Instructions for Form 8308

Instructions for Form 8308

(Rev. November 2025)

Use with the October 2024 revision of Form 8308

Report of a Sale or Exchange of Certain Partnership Interests

Section references are to the Internal Revenue Code unless

otherwise noted.

example, a transfer which in its entirety constitutes a gift for

federal income tax purposes isn’t a section 751(a) exchange.

Future Developments

A partnership may rely on a written statement from the

transferor that the transfer wasn’t 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.

For the latest information about developments related to

Form 8308 and its instructions, such as legislation enacted

after they were published, go to IRS.gov/Form8308.

What’s New

Change to requirement for providing transferors and

transferees with Part IV information. Partnerships are no

longer required to furnish to transferors and transferees by

January 31 the information in Part IV, Partner’s Share of Gain

(Loss) Required by Sections 751(a) and 1(h)(5) and (6).

However, partnerships still need to provide to transferors and

transferees by January 31 of the year following the tax year in

which the section 751(a) exchange occurred the information

in Parts I, II, and III. Form 8308 with all parts completed must

be filed with the partnership’s Form 1065.

When To File

Generally, file the completed Form 8308 (Parts I through IV)

as an attachment to Form 1065, U.S. Return of Partnership

Income, 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.

Situations That Require Filing Form 8308

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.

Untimely or incorrect reporting of section 751(a) exchange by a partner to a BBA partnership. If a BBA

partnership is notified of a section 751(a) exchange after it

has filed its partnership return (and the time for filing a

superseding return has expired) and the amount of section

751(a) gain wasn’t reported on the transferor partner’s

Schedule K-1 (Form 1065), or if the section 751(a) exchange

was incorrectly reported, then the partnership must file an

administrative adjustment request (AAR) and include Form

8308 as an attachment. See the instructions for Forms 8082

and 1065-X for more information on filing an AAR. For

additional information, go to IRS.gov/BBAAAR. If the

partnership is still permitted to file a superseding return, it

may do so rather than file an AAR, before the due date of the

return, including extensions.

Note: Form 8308 doesn’t 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.

Note: A superseding return is a subsequent return filed

within the same filing period as the original return (including

extensions). In contrast, an amended return is a subsequent

return filed after the extended due date of the original return.

General Instructions

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 Form 8308 once the partnership

has notice of the section 751(a) exchange. The partnership

has such notice when either of the following occurs.

• 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.

• 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 wasn’t a section 751(a) exchange. For

Nov 5, 2025

Untimely or incorrect reporting of section 751(a) exchange by partner to a non-BBA partnership. If a

non-BBA partnership is notified of a section 751(a) exchange

after it has filed its partnership return (and the time for filing a

superseding return has expired) and the amount of section

751(a) gain wasn’t reported on the transferor partner’s

Schedule K-1 or if the section 751(a) exchange was

incorrectly reported, then the partnership must file Form 8308

with an amended Form 1065 within 30 days of notification,

with the service center where Form 1065 was filed, and

provide amended Schedules K-1 to the affected partner(s). If

the partnership is within the time frame to file a superseding

return, it may do so rather than file an amended return.

Instructions for Form 8308 (Rev. 11-2025) Catalog Number 94665P

Department of the Treasury Internal Revenue Service www.irs.gov

Non-filing of Form 8308 by the partnership. If a BBA or

non-BBA partnership didn't file Form 8308 with its Form 1065

but reported the correct section 751(a) gain (loss) on its

return and on its Schedule(s) K-1 issued to the relevant

partner(s), then the partnership must file Form 8308

separately and within 30 days of notification with the service

center where Form 1065 was filed. No AAR is needed for

BBA partnerships because there is no change to the

originally reported section 751(a) gain (loss) amount.

Incorrect reporting of section 751(a) exchange on Form

8308 by partnership but correct reporting of section

751(a) exchange on Schedule K-1. If a BBA or non-BBA

partnership provided an incorrect Form 8308 to the 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, but the partnership corrected the reporting of the

section 751(a) exchange on the Schedule K-1 and provided a

correct Form 8308 with its Form 1065 filing, then the

partnership should provide a corrected Form 8308 to the

partners by the filing date of the Form 1065. No AAR or

amended return is needed because there is no change to the

Form 1065 filing.

Incorrect reporting of section 751(a) exchange on

Schedule K-1 or K-3.

BBA partnership. If the partnership incorrectly reported

the section 751(a) exchange on Schedule K-1 and the period

for filing a superseding return has expired, the partnership

must file an AAR to make the correction. A correct Form 8308

that also correctly reports the gain should be attached to the

AAR. If the period for filing a superseding return has not yet

expired, the partnership may file a superseding return rather

than an AAR.

Non-BBA partnership. If the partnership incorrectly

reported the section 751(a) exchange on Schedule K-1 or

K-3 and the period for filing a superseding return has expired,

the partnership must file an amended return to make the

correction. A correct Form 8308 that also correctly reports

the gain should be attached to the amended return. If the

period for filing a superseding return has not yet expired, the

partnership may file a superseding return rather than an

amended return.

