Schedule B-1 (Form 1065) (Rev. 9-2017)
Page 2
General Instructions
Section references are to the Internal Revenue Code unless
otherwise noted.
Future Developments
For the latest information about developments related to
Schedule B-1 (Form 1065) and its instructions, such as
legislation enacted after the form and instructions were
published, go to www.irs.gov/Form1065.
Purpose of Form
Use Schedule B-1 (Form 1065) to provide the information
applicable to certain entities, individuals, and estates that own,
directly or indirectly, an interest of 50% or more in the profit,
loss, or capital of the partnership.
Who Must File
Schedule B-1 (Form 1065) must be filed by all partnerships that
answer “Yes” to question 3a or question 3b on Schedule B of
Form 1065. Attach Schedule B-1 to Form 1065.
Specific Instructions
Part I
Complete Part I if the partnership answered “Yes” to Form
1065, Schedule B, question 3a. List each corporation,
partnership, trust, tax-exempt organization, or foreign
government owning, directly or indirectly, an interest of 50% or
more in the profit, loss, or capital of the partnership at the end
of the tax year. Enter the name, EIN, type of entity (corporation,
partnership, trust, tax-exempt organization, or foreign
government), country of organization, and the maximum
percentage interests owned, directly or indirectly, in the profit,
loss, or capital of the partnership. For an affiliated group filing a
consolidated tax return, list the parent corporation rather than
the subsidiary members. List the entity owner of a disregarded
entity rather than the disregarded entity. If the owner of a
disregarded entity is an individual rather than an entity, list the
individual in Part II. In the case of a tax-exempt organization,
enter “tax-exempt organization” in column (iii).
Example 1. Corporation A owns, directly, an interest of 50%
in the profit, loss, or capital of Partnership B. Corporation A
also owns, directly, an interest of 15% in the profit, loss, or
capital of Partnership C. Partnership B owns, directly, an
interest of 70% in the profit, loss, or capital of Partnership C.
Therefore, Corporation A owns, directly or indirectly, an
interest of 50% in the profit, loss, or capital of Partnership C
(15% directly and 35% indirectly through Partnership B). On
Partnership C’s Form 1065, it must answer “Yes” to question
3a of Schedule B. Partnership C must also complete Part I of
Schedule B-1. In Part I, Partnership C must identify Corporation
A, which includes entering “50%” in column (v) (its maximum
percentage owned). It also must identify Partnership B, and
enter “70%” in column (v).
Part II
Complete Part II if the partnership answered “Yes” to Form
1065, Schedule B, question 3b. List each individual or estate
owning, directly or indirectly, an interest of 50% or more in the
profit, loss, or capital of the partnership at the end of the tax
year. Enter the name, social security or employer identification
number, country of citizenship (for an estate, the citizenship of
the decedent), and the maximum percentage interests owned,
directly or indirectly, in the profit, loss, or capital of the
partnership.
Example 2. A owns, directly, 50% of the profit, loss, or capital
of Partnership X. B, the daughter of A, does not own, directly,
any interest in X and does not own, indirectly, any interest in X
through any entity (corporation, partnership, trust, or estate).
Because family attribution rules apply only when an individual
(in this example, B) owns a direct interest in the partnership or
an indirect interest through another entity, A’s interest in
Partnership X is not attributable to B. On Partnership X’s Form
1065, it must answer “Yes” to question 3b of Schedule B.
Partnership X must also complete Part II of Schedule B-1. In
Part II, Partnership X must identify A, which includes entering
“50%” in column (iv). Partnership X will not identify B in Part II.
