Instructions for Form 8865

2025

Instructions for Form 8865

Return of U.S. Persons With Respect to Certain Foreign Partnerships

Section references are to the Internal Revenue Code

unless otherwise noted.

Future Developments

For the latest information about developments related to

Form 8865, its schedules, and its instructions, such as

legislation enacted after they were published, go to

IRS.gov/Form8865.

What’s New

See What’s New in the Instructions for Form 1065 for

changes and new Internal Revenue Code sections that

may affect foreign partnerships with fiscal years, corporate

partners, or certain impacted activities.

General Instructions

Only the general instructions for Schedules B, K, K-1,

M-1, and M-2 are included later in these instructions. If

you are required to complete these schedules for Form

8865, use the specific instructions for the corresponding

schedules of Form 1065, U.S. Return of Partnership

Income.

IF you are completing Form

8865...

THEN use the instructions for

Form 1065...

Schedule B

page 1 (income and deductions).

Schedules K and K-1

Schedules K and K-1.

Schedule K-3

Schedule K-3.

Schedule L

Schedule L.

Schedule M-1

Schedule M-1.

Schedule M-2

Schedule M-2.

Note: If you are reporting capital gains and losses, use

Schedule D (Form 1065). See the Instructions for

Schedule D (Form 1065).

Purpose of Form

Use Form 8865 to report the information required under

section 6038 (reporting with respect to controlled foreign

partnerships), section 6038B (reporting of transfers to

foreign partnerships), or section 6046A (reporting of

acquisitions, dispositions, and changes in foreign

partnership interests).

Dec 12, 2025

Who Must File

A U.S. person qualifying under one or more of the

Categories of Filers (see below) must complete and file

Form 8865. These instructions and the Filing

Requirements for Categories of Filers chart, later, explain

the information, statements, and schedules required for

each category of filer. If you qualify under more than one

category for a particular foreign partnership, you must

submit all the items required for each category under

which you qualify.

Example. If you qualify as a Category 2 and a

Category 3 filer, you must submit all the schedules

required of Category 2 filers (page 1 of Form 8865, and

Schedules A, A-2, N, K-1, and K-3) plus any additional

schedules that Category 3 filers are required to submit

(Schedules A-1 and O).

Complete a separate Form 8865 and the applicable

schedules for each foreign partnership.

File the 2025 Form 8865 with your income tax return for

your tax year beginning in 2025.

If a Form 8832, Entity Classification Election, was filed

for this entity for the current tax year, see When To File

and Where To File in the instructions for Form 8832 to

determine if you are required to attach a copy of the Form

8832 to the tax return to which the Form 8865 is being

attached.

If a domestic section 721(c) partnership is formed on or

after January 18, 2017, and the gain deferral method is

applied, then a U.S. transferor must file Form 8865 for that

partnership. See Regulations section 1.721(c)-6(b)(4).

See Section 721(c) partnership, Gain deferral method,

and U.S. transferor, later.

A U.S. transferor that is required to provide information

for a partnership under Regulations sections 1.721(c)-6(b)

(2)(iv) and 1.721(c)-6(b)(3)(xi) must file a separate Form

8865 (along with all necessary schedules and

attachments) for each partnership treated as a U.S.

transferor under Regulations sections 1.721(c)-3(d) and

1.721(c)-6(c)(2). See U.S. transferor, later.

Instructions for Form 8865 (2025) Catalog Number 26053N

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

Filing Requirements for Categories of Filers

Category of Filers

Filing Requirements

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2

3

4

Identifying information—page 1 of Form 8865

Schedule A—Constructive Ownership of Partnership Interest

Schedule A-1—Certain Partners of Foreign Partnership

Schedule A-3—Affiliation Schedule

Schedule B—Income Statement—Trade or Business Income

Schedule G (Form 8865)—Statement of Application of the Gain Deferral Method Under Section

721

Schedule H (Form 8865)—Acceleration Events and Exceptions Reporting Relating to Gain

Deferral Method Under Section 721(c)

Schedule K—Partners’ Distributive Share Items

Schedule K-1 (Form 8865)—Partner’s Share of Income, Deductions, Credits, etc. (direct partners

only)

Schedule K-2 (Form 8865)—Partners’ Distributive Share Items—International

Schedule K-3 (Form 8865)—Partner’s Share of Income, Deductions, Credits, etc.—International

Schedule L—Balance Sheets per Books

Schedule M-1—Reconciliation of Income (Loss) per Books With Income (Loss) per Return

Schedule M-2—Analysis of Partners’ Capital Accounts

Schedule N—Transactions Between Controlled Foreign Partnership and Partners or Other

Related Entities

Schedule D—Schedule D (Form 1065), Capital Gains and Losses

Schedule O (Form 8865)—Transfer of Property to a Foreign Partnership

Schedule P (Form 8865)—Acquisitions, Dispositions, and Changes of Interests in a Foreign

Partnership

Categories of Filers

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

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tax year, no person will be considered a Category 2 filer.

See the definition of 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:

1. Owned directly or constructively at least a 10%

interest in the foreign partnership immediately after the

contribution, or

2. The value of the property contributed (when added

to the value of any other property contributed to the

partnership by such person, or any related person, during

the 12-month period ending on the date of transfer)

exceeds $100,000.

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)

Instructions for Form 8865 (2025)

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

event’s under section 6046A: acquisitions, dispositions,

and changes in proportional interests.

Acquisitions. A U.S. person that acquires a foreign

partnership interest has a reportable event if:

• The person didn’t own a 10% or greater direct interest

in the partnership and, as a result of the acquisition, the

person owns a 10% or greater direct interest in the

partnership (for example, from 9% to 10%)—for purposes

of this rule, an acquisition includes an increase in a

person’s direct proportional interest (see Changes in

proportional interests, later); or

• Compared to the person’s direct interest when the

person last had a reportable event, after the acquisition

the person’s direct interest has increased by at least a

10% interest (for example, from 11% to 21%).

An acquisition of a section 721(c) partnership interest

may be an acceleration event exception under the gain

deferral method. See Regulations section 1.721(c)-5. In

this case, the acquirer may become a successor U.S.

transferor and may have a reporting requirement under

Regulations section 1.721(c)-6. See the specific

instructions for Schedule H, later.

Dispositions. A U.S. person that disposes of a foreign

partnership interest has a reportable event if:

• The person owned a 10% or greater direct interest in

the partnership before the disposition and, as a result of

the disposition, the person owns less than a 10% direct

interest (for example, from 10% to 8%)—for purposes of

this rule, a disposition includes a decrease in a person’s

direct proportional interest; or

• Compared to the person’s direct interest when the

person last had a reportable event, after the disposition

the person’s direct interest has decreased by at least a

10% interest (for example, from 21% to 11%).

A disposition of a section 721(c) partnership interest

may be an acceleration event for purposes of applying the

gain deferral method. The U.S. transferor may be required

to recognize gain in an amount equal to the remaining

built-in gain on the section 721(c) property previously

contributed to the section 721(c) partnership. See

Regulations section 1.721(c)-4. For acceleration event

exceptions, see Regulations section 1.721(c)-5. See the

specific instructions for Schedule H, later.

Changes in proportional interests. A U.S. person

has a reportable event if compared to the person’s direct

proportional interest the last time the person had a

reportable event, the person’s direct proportional interest

Instructions for Form 8865 (2025)

has increased or decreased by at least the equivalent of a

10% interest in the partnership.

Special rule for a partnership interest owned on

December 31, 1999. If the U.S. person owned at least a

10% direct interest in the foreign partnership on

December 31,1999, then comparisons should be made to

the person’s direct interest on December 31,1999. Once

the person has a reportable event after December

31,1999, future comparisons should be made by

reference to the last reportable event.

Exceptions to Filing

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.

• A statement that the person qualified as a Category 1

filer, but is not submitting Form 8865 under the multiple

Category 1 filers exception.

• The name, address, and identifying number (if any) of

the foreign partnership of which the person qualified as a

Category 1 filer.

• A statement that the filing requirement has been or will

be satisfied.

• The name and address of the person filing Form 8865

for this partnership.

• The Internal Revenue Service Center where the Form

8865 must be filed (or indicate “electronic filing” if the

Form 8865 has been or will be filed electronically).

Caution: A U.S. person who qualifies for this exception to

the Category 1 filing requirement would still have to file a

separate Form 8865 if that person is also subject to the

filing requirements of Category 3 or 4. This separate Form

8865 would include all the information required for a

Category 3 filer, a Category 4 filer, or a U.S. transferor who

must report certain information for a section 721(c)

partnership for the year of contribution and subsequent

years, pursuant to Regulations section 1.721(c)-6, in

addition to the “Controlled Foreign Partnership Reporting”

statement.

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

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form solely because of constructive ownership from a U.S.

person(s) isn’t required to file Form 8865 if:

1. Form 8865 is filed by the U.S. person(s) through

which the indirect partner constructively owns an interest

in the foreign partnership,

2. The U.S. person through which the indirect partner

constructively owns an interest in the foreign partnership

is also a constructive owner and meets all the

requirements of this constructive ownership filing

exception, or

3. Form 8865 is filed for the foreign partnership by

another Category 1 filer under the multiple Category 1

filers exception.

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.

1. A statement that the indirect partner was required to

file Form 8865, but isn’t doing so under the constructive

owners exception.

2. The names and addresses of the U.S. persons

whose interests the indirect partner constructively owns.

3. The name and address of the foreign partnership for

which the indirect partner would have had to have filed

Form 8865 but for this exception.

4. If the indirect partner is a domestic corporation, a

statement setting forth all the information that the indirect

partner would have had to provide in response to

questions G8a and G8b on Form 8865. See Item H10,

later, for more 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 would

otherwise 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.

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Example. Partner A doesn’t own an interest in FPS, a

foreign partnership. Partner A transfers property to FPS in

exchange for a 15% direct interest. Partner A qualifies as

a Category 3 filer because he transferred property to a

foreign partnership and owned at least a 10% interest in

FPS immediately after the contribution. Partner A is also a

Category 4 filer because he didn’t own a 10% or greater

direct interest in FPS and as a result of the acquisition now

owns a 10% or greater direct interest in FPS. If Partner A

properly reports the contribution on Form 8865 as a

Category 3 filer, Partner A isn’t required to report his

acquisition of the 15% interest in FPS as a Category 4

filer.