Form 8308, Parts I Through III, To Be Furnished to

Transferor and Transferee

All partnerships required to file Form 8308 must furnish a

Form 8308 with Parts I through III filled out 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.

Note: The Form 8308 filed by the partnership as an

attachment to Form 1065 must have Parts I through IV filled

out, but the Form 8308 the partnership provides to its

partners need only contain the information in Parts I through

III.

If a Form 8308 containing incorrect information is

furnished to the partner before Form 1065 with Schedule K-1

is filed, the partnership should notify the partner that the

Form 8308 was incorrect and notify the partner of the

corrections by the due date of the return, including

extensions. If the partner received a Form 8308 that isn’t

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consistent with the information that the partnership reports on

Schedule K-1 (Form 1065), then the partner should use the

information on Schedule K-1 and request a revised Form

8308 from the partnership if the partnership didn’t provide it.

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.

Penalties

Penalties for failure to timely file correct Forms 8308.

Penalties may be imposed for each instance of failing to file a

correct Form 8308 by the due date, including extensions. The

penalties may be imposed for including incorrect information

or failing to include all required information. Penalties may be

waived if it is shown the failure was due to reasonable cause

and not willful neglect. Increased penalties may apply for

intentionally disregarding the requirement to report correct

information. See sections 6721, 6724, and 6698.

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 amount of 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.

Instructions for Transferors

This form alerts transferors that they’re required to treat a

portion of the gain realized from a section 751(a) exchange

as ordinary income. For more details, see Pub. 541,

Partnerships.

Although partnerships aren't required to provide a

completed Part IV to transferors, partnerships must report to

transferors the information in column (c) of Part IV (that is, the

transferor’s section 751(a) gain (loss), section 1(h)(5)

collectibles gain, and section 1(h)(6) unrecaptured section

1250 gain) in box 20 of Schedule K-1 (Form 1065), using

codes AB, AC, and/or AD. See the Partner’s Instructions for

Schedule K-1 (Form 1065). In addition, for foreign

transferors, this information must also have been reported to

you in Schedule K-3, Part XIII. See the Partner’s Instructions

for Schedule K-3 (Form 1065). Even if this information is

required to be reported on multiple forms, it must only be

reported on the partner’s tax return once. If a transferor

receives information on a Schedule K-1 or K-3 that is

inconsistent with or has information missing from what is

reported on Form 8308, the transferor should rely on the

information on Schedule K-1 or K-3.

If a transferor receives Form 8308 after the Schedule K-1

or K-3 is received and Form 8308 is inconsistent with

Schedule K-1 or K-3, the transferor must contact the

partnership and determine whether a superseding return, an

amended partnership return (for a non-BBA partnership), or

an AAR (for a BBA partnership) has been filed with the IRS

by the partnership relating to the information reported on

Form 8308. If a superseding return, an amended Form 1065,

or an AAR has been filed, the transferor should secure a

revised Schedule K-1 and Schedule K-3 (if applicable) or

Instructions for Form 8308 (Rev. Nov. 2025)

Form 8986, Partner’s Share of Adjustment(s) to

Partnership-Related Item(s).

Section 751(a) Exchange

Note: A BBA partnership will only issue Forms 8986 in

instances where some or all of the adjustments reported by

the AAR don’t result in an imputed underpayment (IU) or

some or all of the adjustments do result in an IU but the

partnership makes an election to push out the adjustments in

lieu of paying the IU at the partnership level.

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.

If no amended Schedule K-1, Schedule K-3, or Form 8986

is secured from the partnership and the transferor is certain

that the Form 8308 is correct and that transferor should have

received a corrected Schedule K-1, Schedule K-3, or Form

8986, then the following apply.

• BBA partnership: the partner should affirmatively file Form

8082, Notice of Inconsistent Treatment or Administrative

Adjustment Request (AAR), because the partner is filing

inconsistently with the Schedule K-1 or K-3 received and is

relying on Form 8308.

• Non-BBA partnership: Form 8082 isn’t required if filing

inconsistently with a Schedule K-1 or K-3 received and

relying on Form 8308.

Unrealized Receivables

Unrealized receivables, to the extent not previously includible

in income under the partnership’s accounting method, are

any rights to payment for the following.

• Goods delivered or to be delivered, to the extent that the

payment would be treated as received for property other than

a capital asset.

• Services rendered or to be rendered.

Specific Instructions

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 farmland (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)).

Instructions for Partnership

Inventory Items

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.

• The date of the sale or exchange.

• The amount of any gain or loss attributable to the section

751(a) property.

• The amount of any gain or loss attributable to capital gain

or loss on the sale of the partnership interest.

Partnership address. Include the suite, room, or other unit

number after the street address. If the post office doesn’t

deliver mail to the street address and the partnership has a

P.O. box, show the box number instead.

