 751 property.

3. The amount of any gain or loss

attributable to capital gain or loss on the

sale of the partnership interest.

Instructions to Partnerships

Section 751(a) exchange. A section 751(a)

exchange occurs when money or any

property is exchanged for all or part of a

partnership interest that is attributable to

unrealized receivables or inventory items.

Generally, any sale or exchange of a

partnership interest (or any portion) at a

time when the partnership has any

unrealized receivables or inventory items is

a section 751(a) exchange.

Unrealized receivables. Unrealized

receivables, to the extent not previously

includible in income under the

partnership’s accounting method, are any

rights to payment for:

1. Goods delivered or to be delivered, to

the extent that the payment would be

treated as received for property other than

a capital asset; and

2. Services rendered or to be rendered.

Unrealized receivables also include the

amount of gain that would be ordinary

income if any of the following types of

partnership property were sold on the date

of the section 751(a) exchange.

• Mining property (section 617(f)(2)).

• Stock in an interest charge domestic

international sales corporation (section

992(a)).

• Farm recapture property or farm land

(section 1252(a)).

• Franchises, trademarks, or trade names

(section 1253(a)).

• Oil, gas, or geothermal property (section

1254).

• Stock of a controlled foreign corporation

(section 1248).

• Section 1245 property.

• Section 1245 recovery property.

• Section 1250 property.

• Market discount bonds (section 1278).

• Short-term governmental obligations

(section 1283).

• Other short-term obligations (section

1283(c)).

Inventory items. Inventory items are not

just stock in trade of the partnership. They

also include the following.

• Any properties that would be included in

inventory if on hand at the end of the tax

year or that are held primarily for sale to

customers in the normal course of

business.

• Any asset that is not a capital asset or is

not treated as a capital asset.

• Any other property held by the

partnership that would be considered

inventory if held by the transferor partner.

• Any trade receivables of accrual method

partnerships.

Tiered partnerships. In determining

whether partnership property is an

unrealized receivable or an inventory item,

the partnership is treated as owning its

proportionate share of the property of any

other partnership in which it is a partner.

See section 751(f).

Penalty for late filing of correct Form

8308. A penalty may be imposed for failing

to file each Form 8308 when due, including

extensions. The penalty may also be

imposed for failing to include all required

information on Form 8308 or for furnishing

incorrect information. The penalty is based

on when the partnership files a correct

Form 8308.

The penalty will not apply to any failure

that the partnership can show was due to

reasonable cause and not willful neglect.

For more details, see sections 6721 and

6724.

Penalty for failure to furnish correct

Forms 8308 to transferor and

transferee. A penalty may be imposed for

each failure to furnish when due a copy of

Form 8308 to either party to the exchange.

The penalty may also be imposed for each

failure to give the transferor or transferee all

required information on each Form 8308 or

for furnishing incorrect information. If the

partnership intentionally disregards the

requirement to report correct information,

each penalty is increased. The penalty will

not apply to any failure that the

partnership can show was due to

reasonable cause and not willful neglect.

See sections 6722 and 6724 for more

details.

Partnership address. Include the suite,

room, or other unit number after the street

address. If the Post Office does not deliver

mail to the street address and the

partnership has a P.O. box, show the box

number instead.

Paperwork Reduction Act Notice. We

ask for the information on this form to

carry out the Internal Revenue laws of the

United States. You are required to give us

the information. We need it to ensure that

you are complying with these laws and to

allow us to figure and collect the right

amount of tax.

You are not required to provide the

information requested on a form that is

subject to the Paperwork Reduction Act

unless the form displays a valid OMB

control number. Books or records relating

to a form or its instructions must be

retained as long as their contents may

become material in the administration of

any Internal Revenue law. Generally, tax

returns and return information are

confidential, as required by section 6103.

The time needed to complete and file

this form will vary depending on individual

circumstances. The estimated burden for

business taxpayers filing this form is

approved under OMB control number

1545-0123 and is included in the estimates

shown in the instructions for their business

income tax return.

If you have suggestions for making these

forms simpler, we would be happy to hear

from you. You can send us comments from

www.irs.gov/FormComments. You can

write to the Internal Revenue Service, Tax

Forms and Publications, 1111 Constitution

Ave. NW, IR-6526, Washington, DC 20224.

Do not send Form 8308 to this address.

Instead, see When to file on page 1.

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