Relief for Category 1 and 2 Filers When the

Foreign Partnership Files Form 1065

If a foreign partnership files Form 1065 for its tax year,

Category 1 and 2 filers may use a copy of the completed

Form 1065 schedules in place of the equivalent schedules

of Form 8865.

If you file Form 8865 with an electronically filed income

tax return, see the electronic filing publications identified

in the instructions for your income tax return for more

information.

See the first paragraph under General Instructions,

earlier, for the Form 1065 schedules that are equivalent to

the Form 8865 schedules.

Example. Partner A is a Category 1 filer with respect

to FPS, a foreign partnership, during the 2025 tax year.

FPS completes and files a Form 1065 for its 2025 tax year.

Instead of completing Schedules B, K, K-2, L, M-1, M-2,

K-1, and K-3 of Form 8865, Partner A may attach to its

Form 8865 page 1 of Form 1065 and Form 1065

Schedules K, K-2, L, M-1, M-2, K-1, and K-3 (including

the Schedules K-1 and K-3 for Partner A and all other U.S.

persons owning 10% or greater direct interests in FPS).

Partner A must complete the following items and

schedules on Form 8865.

• The first and second pages.

• Schedule A.

• Schedule A-1.

• Schedule A-2.

• Schedule A-3.

• Schedule G (Form 8865).

• Schedule H (Form 8865).

• Schedule M.

• Schedule N.

Example. Partner A is a Category 2 filer with respect

to FPS, a foreign partnership. If FPS completes and files a

Form 1065 for its 2025 tax year, Partner A may file with

Form 8865 the Schedules K-1 and K-3 (Form 1065) that it

receives from the partnership instead of Schedules K-1

and K-3 (Form 8865). Partner A must complete the

following items and schedules on Form 8865.

• The first and second pages.

• Schedule A.

• Schedule A-2.

• Schedule N.

When and Where To File

Attach Form 8865 to your income tax return (or, if

applicable, partnership or exempt organization return) and

Instructions for Form 8865 (2025)

file both by the due date (including extensions) for that

return. If you don’t have to file an income tax return, you

must file Form 8865 separately with the IRS at the time

and place you would be required to file an income tax

return (or, if applicable, a partnership or exempt

organization return). See below for penalties that may

apply if you don’t file Form 8865 on time.

Definitions

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).

Instructions for Form 8865 (2025)

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:

• 50% of the capital,

• 50% of the profits, or

• 50% of the deductions or losses.

For purposes of determining a 50% interest, the

constructive ownership rules described below apply.

10% interest. A 10% interest in a partnership is an

interest equal to:

• 10% of the capital,

• 10% of the profits, or

• 10% of the deductions or losses.

For purposes of determining a 10% interest, the

constructive ownership rules described below apply.

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).

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Penalties

Failure to timely submit all information required of

Category 1 and 2 filers.

• A $10,000 penalty is imposed for each tax year of each

foreign partnership for failure to furnish the required

information within the time prescribed. If the information

isn’t filed within 90 days after the IRS has mailed a notice

of the failure to the U.S. person, an additional $10,000

penalty (per foreign partnership) is charged for each

30-day period, or fraction thereof, during which the failure

continues after the 90-day period has expired. The

additional penalty is limited to a maximum of $50,000 for

each failure.

• Any person who fails to furnish all of the information

required within the time prescribed will be subject to a

reduction of 10% of the foreign taxes available for credit

under sections 901 and 960. If the failure continues 90

days or more after the date the IRS mails notice of the

failure, an additional 5% reduction is made for each

3-month period, or fraction thereof, during which the

failure continues after the 90-day period has expired. See

section 6038 (and the underlying regulations) for the

maximum reduction, the exception due to reasonable

cause, and the limits on the amount of these penalties.

• Criminal penalties under sections 7203, 7206, and

7207 may apply for failure to file or for filing false or

fraudulent information.

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

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the United States (such as an income tax treaty; an estate

and gift tax treaty; or a friendship, commerce, and

navigation treaty):

• Overrides or modifies any provision of the Internal

Revenue Code, and

• Causes (or potentially causes) a reduction of any tax

incurred at any time.

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.

Failure to comply with a requirement of the gain deferral method. Failure to comply with a requirement of

the gain deferral method, including a failure to comply with

the procedural and reporting requirements imposed under

Regulations sections 1.721(c)-3 and 1.721(c)-6 and

section 6038B, may result in an acceleration event under

Regulations section 1.721(c)-4(b)(2) and a penalty under

section 6038B. See the specific instructions for

Schedule G and Schedule H, later.

Corrections to Form 8865

If you file a Form 8865 that you later determine is

incomplete or incorrect, file a corrected Form 8865 with an

amended tax return following the instructions for the return

with which you originally filed Form 8865. Enter

“corrected” at the top of the form and attach a statement

identifying and explaining the changes.

Specific Instructions

Important: All information must be in English. All

amounts must be stated in U.S. dollars.

If the information required in a given section exceeds

the space provided within that section, attach a separate

statement(s) to provide the remaining information, using

the same size and format as the printed forms.

Fill in all applicable lines and schedules. All

Categories of filers must complete all items on pages 1

and 2, with three exceptions. Complete item E only if, in

addition to filing the form on your own behalf, you are

reporting information about other Category 1 filers under

the multiple Category 1 filers exception, or you are

reporting information about members of your affiliated

group of corporations under the consolidated return

exception. Only Category 1 and 2 filers are required to

complete item H8. See Exceptions to Filing, earlier.

Instructions for Form 8865 (2025)

Answer items H10 and H11 only if you are a Category 1

filer.

Tax Year

Enter in the space below the title of Form 8865 the tax

year of the foreign partnership that ended with or within

the tax year of the person filing this form. Category 1 or 2

filers must report information for the tax year of the foreign

partnership that ends with or within their tax years. A

Category 3 or 4 filer must report on Schedule O or P,

respectively, transactions that occurred during that filer’s

tax year (rather than during the partnership’s tax year).

Identifying Numbers and Addresses

Enter the identifying number of the person filing this

return. Use an employer identification number (EIN) to

identify partnerships, corporations, and estates or trusts.

For individuals, use a social security number (SSN) or

other identification number.

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 U.S. person has a P.O. box, show

the box number instead.

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.

Item A. Category of Filer

Check the box for each category that describes the

person filing the form. If more than one category applies,

check all boxes that apply. See Categories of Filers,

earlier.

Item C

Enter the filer’s share of nonrecourse liabilities,

partnership-level qualified nonrecourse financing, and

other liabilities. Nonrecourse liabilities are those liabilities

of the partnership for which no partner bears the

economic risk of loss. The extent to which a partner bears

the economic risk is determined under the rules of

Regulations section 1.752-2.

“Qualified nonrecourse financing” generally includes

financing:

• For which no one is personally liable for repayment;

• That is borrowed for use in an activity of holding real

property; and

• That is borrowed from a qualified person (defined in

section 49(a)(1)(D)(iv)) or is lent or guaranteed by a

federal, state, or local government.

See section 465(b)(6) for more information on qualified

nonrecourse financing.

Item D. Identification of Common Parent

If the person filing the form is a member of a consolidated

group, but not the parent, list the name, address, and EIN

of the filer’s common parent.

Item E

Check the item E checkbox only if the Form 8865 filer also

files Form 8938, Statement of Specified Foreign Financial

Instructions for Form 8865 (2025)

Assets, for the tax year and includes this form in the total

number of Forms 8865 reported on Form 8938, Part IV,

line 19. For more information, see the Instructions for

Form 8938, generally, and in particular, Duplicative

reporting and Part IV. Excepted Specified Foreign

Financial Assets.

Item F

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.

Item G1

For the foreign partnership’s address, enter the city or

town, the state or province, and the foreign country in that

order. Follow the foreign country’s practice in placing the

postal code in the address. Don’t abbreviate the country

name. If the partnership receives its mail in care of a third

party (such as an accountant or attorney), enter “C/O”

followed by the third party’s name and street address or

P.O. box.

Item G2(a)

If the foreign partnership has an EIN, enter it here. Don’t

enter “FOREIGNUS” or “APPLIED FOR.” If the partnership

has no EIN, item G2(b) must be completed.

Item G2(b)

A reference ID number (defined below) is required in item

G2(b) only in cases where no EIN was entered in item

G2(a) for the foreign partnership. However, filers are

permitted to enter both an EIN in item G2(a) and a

reference ID number in item G2(b). If applicable, enter the

reference ID number you have assigned to the foreign

partnership identified in item G1.

A “reference ID number” is a number established by or

on behalf of the U.S. person identified at the top of page 1

of the form that is assigned to a foreign partnership for

which Form 8865 reporting is required. These numbers

are used to uniquely identify the foreign partnership in

order to keep track of the partnership from tax year to tax

year.

The reference ID number must meet the requirements

below. Don’t enter “FOREIGNUS” or “APPLIED FOR” with

respect to the reference ID number.

Note: Because reference ID numbers are established by

or on behalf of the U.S. person filing Form 8865, there is

no need to apply to the IRS to request a reference ID

number or for permission to use these numbers.

Note: Generally, the reference ID number assigned to a

foreign partnership on Form 8865 has relevance only on

Form 8865, its schedules, and any other form that is

7

attached to or associated with Form 8865, and should not

be used for that foreign partnership on other IRS forms.

However, the foreign partnership’s reference ID number

should also be entered on Form 8858, Information Return

of U.S. Persons With Respect to Foreign Disregarded

Entities (FDEs) and Foreign Branch (FBs), if the foreign

partnership is listed as a tax owner of a foreign

disregarded entity on Form 8858. See the instructions for

Form 8858, line 3c(2), for more information.

Requirements

The reference ID number that is entered in item G2(b)

must be alphanumeric (defined below) and no special

characters or spaces are permitted. The length of a given

reference ID number is limited to 50 characters.

For these purposes, the term “alphanumeric” means

the entry can be alphabetic, numeric, or any combination

of the two.

The same reference ID number must be used

consistently from tax year to tax year for a given foreign

partnership. If for any reason a reference ID number falls

out of use (for example, the foreign partnership no longer

exists due to disposition or liquidation), the reference ID

number used for that foreign partnership cannot be used

again for another foreign partnership for purposes of Form

8865 reporting.