Parts I and II

For Parts I and II, provide the relevant information for the

beneficial owner or record holder of the partnership interest

immediately before the transfer (transferor) and immediately

after the transfer (transferee). If the transferor or transferee

record holder owns the interest on behalf of another person

as a nominee, an agent, or a custodian, complete the

information for the beneficial owner. If the identity of the

transferor or transferee beneficial owner is unknown, check

the box and complete the information for the record holder.

See Regulations section 1.6050K-1(a)(4)(iii). If the transferor

or transferee is a disregarded entity for federal income tax

purposes, list the first regarded owner of the partnership

interest as the beneficial owner. If the transferor or transferee

beneficial owner is also the record holder, don’t check the

box to provide the record holder information.

Check the box in Part I if the transferor beneficial owner of

the partnership interest is a foreign person. If the identity of

the transferor beneficial owner isn’t known, check this box if

the record holder is foreign.

Instructions for Form 8308 (Rev. Nov. 2025)

Inventory items aren’t 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 isn’t a capital asset or isn’t 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).

Part III—Type of Partnership Interest Transferred

Check the box on Part III, line 2, that identifies the type of

interest the partner transferred in the partnership. For

purposes of Part III, line 2, the following apply.

• For boxes A and C, capital and profits interests are

determined in accordance with Regulations section

1.706-1(b)(4).

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• For box B, a preferred partnership interest is a partnership

interest having a preference in payment of distributions or on

liquidation over other partners.

• For box D, “other” means a partnership interest that isn’t

capital, profits, or preferred.

Part IV—Partner’s Share of Gain (Loss)

Required by Sections 751(a) and 1(h)(5) and (6)

The three categories reported in Part IV are:

• Section 751(a) hot assets (unrealized receivables and

inventory items gain (loss)),

• Collectibles gain under section 1(h)(5), and

• Unrecaptured section 1250 gain under section 1(h)(6).

Column (a). Partnership-level deemed sale gain (loss).

Report the entity-level computed gain (loss) for each of the

categories that are taxed at rates higher than the long-term

capital gain tax rates. In determining the section 751(a) hot

assets as required by Regulations section 1.751-1(a)(2), the

partnership is to compute the amount of gain or loss as if the

partnership had sold all of its property in a fully taxable

transaction for cash in an amount equal to the fair market

value of such property (taking into account section 7701(g))

immediately prior to the partner’s transfer of the interest in the

partnership. For calculations of gains from collectibles

assets, see Regulations section 1.1(h)-1(b)(2). For

calculations of unrecaptured section 1250 gain upon the sale

or exchange of a partnership interest, see Regulations

section 1.1(h)-1(b)(3).

Columns (b1) and (b2). Percentage interest and number

of units in the partnership transferred. Identify the

percentage interest or the number of units in the partnership

transferred. Enter either the percentage interest in the

partnership or the number of units in the partnership that the

partner transferred in column (b1) or (b2), respectively. If a

partnership is completing this part for a partner that is treated

as transferring an interest in the partnership because it

received a distribution but whose ownership interest in the

partnership remains unchanged, enter zero in column (b1) or

(b2) depending on whether the ownership interests in the

partnership are based on a percentage or units, respectively.

Column (c). Partner-level deemed sale gain (loss).

Report the partner’s allocable share of the amounts in

column (a) related to the portion of the interest that was sold.

The amounts in column (c) should be reported in box 20 of

the partner’s Schedule K-1(Form 1065), with the alpha code

listed.

If the transferor is foreign, the partnership may also be

required to complete Schedule K-3 (Form 1065), Part XIII.

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See the Partnership Instructions for Schedules K-2 and K-3

(Form 1065). Even if the partnership must report this

information on multiple forms, the partner must report it only

once on its return.

A partner must generally report the results of the transfer

of a partnership interest on their related return. This may

include reporting the deemed sale section 751(a) gain or loss

on Form 4797, Sales of Business Property, and capital gain

or loss on Form 8949, Sales and Other Dispositions of

Capital Assets. Generally, see Schedule D (Form 1040),

Capital Gains and Losses, and its instructions for reporting by

individuals of any deemed sale collectibles gain or

unrecaptured section 1250 gain. However, see Schedule P

(Form 1040-NR), Foreign Partner’s Interests in Certain

Partnerships Transferred During Tax Year, for reporting by

nonresident aliens, foreign trusts, and foreign estates; and

Schedule P (Form 1120-F), List of Foreign Partner’s Interests

in Partnerships, for reporting by foreign corporations. If this is

an installment sale, see Form 6252.

Paperwork Reduction Act Notice. We ask for the

information on this form to carry out the Internal Revenue

laws of the United States. You’re required to give us the

information. We need it to ensure that you’re complying with

these laws and to allow us to figure and collect the right

amount of tax. You aren’t 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.

Comments and suggestions. If you have suggestions

for making Form 8308 simpler, we would be happy to hear

from you. You can send us comments through IRS.gov/

FormComments. Or you can write to the Internal Revenue

Service, Tax Forms and Publications Division, 1111

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

Don’t send Form 8308 to this address. Instead, see When To

File, earlier.

Instructions for Form 8308 (Rev. Nov. 2025)