There are some situations that warrant correlation of a

new reference ID number with a previous reference ID

number when assigning a new reference ID number to a

foreign partnership. For example:

• In the case of a merger or acquisition, a Form 8865 filer

must use a reference ID number which correlates the

previous reference ID number with the new reference ID

number assigned to the foreign partnership; or

• In the case of an entity classification election that is

made on behalf of the foreign partnership on Form 8832,

Regulations section 301.6109-1(b)(2)(v) requires the

foreign partnership to have an EIN for this election. For the

first year that Form 8865 is filed after an entity

classification election is made on behalf of the foreign

partnership on Form 8832, the new EIN must be entered

in item G2(a) of Form 8865 and the old reference ID

number must be entered in item G2(b). In subsequent

years, the filer may continue to enter both the EIN in item

G2(a) and the reference ID number in item G2(b), but

must enter at least the EIN in item G2(a).

You must correlate the reference ID numbers as

follows: New reference ID number (space) Old reference

ID number. If there is more than one old reference ID

number, you must enter a space between each such

number. As indicated above, the length of a given

reference ID number is limited to 50 characters and each

number must be alphanumeric and no special characters

are permitted.

Note: This correlation requirement applies only to the first

year the new reference ID number is used.

8

Item G6. Principal Business Activity Code

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.

Item G8a. Functional Currency

Enter the foreign partnership’s functional currency. See

sections 985 through 989 and the regulations thereunder.

If the partnership had more than one qualified business

unit (QBU), described in Regulations section

1.989(a)-1(b)(2)(ii), attach a statement identifying each

QBU, its country of operation, and its functional currency.

A QBU under Regulations section 1.989(a)-1(b)(2)(ii) is

any separate and clearly identified unit of a trade or

business of the partnership which maintains separate

books and records.

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.

Item G8b. Exchange Rate

When translating functional currency to U.S. dollars, you

must use the method specified in sections 985 through

989 and the regulations thereunder. But, regardless of the

specific method required, all exchange rates must be

reported using a “divide-by convention” rounded to at

least four places. That is, the exchange rate must be

reported in terms of the amount by which the functional

currency amount must be divided in order to reflect an

equivalent amount of U.S. dollars. As such, the exchange

rate must be reported as the units of foreign currency that

equal one U.S. dollar, rounded to at least four places.

Don’t report the exchange rate as the number of U.S.

dollars that equals one unit of foreign currency.

Note: You must round the result to more than four places

if failure to do so would materially distort the exchange

rate or the equivalent amount of U.S. dollars.

Item H2

If the foreign partnership was required to file Form 1065

for the partnership’s tax year listed at the top of page 1 of

Form 8865, check the applicable box and enter the

Internal Revenue Service Center where the form was or

will be filed (or enter “electronic filing” if the form was or

will be filed electronically). Also, check the applicable

box(es) if the foreign partnership was required to file (for

its tax year) Form 8804, Annual Return for Partnership

Withholding Tax (Section 1446); or (for the calendar year

ending with or within the foreign partnership’s tax year)

Form 1042, Annual Withholding Tax Return for U.S.

Source Income of Foreign Persons.

Instructions for Form 8865 (2025)

Item H5

Section 267A disallows a deduction for certain interest or

royalty paid or accrued in agreement with a hybrid

arrangement, to the extent that, under the foreign tax law,

there isn’t a corresponding income inclusion (including

long-term deferral). In the case of a filer that is a tax

resident of the United States (for example, a domestic

corporation or citizen of the United States), report in item

H5 the total amount of interest and royalty paid or accrued

by the foreign partnership for which your distributive share

of deductions is disallowed under section 267A. In the

case of a filer that isn’t a tax resident of the United States

(for example, a domestic partnership), only report in item

H5 the portion of your distributive share of interest and

royalty paid or accrued by the foreign partnership for

which you know, or have reason to know, that one or more

of your owners aren’t allowed a deduction under section

267A. For additional information about section 267A,

including the application of section 267A in the case of

payments by a partnership, see IRS.gov/Businesses/

Partnerships/FAQs-for-Form-1065-Schedule-B-OtherInformation-Question-22.

Item H6

Answer “Yes” to item H6 if the partnership is a section

721(c) partnership. If the answer is “Yes,” see the specific

instructions for Schedules G and H, relating to the gain

deferral method, and, if applicable, Schedule O, relating to

the contribution of property during the tax year. See

Section 721(c) partnership, earlier.

Item H8

Note: Only Category 1 and 2 filers are required to

complete item H8.

Enter the number of Forms 8858 attached to Form

8865. A disregarded entity is an entity that is disregarded

as an entity separate from its owner under Regulations

section 301.7701-2(c)(2). The partnership is the tax owner

of the foreign disregarded entity if it is treated as owning

the assets and liabilities of the foreign disregarded entity

for purposes of U.S. income tax law.

If the foreign partnership is the tax owner of a foreign

disregarded entity or operates a foreign branch and you

are a Category 1 or 2 filer of Form 8865, complete and

attach Form 8858 to Form 8865. For more information,

see the Instructions for Form 8858. In addition, if the

foreign partnership is required to attach Form 8858 to

Form 8865, the amounts reported on certain schedules on

Form 8858 must be included in determining the amounts

reported on the equivalent schedules as follows.

IF amounts were reported on

the following Schedule on

Form 8858...

THEN take those amounts into

account (converting from

GAAP to tax as necessary)

when determining the amounts

to be reported on this

Schedule on Form 8865...

Schedule C

Schedule B.

Schedule F

Schedule L.

Schedule J

Schedule K-2, Part III, Section 4.

Schedule M

Schedule N.

Item H10. Separate Units

Note: Only Category 1 filers (or indirect partners that are

filing the constructive ownership exception statement) are

required to answer items H10a and H10b, if applicable.

Answer “Yes” to item H10a if the filer is a domestic

corporation and (a) the partnership is a hybrid entity; or (b)

the filer, through its interest in the partnership, indirectly

owns an interest in a hybrid entity or indirectly carries on a

business operation outside the United States that, if

carried on by a U.S. person, would constitute a foreign

branch (as defined in Regulations section 1.367(a)-6T(g)

(1)). Under Regulations section 1.1503(d)-1(b)(3), a

“hybrid entity” means an entity that isn’t taxable as an

association for U.S. federal tax purposes, but is subject to

an income tax of a foreign country as a corporation (or

otherwise at the entity level) either on its worldwide

income or on a residence basis. If the answer to item

H10a is “No,” skip item H10b.

See Regulations section 1.1503(d)-1(b)(4) for more

information on separate units, including information on

when two or more individual separate units are combined

and treated as one separate unit. If you answer “Yes” to

item H10b, then, for each separate unit that has a dual

consolidated loss, attach a statement that sets forth (a)

the identity and country of operation of the separate unit

or, in the case of a combined separate unit, the identity

and country of operation of each individual separate unit

that is treated as part of the combined separate unit; and

(b) the amount of the dual consolidated loss. See

Regulations section 1.1503(d)-5 for rules on determining

the amount of a dual consolidated loss attributable to a

separate unit.

Item H11

Note: Only Category 1 filers are required to answer item

H11.

Answer “Yes” to item H11 if the partnership meets both

of the requirements shown on the form. “Total receipts” is

defined as the sum of gross receipts or sales (Schedule B,

line 1a); all other income reported on Schedule B (lines 4

through 7); income reported on Schedule K, lines 3a, 5,

6a, and 7; income or net gain reported on Schedule K,

lines 8, 9a, 10, and 11; and income or net gain reported

on Form 8825, Rental Real Estate Income and Expenses

of a Partnership or an S Corporation, lines 2, 19, and 20a.

Item H12

Check “Yes” on item H12a if the filer of this Form 8865 is

claiming a deduction under section 250 for foreign-derived

Instructions for Form 8865 (2025)

9

intangible income (FDII), and enter the amounts

requested on items H12b, H12c, and H12d. Enter U.S.

dollar amounts on items H12b, H12c, and H12d,

translated from functional currency at the average

exchange rate for the foreign partnership’s tax year. See

section 989(b).

The reported amounts should provide information for

transactions between the filer of the Form 8865 and the

foreign partnership. See Form 8993 and its instructions for

information on the section 250 deduction. If no deduction

is being claimed, check “No.”

Item H14

Answer “Yes” if at any time during the year there were

transfers between the partnership and its partners subject

to the disclosure requirements of Regulations section

1.707-8. For certain transfers that are presumed to be

sales, the partnership or the partners must comply with

the disclosure requirements in Regulations section

1.707-8. Generally, disclosure is required when:

1. Certain transfers to a partner are made within 2

years of a transfer of property by the partner to the

partnership;

2. Certain debt is incurred by a partner within 2 years

of the earlier of (a) a written agreement to transfer, or (b) a

transfer of the property that secures the debt, if the debt is

treated as a qualified liability; or

3. Transfers from a partnership to a partner occur

which are the equivalent to those listed in (1) or (2) above.

The disclosure must be made on the transferor

partner’s return using Form 8275, Disclosure Statement,

or on an attached statement providing the same

information. When more than one partner transfers

property to a partnership under a plan, the disclosure may

be made by the partnership rather than each partner.

Signature

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.

Schedule A. Constructive Ownership

of Partnership Interest

All filers must complete Schedule A. Check box a if the

person filing the return owns a direct interest in the foreign

partnership. Check box b if the person filing the return

constructively owns an interest in the foreign partnership.

See Constructive ownership, earlier.

Category 1 and 2 filers. Category 1 and 2 filers must list

the persons (U.S. and foreign) whose interests in the

foreign partnership they constructively owned during the

partnership’s tax year.

10

Category 3 filers. Category 3 filers must list the persons

(U.S. and foreign) whose interests in the foreign

partnership they constructively owned during the filer’s tax

year that the reportable transfer occurred. See

Schedule A-2, later.

Schedule A-1. Certain Partners of

Foreign Partnership

All Category 1 and certain Category 3 filers must

complete Schedule A-1. Any person already listed on

Schedule A isn’t required to be listed again on

Schedule A-1.

Category 1 filers. Category 1 filers must list all U.S.

persons who owned at least a 10% direct interest in the

foreign partnership during the partnership’s tax year listed

at the top of page 1 of Form 8865.

Category 3 filers. Category 3 filers must list:

• Each U.S. person that owned a 10% or greater direct

interest in the foreign partnership during the Category 3

filer’s tax year, and

• Any other person related to the Category 3 filer that was

a direct partner in the foreign partnership during that tax

year.

See Regulations section 1.6038B-2(i)(4) for the

definition of a “related person.”

Exception. Category 3 filers who only transferred cash

and didn’t own a 10% or greater interest in the transferee

partnership after the transfer aren’t required to complete

Schedule A-1.

Schedule A-2. Foreign Partners of

Section 721(c) Partnership

Schedule A-2 must be completed if (1) item H6 is

answered “Yes” (that the partnership is a section 721(c)

partnership); and (2) during the current tax year, a gain

deferral contribution occurred, or (3) a gain deferral

contribution occurred in a prior tax year (including before

2021) and, during the current tax year, the gain deferral

method is applied to section 721(c) property contributed

in the prior gain deferral contribution. See Section 721(c)

partnership, Gain deferral contribution, and Gain deferral

method, earlier.

Country of organization. Enter the 2-letter country code

for the country of organization for any foreign partner,

other than an individual. See country codes on IRS.gov/

CountryCodes.

Check if related to U.S. transferor. Check the box if the

partner is directly or indirectly related to the U.S. transferor

(within the meaning of section 267(b) or 707(b)(1)) and

isn’t a U.S. person.

Percentage interest. Include the foreign partner’s

percentage of interest in the partnership’s capital and

profits immediately after the gain deferral contribution. If

multiple gain deferral contributions occurred during the tax

year, enter the percentages immediately after the last gain

deferral contribution. See Gain deferral contribution,

earlier.

Instructions for Form 8865 (2025)

Schedule A-3. Affiliation Schedule

All filers must complete Schedule A-3. List on

Schedule A-3 all partnerships (foreign or domestic) in

which the foreign partnership owned a direct interest, or a

10% indirect interest (under the rules of sections 267(c)(1)

and (5)) during the partnership tax year listed at the top of

page 1 of Form 8865.

Category 1 filers. Only Category 1 filers must complete

the “Total ordinary income or loss” column. In that column,

report the foreign partnership’s share of ordinary income

(even if not received) or loss from partnerships in which

the foreign partnership owns a direct interest. The total

amount of ordinary income or loss from each partnership

must also be included on Schedule B, line 4.

Schedule B. Income

Statement—Trade or Business

Income

Important: All Category 1 filers in partnerships engaged

in a domestic or foreign trade or business must complete

Form 8865, Schedule B.

If the partnership is a section 721(c) partnership and

the gain deferral method is applied, Schedule B must

include any remedial items for section 721(c) property,

including an offsetting remedial item relating to

contributed section 197(f)(9) property. See Regulations

sections 1.704-3(d) and 1.704-3(d)(5)(iii). The total net

amount of remedial allocations should be included on

line 7, “Other income (loss).” Attach a detailed statement

describing the remedial items allocated to each partner

during the tax year for section 721(c) property. See

Regulations section 1.721(c)-3. See Section 721(c)

partnership, Section 721(c) property, and Gain deferral

method, earlier.

Specific Instructions for Schedule B

For specific instructions for Form 8865, Schedule B, use

the instructions for Form 1065, lines 1a through 21

(income and deductions).

Tip: You can view or download the Instructions for Form

1065 at IRS.gov/Form1065. Also, these instructions can

be ordered by calling 800-829-3676 (800-TAX-FORM).

Schedule D (Form 1065). Capital

Gains and Losses

Important: All Form 8865 Category 1 filers in

partnerships having partnership items described in the

Instructions for Schedule D (Form 1065), Capital Gains

and Losses, must complete that schedule.

Tip: You can view or download the Schedule D (Form

1065) and the Instructions for Schedule D (Form 1065) at

IRS.gov/forms-pubs/about-schedule-d-form-1065. Also,

the form and its instructions can be ordered by calling

800-829-3676 (800-TAX-FORM).

Instructions for Form 8865 (2025)

Schedule G (Form 8865). Statement

of Application of the Gain Deferral

Method Under Section 721(c)

A U.S. transferor uses Schedule G to comply with the

reporting requirements that must be satisfied in applying

the gain deferral method. If the gain deferral method is

applied to section 721(c) property, a U.S. transferor must

file Schedule G for the tax year of a gain deferral

contribution, as well as for each subsequent tax year to

which the gain deferral method is applied to section

721(c) property, even if the gain deferral contribution for

that property occurred before 2018. See Regulations

sections 1.721(c)-6(b)(2) and (3). See Gain deferral

method, Gain deferral contribution, and Section 721(c)

property, earlier.

Filing Year

Check the box for “Tax year of gain deferral contribution” if

your tax year is a year in which a gain deferral contribution

occurred (a gain deferral contribution year). Check the

“Annual reporting” box if a gain deferral contribution

occurred in a year prior to the current tax year and, in the

current tax year, the gain deferral method applies to

section 721(c) property contributed in the prior gain

deferral contribution (an annual reporting year). If the tax

year is both a gain deferral contribution year and an

annual reporting year, both boxes should be checked.

General Instructions

On Schedule G, information must be provided for section

721(c) property that was (a) contributed to the partnership

in a gain deferral contribution that occurred during the

current tax year; or (b) contributed to the partnership in a

gain deferral contribution that occurred during a prior tax

year, provided that the gain deferral method is applied to

the property in the current tax year. Collectively, section

721(c) property for which information must be reported on

Schedule G is referred to as “reportable section 721(c)

properties.” See Section 721(c) property, earlier.

In Parts I through V, information must be provided on a

property-by-property basis. In Part I, reportable section

721(c) properties and accompanying information must be

listed in descending order of FMV (measured at the time

of contribution). Thus, the reportable section 721(c)

property with the highest FMV should be listed on line 1,

the reportable section 721(c) property with the second

highest FMV should be listed on line 2, and so on.

In Parts II through IV, the line on which information is

provided for a reportable section 721(c) property must

correspond to the line on which the property is listed in

Part I. Thus, in Parts II through IV, line 1 corresponds to

Part I, line 1, and line 2 corresponds to Part I, line 2, and

so on.

If there are more than four reportable section 721(c)

properties, in Parts I through IV, attach a statement using

the same format as in Parts I through IV, listing properties,

or information for properties, in the same manner as

described in the preceding two paragraphs. For example,

the first line on the statement for Part I must be labeled “5”

and contain columns with the same information as those

11

in Part I, and must list the reportable section 721(c)

property with the fifth-highest FMV. The statements for

Parts I through IV may be combined in a single attached

statement, provided that the format described above is

followed.

A U.S. transferor should complete and file only one

Schedule G for each partnership. See U.S. transferor,

earlier.

Part I. Section 721(c) Property

Provide the requested information for each reportable

section 721(c) property. See General Instructions under

Schedule G, earlier, for the order in which properties must

be listed and when an attached statement can and must

be used. If there are more than four reportable section

721(c) properties, enter on line 4a the following

information for the reportable section 721(c) properties

listed on the attached statement.

1. In columns 6(a) through 6(c), provide the aggregate

FMV, basis, and built-in gain, respectively, of the

properties.

2. Check the boxes in columns 4, 5, and 7(a)–(e) if

applicable to any of the properties.

Caution: Don’t complete line 4a if there are four or fewer

reportable section 721(c) properties.

Note: Schedule O, Transfer of Property to a Foreign

Partnership, may need to be completed if, during the tax

year, the U.S. transferor contributed property (including

section 721(c) property) to the partnership. See the

Schedule O instructions, later.

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

12

line in Part V of Schedule G and complete Schedule H.

See the Part V instructions below.

Part II. Remaining Built-in Gain, Remedial

Income, and Gain Recognition

Provide the requested information for each reportable

section 721(c) property. See General Instructions under

Schedule G, earlier, for the order in which properties must

be listed and when an attached statement can and must

be used. On line 4a, provide the total amounts in each

column for all reportable section 721(c) property, including

property listed on an attached statement.

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).

Part III. Allocation Percentages of Partnership

Items With Respect to Section 721(c) Property

For each reportable section 721(c) property, enter the

percentage of income, gain, deduction, and loss allocated

to the U.S. transferor, related domestic partners, and

related foreign partners. See General Instructions under

Schedule G, earlier, for the order in which properties must

be listed and when an attached statement can and must

Instructions for Form 8865 (2025)

be used. See section 267(b) or 707(b)(1) for rules on

determining related partners, and see Regulations section

1.721(c)-3(c) for a rule requiring that the partnership apply

the consistent allocation method when the gain deferral

method applies.

Part IV. Allocation of Items to U.S. Transferor

With Respect to Section 721(c) Property

For each reportable section 721(c) property, enter the

amount (both book and tax) of income, gain, deduction,

and loss allocated to the U.S. transferor under the gain

deferral method. See General Instructions under

Schedule G, earlier, for the order in which properties must

be listed and when an attached statement can and must

be used. In addition, a description of any tax item or

regulatory allocation for a reportable section 721(c)

property that is allocated to the U.S. transferor must be

included in Part VI, Supplemental Information.

Part V. Additional Information

Part V provides questions relating to whether certain

events have occurred in the current tax year for one or

more reportable section 721(c) properties and information

relating to treaty benefits. Such events include:

• Acceleration events (see Regulations section

1.721(c)-4),

• Partial acceleration events (see Regulations section

1.721(c)-5(d)),

• Termination events (see Regulations section

1.721(c)-5(b)),

• Successor events involving a successor partnership or

U.S. transferor (see Regulations section 1.721(c)-5(c)),

• Taxable disposition of a portion of an interest in a

partnership (see Regulations section 1.721(c)-5(f)), and

• Direct or indirect transfer of section 721(c) property to a

foreign corporation subject to section 367 (see

Regulations section 1.721(c)-5(e)).

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).

Part VI. Supplemental Information

Information to be reported. When providing any

information in Part VI, indicate the Part, Part column, and

line for which the information is provided.

Additional part rows. If an attached statement is used in

Parts I through IV, include the statement “Additional

Section 721(c) Property statement(s) is/are attached” in

the area provided in Part VI.

Other information. Use the Supplemental Information

section to provide any additional information required by

Regulations section 1.721(c)-6 that isn’t captured in Parts

I through IV above.

Instructions for Form 8865 (2025)

Schedule H (Form 8865). Acceleration

Events and Exceptions Reporting

Relating to Gain Deferral Method

Under Section 721(c)

If the gain deferral method is being applied to reportable

section 721(c) property, complete and file Schedule H to

report certain events related to the section 721(c)

property. See Regulations sections 1.721(c)-4 and -5 for

more information. Complete a separate Schedule H for

each partnership.

General instructions. Complete all Parts of Schedule H

that correspond to the box or boxes checked in

Schedule G, Part I, column 7, and the related line on Part

V checked “Yes.” If additional lines are needed to report

the information required in Parts I through V, attach a

statement in the same format as the format used in the

Part, in Part VI, Supplemental Information. See Section

721(c) property, earlier.

For Parts I–III and V, enter in column (a) the line number

for the section 721(c) property from Schedule G, Part I. If

the impacted section 721(c) property is listed on an

attached statement to Schedule G, Part I, enter the line

number from the attached statement on which that

property was identified.

Part I. Acceleration Event

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 (b). Provide a description of the acceleration

event, including the citation in the case of a partial or

deemed acceleration event. See Regulations section

1.721(c)-6(b)(3)(iv). Use Part VI if additional space is

needed to describe the transaction.

13

Column (d). Enter the amount of the gain recognized by

the U.S. transferor for the section 721(c) property resulting

from the acceleration event.

Column (e). Enter the amount that the section 721(c)

partnership will increase its basis in the section 721(c)

property as a result of the acceleration event. See

Regulations sections 1.721(c)-4(c)(2) and 1.721(c)-5(d) in

the case of a partial acceleration event.

Column (f). Check the box if there is a partial

acceleration event and the U.S. transferor recognizes a

partial gain for the section 721(c) property. Certain

distributions of other partnership property to a partner that

result in an adjustment under section 734 to the section

721(c) property constitute a partial acceleration event

requiring that the U.S. transferor recognize gain. If there is

a remaining built-in gain in the section 721(c) property

immediately after the partial acceleration event, the gain

deferral method must continue to apply and the U.S.

transferor is required to continue to report the information

on Schedule G for that property. See Regulations section

1.721(c)-5(d).

Part II. Termination Event

A termination event causes the gain deferral method to no

longer apply for the affected section 721(c) property on a

property-by-property basis. Regulations section

1.721(c)-5(b) identifies the termination events.

Column (b). Provide a description of the termination

event, including the citation to the relevant paragraph in

Regulations section 1.721(c)-5(b). See Regulations

section 1.721(c)-6(b)(3)(v). Use Part VI if additional space

is needed to describe the transaction.

Part III. Successor Event

A successor event allows for the continued application of

the gain deferral method for the affected section 721(c)

property on a property-by-property basis by a successor

U.S. transferor or a successor section 721(c) partnership.

However, if the successor doesn’t continue the gain

deferral method, the event is an acceleration event and

must be reported in Part I. Successor events are

applicable on a property-by-property basis. If only a

portion of an interest in a partnership is transferred in a

successor event, the rules of Regulations section

1.704-3(a)(7) are applied to determine the remaining

built-in gain in the section 721(c) property that is

attributable to the portion of the interest that is transferred

and the portion that is retained. Regulations section

1.721(c)-5(c) identifies the successor events, including

special rules for transactions involving tiered partnerships.

If more than one successor event occurs in the tax

year, provide the required information for each event

separately in Part IV in chronological date order.

Column (b). Provide a description of the successor

event, including the citation to the relevant paragraph in

Regulations section 1.721(c)-5(c). See Regulations

section 1.721(c)-6(b)(3)(v). Use Part VI if additional space

is needed to describe the transaction.

Column (d). Enter the identifying information of the

relevant successor, as applicable. In certain successor

14

events, a domestic corporation becomes the successor

U.S. transferor. In other successor events, a partnership

becomes the successor section 721(c) partnership. A

successor section 721(c) partnership may be a new,

upper-tier, or lower-tier partnership. The identifying

information must include the name, address, and U.S.

taxpayer identification number (TIN), if any, of the

successor U.S. transferor or successor section 721(c)

partnership.

Part IV. Taxable Disposition of a Portion of an

Interest in Partnership Event

Part IV reports the information relating to a fully taxable

disposition of a portion of an interest in a section 721(c)

partnership. Complete this Part if a U.S. transferor or a

partnership in which a U.S. transferor is a direct or indirect

partner disposes of (directly or indirectly through one or

more partnerships) a portion of an interest in a section

721(c) partnership in a transaction in which the gain or

loss, if any, is recognized. This will not be an acceleration

event for the portion of the interest transferred. The gain

deferral method will continue to apply for the section

721(c) property of the section 721(c) partnership. The

rules of Regulations section 1.704-3(a)(7) are applied to

determine the remaining built-in gain in the section 721(c)

property on a property-by-property basis that is

attributable to the portion of the interest in the section

721(c) partnership is retained. See Regulations section

1.721(c)-5(f).

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).

Part V. Section 367 Transfer Event

Part V reports the information relating to a transfer

described in section 367 of section 721(c) property to a

foreign corporation. See Regulations section

1.721(c)-5(e). Section 367 events include:

• Transfer of section 721(c) property by a section 721(c)

partnership to a foreign corporation, or

Instructions for Form 8865 (2025)

• Transfer by a U.S. transferor or a partnership in which a

U.S. transferor is a direct or indirect partner transfers

(directly or indirectly through one or more partnerships) all

or a portion of the section 721(c) partnership that owns

section 721(c) property to a foreign corporation.

As a result of the section 367 event, the section 721(c)

property is no longer subject to the gain deferral method.

The U.S. transferor is treated as transferring the section

721(c) property to a foreign corporation and is subject to

taxation on the transfer under section 367. See the section

367 regulations for rules relating to gain or income

recognition under section 367.

Note: A transfer of property to a foreign corporation by a

U.S. transferor is subject to other reporting requirements

under sections 367, 351, 368, and 6038B (for example,

the filing of Form 926), as applicable. See the related

regulations under these Code sections. Such reporting

requirements are in addition to the filing of Schedule H.

After considering the tax consequences under section

367, the remaining built-in gain, if any, for the section

721(c) property is recognized by the U.S. transferor to the

extent that would have been allocated to the U.S.

transferor had the section 721(c) partnership sold that

portion of the property immediately before the transfer for

FMV.

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.

Information, provide the information on an attachment or

attachments to Schedule H in the same format as required

for the row on the Part at issue. If separate supplemental

schedules are used for any Part of Schedule H for specific

section 721(c) properties, use the same corresponding

identification line number from the Part I of Schedule G for

such property on the supplemental schedule for

Schedule H.

Other information. Use the Supplemental Information

section to provide any additional information required by

Regulations section 1.721(c)-6 that isn’t reported in Parts I

through V above.

Schedules K, Partners’ Distributive

Share Items, and K-1 (Form 8865),

Partner’s Share of Income,

Deductions, Credits, etc.

Schedule K

Form 8865, Schedule K, is a summary schedule of all of

the partners’ shares of the partnership income, credits,

deductions, etc. Only Category 1 filers must complete

Form 8865, Schedule K.

Schedule K-1

Schedule K-1 (Form 8865) is used to report a specific

partner’s share of the partnership income, deductions,

credits, etc.

All Category 1 and 2 filers must complete Schedule K-1

(Form 8865) for any direct interest they hold in the

partnership. A Category 1 or 2 filer that doesn’t own a

direct interest is not required to complete Schedule K-1

(Form 8865).

Category 1 filers must also complete Schedule K-1

(Form 8865) for each U.S. person that directly owns a

10% or greater direct interest in the partnership.

Provide the partner’s beginning and year-end

percentage interests in partnership profits, losses, capital,

or deductions. These percentages should include any

interest constructively owned by the filer.

Complete boxes 1 through 21 for any direct interest that

the partner owns in the partnership.

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.

Example. Partner A owns a 45% direct interest in a

foreign partnership (FPS). Partner A also owns 100% of

the stock of a domestic corporation (DC), which owns a

10% direct interest in FPS. Therefore, Partner A is

considered to own a 55% interest in FPS and is thus a

Category 1 filer. When Partner A completes Schedule K-1

(Form 8865) for itself, Partner A must report the

distributive share of items allocated to Partner A’s direct

interest of 45% but not any items allocated to DC’s 10%

interest. When Partner A completes Schedule K-1 (Form

8865) for DC (which Partner A must do because DC owns

a direct 10% interest), Partner A must report on DC’s

Schedule K-1 (Form 8865) only items allocated to DC’s

direct 10% interest.

Additional Part rows. If additional rows are needed to

enter information in Parts I through V in the Supplemental

Although the partnership isn’t subject to income tax, the

partners are liable for tax on their shares of the

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.

Part VI. Supplemental Information

Instructions for Form 8865 (2025)

15

partnership income, whether or not distributed, and must

include their shares of such items on their tax returns.

partnership, Section 721(c) property, and Gain deferral

method, earlier.

Allocations of income, gains, losses, deductions, or

credits among the partners should generally be made

according to the partnership agreement. See section 704

and the regulations thereunder.

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 “Code ZZ. Other” in

the Instructions for Form 1065). Information concerning

each of the boxes and codes is available in the Partner’s

Instructions for Schedule K-1 (Form 1065).

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.

General Reporting Instructions for Schedule K-1

(Form 8865)

On each Schedule K-1 (Form 8865), enter the information

about the partnership and the partner in Parts I and II

(items A through F). For Schedule K-1 (Form 8865), items

E and F, see the instructions for the corresponding

Schedule K-1 (Form 1065), items J and L, in the

Instructions for Form 1065 under Specific Instructions

(Schedule K-1 only). In Part III, enter the partner’s

distributive share of each item of income, deduction, and

credit and any other information the partner needs to

prepare the partner’s tax return.

Item A2

Enter the reference ID number used on Form 8865, item

G2(b). For details, see Item G2(b), 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)

16

Attached statements. When attaching statements to

Schedule K-1 to report additional information to the

partner, indicate there is a statement for the following.

• If an amount can be input on Schedule K-1 but

additional information is required, enter an asterisk (*)

after the code in the column to the left of the entry space.

• For items that can’t be reported as a single dollar

amount, enter the code and an asterisk (*) in the column

to the left and enter “STMT” in the right column to indicate

that the information is provided on an attached statement.

• If the partnership has more coded items than the

number of entry boxes (for example, boxes 11 and 13

through 15, or boxes 17 through 21), don’t enter a code or

dollar amount in the last entry box. Instead, enter an

asterisk (*) in the left column and enter “STMT” in the

entry space to the right.

More than one attached statement can be placed on

the same sheet of paper. The information included in the

statement should be identified in alphanumerical 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.

Specific Instructions for Schedules K and K-1

For the specific instructions for Form 8865, Schedule K,

and Schedule K-1 (Form 8865), see the Instructions for

Form 1065.

If the partnership is a section 721(c) partnership,

box 20 (code AL—Section 721(c) partnership) of

Schedule K-1, Part III, must include the amounts relating

to any remedial items made under the remedial allocation

method (described in Regulations sections 1.704-3(d) and

1.704-3(d)(5)(iii)) for section 721(c) property. For the

specific partner’s information relating to the remedial

method allocations and gain deferral method, see the

Instructions for Form 1065, especially the Partner’s

Instructions for Schedule K-1 (Form 1065).

Line 16. If the partnership had items of international tax

relevance, see the Instructions for Schedules K-2 and K-3

(Form 8865) to determine if you need to check the box

and attach Schedules K-2 and K-3.

Instructions for Form 8865 (2025)

Schedules K-2 (Form 8865), Partners’

Distributive Share

Items—International, and K-3 (Form

8865), Partner’s Share of Income,

Deductions, Credits,

etc.—International

Schedule K-2

Schedule K-2 (Form 8865) is an extension of Schedule K

of the Form 8865 and is used to report items of

international tax relevance from the operation of a

partnership.

Schedule K-3

Schedule K-3 (Form 8865) is an extension of

Schedule K-1 (Form 8865) and is generally used to report

the partner’s share of the items reported on Schedule K-2.

The information reported on Schedule K-3 is used to

report information on a partner’s tax or information returns.

For more information, see the Instructions for

Schedules K-2 and K-3 (Form 8865).

Schedule L. Balance Sheets per

Books

The balance sheets should agree with the partnership’s

books and records. Attach a statement explaining any

differences.

Only Category 1 filers are required to complete Form

8865, Schedule L.

If you answered “Yes” to item H11 on page 1 of Form

8865, you don’t have to complete Form 8865, Schedule L.

Schedule L requires balance sheets prepared and

translated into U.S. dollars in accordance with U.S.

generally accepted accounting principles (GAAP).

Exception. Generally, if the partnership or any QBU of

the partnership uses the dollar approximate separate

transactions method (DASTM), Form 8865, Schedule L,

should reflect the tax balance sheets prepared and

translated into U.S. dollars according to Regulations

section 1.985-3(d).

Specific Instructions for Schedule L

For the specific instructions for Form 8865, Schedule L,

see the Instructions for Form 1065.

Schedule M-1. Reconciliation of

Income (Loss) per Books With

Income (Loss) per Return

Form 8865 filers aren’t required to complete Schedule M-3

(Form 1065), Net Income (Loss) Reconciliation for Certain

Partnerships.

Only Category 1 filers are required to complete Form

8865, Schedule M-1. If you answered “Yes” to item H11 on

page 1 of Form 8865, you don’t have to complete Form

8865, Schedule M-1.

Instructions for Form 8865 (2025)

Specific Instructions for Schedule M-1

For the specific instructions for Schedule M-1 (Form

8865), see the Instructions for Form 1065.

Schedule M-2. Analysis of Partners’

Capital Accounts

Only Category 1 filers are required to complete Form

8865, Schedule M-2. If you answered “Yes” to item H11 on

page 1 of Form 8865, you don’t have to complete Form

8865, Schedule M-2.

Specific Instructions for Schedule M-2

For the specific instructions for Form 8865, Schedule M-2,

see the Instructions for Form 1065.

Schedule N. Transactions Between

Controlled Foreign Partnership and

Partners or Other Related Entities

All Category 1 filers must complete Schedule N and report

all transactions of the foreign partnership during the tax

year of the partnership listed on the top of Form 8865,

page 1. A Category 1 filer filing a Form 8865 for other

Category 1 filers under the multiple Category 1 filers

exception must complete a Schedule N for itself and a

separate Schedule N for each Category 1 filer not filing

Form 8865.

Category 2 filers are required to complete columns (a),

(b), and (c) of Schedule N. Category 2 filers don’t have to

complete column (d).

Column (a). Use column (a) to report transactions

between the foreign partnership and the person filing the

Form 8865.

Column (d). Use column (d) to report transactions

between the foreign partnership and any U.S. person with

a 10% or more direct interest in the foreign partnership. If

such person also qualifies under column (b), don’t report

transactions between the foreign partnership and that

person under column (d). Report the transactions only

under column (b).

Lines 6 and 16. Enter distributions received from other

partnerships and distributions from the foreign partnership

for which this form is being completed.

Lines 20 and 21. Enter the largest outstanding balances

during the tax year of gross amounts borrowed from, and

gross amounts lent to, the related parties described in

columns (a) through (d). Don’t enter aggregate cash flows,

year-end loan balances, average balances, or net

balances. Don’t include open account balances resulting

from sales and purchases reported under other items

listed on Schedule N that arise and are collected in full in

the ordinary course of business.

Schedule O (Form 8865). Transfer of

Property to a Foreign Partnership

Category 3 filers must complete Schedule O.

17

Section 721(c) partnerships. Regulations section

1.721(c)-2 overrides section 721(a) nonrecognition of gain

upon a contribution of section 721(c) property to a section

721(c) partnership occurring on or after August 6, 2015. A

U.S. transferor must recognize gain unless the gain

deferral method described in Regulations section

1.721(c)-3 is applied. To satisfy the reporting requirements

of the gain deferral method, the U.S. transferor is required

to report certain information for the year of the contribution

and for subsequent years. See Regulations section

1.721(c)-6. See Section 721(c) property, Section 721(c)

partnership, U.S. transferor, and Gain deferral method,

earlier.

Reference ID number. Use the reference ID number

shown on Form 8865, item G2(b). For details, see Item

G2(b), earlier.

Part I. Transfers Reportable Under Section

6038B

Part I is used to report the transfer of property to a foreign

partnership in accordance with Regulations section

1.6038B-2(c). The completion of Part l (related property

transferred to the partnership) is required by Regulations

section 1.6038B-2(c). Provide the information required in

columns (a) through (g) for each contribution of property

to the foreign partnership that must be reported. If you

contributed property with an FMV greater than its tax

basis (appreciated property), or intangible property,

provide the information required in columns (a) through (g)

separately for each item of property transferred (except to

the extent you are allowed to aggregate the property

under Regulations sections 1.704-3(e)(2), (3), and (4)).

Provide a general description of each item of property

in the Supplemental Information Required To Be Reported

section. For all other property contributed, aggregate by

the categories listed in Part I.

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.

Reporting required for the year of contribution to

which the gain deferral method is applied.

Additionally, describe any section 721(c) property

contributed to a section 721(c) partnership and identify

whether the gain deferral method is applied. A U.S.

transferor must attach to Form 8865, for the year of

contribution, Schedule G, containing the information

described in Regulations section 1.721(c)-6(b)(2)(i). See

Regulations section 1.721(c)-6(b) for additional

requirements.

Additional form and statement requirements. In

addition to the reporting requirements above, the following

statements and forms must also be filed to satisfy the

requirements for the gain deferral method.

• Schedule H (Form 8865), if certain events have

occurred.

• Form 8838-P, Consent To Extend the Time To Assess

Tax Pursuant to the Gain Deferral Method (Section

721(c)). See Regulations sections 1.721(c)-6(b)(2)(ii), (b)

(3)(viii), and (b)(5) for more information.

• Copy of “Statement of Waiver of Treaty Benefits under

Section 1.721(c)-6,” if applicable. See Regulations section

1.721(c)-6(c)(1).

Annual Reporting With Respect to the Gain

Deferral Method

A U.S. transferor subject to the gain deferral method must

annually attach Schedule G (Form 8865), containing the

information required in Regulations sections 1.721(c)-6(b)

(3)(i) through (vii) (and (b)(3)(ix), as applicable). See

Regulations section 1.721(c)-6(b)(3) for further annual

reporting requirements pursuant to the gain deferral

method.

Part II. Dispositions Reportable Under Section

6038B

Use Part II to report certain dispositions by a foreign

partnership in accordance with Regulations section

18

Instructions for Form 8865 (2025)

1.6038B-2(d). The completion of Part ll (related property

transferred to the partnership) is required by Regulations

section 1.6038B-2(d). If you were required to report a

transfer of appreciated property to the partnership, and

the partnership disposes of the property while you are still

a direct or constructive partner, you must report that

disposition in Part II. If the partnership disposes of the

property in a nonrecognition transaction and receives in

exchange substituted basis property, report the

subsequent disposition of the substituted basis property in

the same manner as provided for the contributed property.

See section 7701(a)(42) for the definition of substituted

basis property and Regulations section 1.704-3(a)(8) for

more information.

A disposition by a partnership may be an acceleration

event for purposes of applying the gain deferral method.

The U.S. transferor may be required to recognize gain in

an amount equal to the remaining built-in gain on the

section 721(c) property previously contributed to the

section 721(c) partnership. See Regulations section

1.721(c)-4. For acceleration event exceptions, see

Regulations section 1.721(c)-5. Acceleration events and

exceptions to an acceleration event should be reflected in

Part II. In addition, Schedules G and H are required to be

filed.

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

Instructions for Form 8865 (2025)

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.

Part III. Gain Recognition Under Section 904(f)

(3) or (f)(5)(F)

If gain recognition was required for any transfer reported in

Part I under section 904(f)(3) or (f)(5)(F), attach a

statement identifying the transfer and the amount of gain

recognized.

Schedule P (Form 8865).

Acquisitions, Dispositions, and

Changes of Interests in a Foreign

Partnership

Use Schedule P to report the acquisition, disposition, and

change of interest in a foreign partnership.

Every Category 4 filer must complete Schedule P,

unless they qualify under the exception for certain

Category 4 filers, described earlier.

Reference ID number. Use the reference ID number

shown on Form 8865, item G2(b). For details, see Item

G2(b), earlier.

Part I. Acquisitions

Part I is completed by Category 4 filers required to report

an acquisition of an interest in a foreign partnership. See

Categories of Filers, earlier, for more details about which

types of acquisitions must be reported.

An acquisition of a section 721(c) partnership interest

may be an acceleration event exception under the gain

deferral method. In such case, Schedule H is required to

be filed. See Regulations section 1.721(c)-5. In this case,

the acquirer may become a successor U.S. transferor and

may have a reporting requirement under Regulations

section 1.721(c)-6. As a result, the successor U.S.

transferor is required to file Schedule G as well as, if

certain events occur, Schedule H. See Section 721(c)

partnership, Gain deferral method, and U.S. transferor,

earlier.

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

19

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.

Part II. Dispositions

This section is completed by U.S. persons who are

Category 4 filers because they disposed of an interest in a

foreign partnership. See Categories of Filers, earlier, for

more details about what types of dispositions must be

reported. For each disposition reported in Part II, indicate

in Part IV whether a statement is required by Regulations

section 1.751-1(a)(3) to be filed for the disposition.

A disposition of a section 721(c) partnership interest

may be an acceleration event for purposes of applying the

gain deferral method. The U.S. transferor may be required

to recognize gain in an amount equal to the remaining

built-in gain on the section 721(c) property previously

contributed to the section 721(c) partnership. In this case,

Schedule H must also be filed. See Regulations section

1.721(c)-4. For acceleration event exceptions, see

Regulations section 1.721(c)-5.

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.

Part III. Change in Proportional Interest

This section is completed by U.S. persons who are

Category 4 filers because their direct proportional interest

in the foreign partnership changed. See Categories of

Filers, earlier, for more details about which changes in

proportional interest must be reported.

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.

Part IV. Supplemental Information Required

To Be Reported

Enter any information asked for in Part I, Part II, or Part III

that must be reported in detail. Identify the applicable part

number and column next to the information entered in Part

IV.

Privacy Act and Paperwork Reduction Act Notice. We ask for you to obtain the information on this form to carry out

the Internal Revenue laws of the United States. You are required to obtain this information. You are not required to obtain

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 Internal Revenue Code section 6103.

However, section 6103 allows or requires the IRS to disclose or give such information to the Department of Justice for

civil and criminal litigation, and to cities, states, the District of Columbia, and U.S. commonwealths and territories for use

in administering their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and

state agencies to enforce federal nontax criminal laws, or to federal law enforcement and intelligence agencies to combat

terrorism.

The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden

for individual filers is approved under OMB control number 1545-0074, tax exempt filers under OMB control number

1545-0047, business filers is approved under OMB control number 1545-0123, and trust filers is approved under OMB

control number 1545-0092. For the estimated averages, see the instructions for your income tax return.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler,

we would be happy to hear from you. See the instructions for the tax return with which this form is filed.

20

Instructions for Form 8865 (2025)

List of Codes Used for Schedule K-1 (Form 8865)

Information concerning each of the boxes and codes is available in Part III of the Partner’s Instructions for Schedule K-1 (Form 1065).

Box Number / Item

1. Ordinary business income (loss)

2. Net rental real estate income (loss)

3. Other net rental income (loss)

4a. Guaranteed payment services

4b. Guaranteed payment capital

4c. Guaranteed payment total

5. Interest income

6a. Ordinary dividends

6b. Qualified dividends

6c. Dividend equivalents

7. Royalties

8. Net short-term capital gain (loss)

9a. Net long-term capital gain (loss)

9b. Collectibles (28%) gain (loss)

9c. Unrecaptured section 1250 gain

10. Net section 1231 gain (loss)

11. Other income (loss)

Code A. Other portfolio income (loss)

Code B. Involuntary conversions

Code C. Section 1256 contracts & straddles

Code D. Mining exploration costs recapture

Code E. Cancellation of debt

Code F. Section 743(b) positive income adjustments

Codes G and H. Reserved for future use

Code I. Gain (loss) from disposition of oil, gas, thermal, or other mineral properties (section 59(e))

Code J. Recoveries of tax benefit items

Code K. Gambling gains and losses

Code L. Any income, gain, or loss to the partnership from a distribution under section 751(b)

Code M. Gain eligible for section 1045 rollover (replacement stock purchased by partnership)

Code N. Gain eligible for section 1045 rollover (replacement stock not purchased by partnership)

Code O. Sale or exchange of QSB stock with section 1202 exclusion

Code P. Gain or loss on disposition of farm recapture property and other items to which section 1252 applies

Code Q. Gain or loss on Fannie Mae or Freddie Mac qualified preferred stock

Code R. Specially allocated ordinary gain (loss)

Code S. Non-portfolio capital gain (loss)

Codes T through X. Reserved for future use

Code ZZ. Other

12. Section 179 deduction

13. Other deductions

Code A. Cash contributions (60%)

Code B. Cash contributions (30%)

Code C. Noncash contributions (50%)

Code D. Noncash contributions (30%)

Code E. Capital gain property to a 50% organization (30%)

Code F. Capital gain property (20%)

Code G. Contributions (100%)

Code H. Investment interest expense

Instructions for Form 8865 (2025)

21

Box Number / Item

Code I. Deductions—royalty income

Code J. Section 59(e)(2) expenditures

Code K. Excess business interest expense (EBIE)

Code L. Deductions—portfolio income (other)

Code M. Amounts paid for medical insurance

Code N. Educational assistance benefits

Code O. Dependent care benefits

Code P. Preproductive period expenses

Code Q. Reserved for future use

Code R. Pensions and IRAs

Code S. Reforestation expense deduction

Codes T through U. Reserved for future use

Code V. Section 743(b) negative income adjustments

Code W. Soil and water conservation

Code X. Film, television, and theatrical and sound production expenditures

Code Y. Expenditures for removal of barriers

Code Z. Itemized deductions

Code AA. Contributions to a capital construction fund (CCF)

Code AB. Penalty on early withdrawal of savings

Code AC. Interest expense allocated to debt-financed distributions

Code AD. Interest expense on working interest in oil or gas

Code AE. Deductions—portfolio income

Codes AF through AJ. Reserved for future use

Code ZZ. Other

14. Self-employment earnings (loss)

Note: If you have a section 179 deduction or any partner-level deductions, see the Partner’s Instructions (Form 1065) before

completing Schedule SE (Form 1040).

Code A. Net earnings (loss) from self-employment

Code B. Gross farming or fishing income

Code C. Gross non-farm income

15. Credits

Code A. Zero-emissions nuclear power production credit

Code B. Credit for production from advanced nuclear power facilities

Code C. Low-income housing credit (section 42(j)(5)) from post-2007 buildings

Code D. Low-income housing credit (other) from post-2007 buildings

Code E. Qualified rehabilitation expenditures (rental real estate)

Code F. Other rental real estate credits

Code G. Other rental credits

Code H. Undistributed capital gains credit

Code I. Biofuel producer credit

Code J. Work opportunity credit

Code K. Disabled access credit

Code L. Empowerment zone employment credit

Code M. Credit for increasing research activities

Code N. Credit for employer social security and Medicare taxes paid on certain employee tips

Code O. Backup withholding

Code P. Unused investment credit from the qualifying advanced coal project credit or qualifying gasification project credit

allocated from cooperatives

Code Q. Unused investment credit from the qualifying advanced energy project credit allocated from cooperatives

Code R. Unused investment credit from the advanced manufacturing investment credit allocated from cooperatives

22

Instructions for Form 8865 (2025)

Box Number / Item

Code S. Unused investment credit from the clean electricity investment credit allocated from cooperatives

Code T. Unused investment credit from the energy credit allocated from cooperatives

Code U. Unused investment credit from the rehabilitation credit allocated from cooperatives

Code V. Advanced manufacturing production credit

Code W. Clean electricity production credit

Code X. Clean fuel production credit

Code Y. Clean hydrogen production credit

Code Z. Orphan drug credit

Code AA. Enhanced oil recovery credit

Code AB. Renewable electricity production credit

Code AC. Biodiesel, renewable diesel, or sustainable aviation fuels credit

Code AD. New markets credit

Code AE. Small employer pension plan startup costs credit

Code AF. Small employer auto-enrollment credit

Code AG. Small employer military spouse participation credit

Code AH. Credit for employer-provided childcare facilities and services

Code AI. Low sulfur diesel fuel production credit

Code AJ. Qualified railroad track maintenance credit

Code AK. Credit for oil and gas production from marginal wells

Code AL. Distilled spirits credit

Code AM. Energy efficient home credit

Code AN. Reserved for future use

Code AO. Alternative fuel vehicle refueling property credit

Code AP. Clean renewable energy bond credit

Code AQ. New clean renewable energy bond credit

Code AR. Qualified energy conservation bond credit

Code AS. Qualified zone academy bond credit

Code AT. Qualified school construction bond credit

Code AU. Build America bond credit

Code AV. Credit for employer differential wage payments

Code AW. Carbon oxide sequestration credit

Code AX. Carbon oxide sequestration credit recapture

Code AY. New clean vehicle credit

Code AZ. Qualified commercial clean vehicle credit

Code BA. Credit for small employer health insurance premiums

Code BB. Employer credit for paid family and medical leave

Code BC. Eligible credits from transferor(s) under section 6418

Codes BD through BG. Reserved for future use

Code ZZ. Other

17. Alternative minimum tax (AMT) items

Code A. Post-1986 depreciation adjustment

Code B. Adjusted gain or loss

Code C. Depletion (other than oil & gas)

Code D. Oil, gas, and geothermal—gross income

Code E. Oil, gas, and geothermal—deductions

Code F. Other AMT items

18. Tax-exempt income and nondeductible expenses

Code A. Tax-exempt interest income

Code B. Other tax-exempt income

Code C. Nondeductible expenses

19. Distributions

Code A. Cash and marketable securities

Code B. Distribution subject to section 737

Code C. Other property

20. Other information

Instructions for Form 8865 (2025)

23

Box Number / Item

Code A. Investment income

Code B. Investment expenses

Code C. Fuel tax credit information

Code D. Qualified rehabilitation expenditures (other than rental real estate)

Code E. Basis of energy property

Codes F through G. Recapture of low-income housing credit

Code H. Recapture of investment credit

Code I. Recapture of other credits

Code J. Look-back interest—completed long-term contracts

Code K. Look-back interest—income forecast method

Code L. Dispositions of property with section 179 deductions

Code M. Recapture of section 179 deduction

Code N. Business interest expense (information item)

Code O. Section 453(I)(3) information

Code P. Section 453A(c) information

Code Q. Section 1260(b) information

Code R. Interest allocable to production expenditures

Code S. Capital construction fund (CCF) nonqualified withdrawals

Code T. Depletion information—oil and gas

Code U. Section 743(b) basis adjustment

Code V. Unrelated business taxable income

Code X. Reserved for future use

Code Y. Net investment income

Code Z. Section 199A information

Code AA. Section 704(c) information

Code AB. Section 751 gain (loss)

Code AC. Section 1(h)(5) collectibles gain (loss)

Code AD. Section 1(h)(6) unrecaptured section 1250 gain

Code AE. Excess taxable income

Code AF. Excess business interest income

Code AG. Gross receipts for section 448(c)

Code AH. Noncash charitable contributions

Code AI. Interest and tax on deferred compensation to partners

Code AJ. Excess business loss limitation

Code AK. Gain from mark-to-market election

Code AL. Section 721(c) partnership

Code AM. Section 1061 information

Code AN. Farming and fishing business

Code AO. PTP information

Code AP. Inversion gain

Code AQ. Conservation reserve program payments

Code AR. IRA disclosure

Code AS. Qualifying advanced coal project property and qualifying gasification project property

Code AT. Qualifying advanced energy project property

Code AU. Advanced manufacturing investment property

Code AV. Clean electricity investment property

Code AW. Reportable transactions

Code AX. Corporate alternative minimum tax (CAMT)

Code AY. Foreign partners, Form 8990, Schedule A

Codes AZ through BD. Reserved for future use

Code ZZ. Other

24

Instructions for Form 8865 (2025)

Codes for Principal Business Activity

and Principal Product or Service

This list of Principal Business Activities and their

associated codes is designed to classify an

enterprise by the type of activity in which it is

engaged to facilitate the administration of the

Internal Revenue Code. These Principal Business

Activity Codes are based on the North American

Industry Classification System.

Agriculture, Forestry, Fishing,

and Hunting

Crop Production

111100 Oilseed & Grain Farming

111210 Vegetable & Melon Farming

(including potatoes & yams)

111300 Fruit & Tree Nut Farming

111400 Greenhouse, Nursery, &

Floriculture Production

111900 Other Crop Farming

(including tobacco, cotton,

sugarcane, hay, peanut,

sugar beet, & all other crop

farming)

Animal Production

112111 Beef Cattle Ranching &

Farming

112112 Cattle Feedlots

112120 Dairy Cattle & Milk Production

112210 Hog & Pig Farming

112300 Poultry & Egg Production

112400 Sheep & Goat Farming

112510 Aquaculture (including

shellfish & finfish farms &

hatcheries)

112900 Other Animal Production

Forestry and Logging

113110 Timber Tract Operations

113210 Forest Nurseries & Gathering

of Forest Products

113310 Logging

Fishing, Hunting, and Trapping

114110 Fishing

114210 Hunting & Trapping

Support Activities for Agriculture

and Forestry

115110 Support Activities for Crop

Production (including cotton

ginning, soil preparation,

planting, & cultivating)

115210 Support Activities for Animal

Production (including

Farriers)

115310 Support Activities for Forestry

Mining

211120 Crude Petroleum Extraction

211130 Natural Gas Extraction

212110 Coal Mining

212200 Metal Ore Mining

212310 Stone Mining & Quarrying

212320 Sand, Gravel, Clay, &

Ceramic & Refractory

Minerals Mining & Quarrying

212390 Other Nonmetallic Mineral

Mining & Quarrying

213110 Support Activities for Mining

Utilities

221100 Electric Power Generation,

Transmission, & Distribution

221210 Natural Gas Distribution

221300 Water, Sewage, & Other

Systems

221500 Combination Gas & Electric

Construction

Construction of Buildings

236110 Residential Building

Construction

236200 Nonresidential Building

Construction

Heavy and Civil Engineering

Construction

237100 Utility System Construction

Using the list of activities and codes below,

determine from which activity the business derives

the largest percentage of its “total receipts.” Total

receipts is defined as the sum of gross receipts or

sales (Schedule B, line 1a); all other income

reported on Schedule B, lines 4 through 7; income

reported on Schedule K, lines 3a, 5, 6a, and 7;

income or net gain reported on Schedule K, lines

8, 9a, 10, and 11; and income or net gain reported

on Form 8825, lines 2, 19, and 20a. If the business

237210 Land Subdivision

237310 Highway, Street, & Bridge

Construction

237990 Other Heavy & Civil

Engineering Construction

Specialty Trade Contractors

238100 Foundation, Structure, &

Building Exterior Contractors

(including framing carpentry,

masonry, glass, roofing, &

siding)

238210 Electrical Contractors

238220 Plumbing, Heating, &

Air-Conditioning Contractors

238290 Other Building Equipment

Contractors

238300 Building Finishing

Contractors (including

drywall, insulation, painting,

wallcovering, flooring, tile, &

finish carpentry)

238900 Other Specialty Trade

Contractors (including site

preparation)

Manufacturing

Food Manufacturing

311110 Animal Food Mfg

311200 Grain & Oilseed Milling

311300 Sugar & Confectionery

Product Mfg

311400 Fruit & Vegetable Preserving

& Specialty Food Mfg

311500 Dairy Product Mfg

311610 Animal Slaughtering and

Processing

311710 Seafood Product Preparation

& Packaging

311800 Bakeries, Tortilla & Dry Pasta

Mfg

311900 Other Food Mfg (including

coffee, tea, flavorings, &

seasonings)

Beverage and Tobacco Product

Manufacturing

312110 Soft Drink & Ice Mfg

312120 Breweries

312130 Wineries

312140 Distilleries

312200 Tobacco Manufacturing

Textile Mills and Textile Product

Mills

313000 Textile Mills

314000 Textile Product Mills

Apparel Manufacturing

315100 Apparel Knitting Mills

315210 Cut & Sew Apparel

Contractors

315250 Cut & Sew Apparel Mfg

(except Contractors)

315990 Apparel Accessories & Other

Apparel Mfg

Leather and Allied Product

Manufacturing

316110 Leather & Hide Tanning &

Finishing

316210 Footwear Mfg (including

rubber & plastics)

316990 Other Leather & Allied

Product Mfg

Wood Product Manufacturing

321110 Sawmills & Wood

Preservation

321210 Veneer, Plywood, &

Engineered Wood Product

Mfg

321900 Other Wood Product Mfg

purchases raw materials and supplies them to a

subcontractor to produce the finished product, but

retains title to the product, the business is

considered a manufacturer and must use one of

the manufacturing codes (311110–339900).

Once the Principal Business Activity is

determined, enter the six-digit code from the list

below on page 1, item H7. Also enter a brief

description of the business activity in item H8.

Paper Manufacturing

322100 Pulp, Paper, & Paperboard

Mills

322200 Converted Paper Product Mfg

Printing and Related Support

Activities

323100 Printing & Related Support

Activities

Petroleum and Coal Products

Manufacturing

324110 Petroleum Refineries

(including integrated)

324120 Asphalt Paving, Roofing, &

Saturated Materials Mfg

324190 Other Petroleum & Coal

Products Mfg

Chemical Manufacturing

325100 Basic Chemical Mfg

325200 Resin, Synthetic Rubber, &

Artificial & Synthetic Fibers &

Filaments Mfg

325300 Pesticide, Fertilizer, & Other

Agricultural Chemical Mfg

325410 Pharmaceutical & Medicine

Mfg

325500 Paint, Coating, & Adhesive

Mfg

325600 Soap, Cleaning Compound, &

Toilet Preparation Mfg

325900 Other Chemical Product &

Preparation Mfg

Plastics and Rubber Products

Manufacturing

326100 Plastics Product Mfg

326200 Rubber Product Mfg

Nonmetallic Mineral Product

Manufacturing

327100 Clay Product & Refractory

Mfg

327210 Glass & Glass Product Mfg

327300 Cement & Concrete Product

Mfg

327400 Lime & Gypsum Product Mfg

327900 Other Nonmetallic Mineral

Product Mfg

Primary Metal Manufacturing

331110 Iron & Steel Mills & Ferroalloy

Mfg

331200 Steel Product Mfg From

Purchased Steel

331310 Alumina & Aluminum

Production & Processing

331400 Nonferrous Metal (except

Aluminum) Production &

Processing

331500 Foundries

Fabricated Metal Product

Manufacturing

332110 Forging & Stamping

332210 Cutlery & Handtool Mfg

332300 Architectural & Structural

Metals Mfg

332400 Boiler, Tank, & Shipping

Container Mfg

332510 Hardware Mfg

332610 Spring & Wire Product Mfg

332700 Machine Shops; Turned

Product; & Screw, Nut, & Bolt

Mfg

332810 Coating, Engraving, Heat

Treating, & Allied Activities

332900 Other Fabricated Metal

Product Mfg

Machinery Manufacturing

333100 Agriculture, Construction, &

Mining Machinery Mfg

333200 Industrial Machinery Mfg

333310 Commercial & Service

Industry Machinery Mfg

333410 Ventilation, Heating,

Air-Conditioning, &

Commercial Refrigeration

Equipment Mfg

333510 Metalworking Machinery Mfg

333610 Engine, Turbine & Power

Transmission Equipment Mfg

333900 Other General Purpose

Machinery Mfg

Computer and Electronic Product

Manufacturing

334110 Computer & Peripheral

Equipment Mfg

334200 Communications Equipment

Mfg

334310 Audio & Video Equipment

Mfg

334410 Semiconductor & Other

Electronic Component Mfg

334500 Navigational, Measuring,

Electromedical, & Control

Instruments Mfg

334610 Manufacturing & Reproducing

Magnetic & Optical Media

Electrical Equipment, Appliance,

and Component Manufacturing

335100 Electric Lighting Equipment

Mfg

335200 Household Appliance Mfg

335310 Electrical Equipment Mfg

335900 Other Electrical Equipment &

Component Mfg

Transportation Equipment

Manufacturing

336100 Motor Vehicle Mfg

336210 Motor Vehicle Body & Trailer

Mfg

336300 Motor Vehicle Parts Mfg

336410 Aerospace Product & Parts

Mfg

336510 Railroad Rolling Stock Mfg

336610 Ship & Boat Building

336990 Other Transportation

Equipment Mfg

Furniture and Related Product

Manufacturing

337000 Furniture & Related Product

Manufacturing

Miscellaneous Manufacturing

339110 Medical Equipment &

Supplies Mfg

339900 Other Miscellaneous

Manufacturing

Wholesale Trade

Merchant Wholesalers, Durable

Goods

423100 Motor Vehicle & Motor Vehicle

Parts & Supplies

423200 Furniture & Home Furnishings

423300 Lumber & Other Construction

Materials

423400 Professional & Commercial

Equipment & Supplies

423500 Metal & Mineral (except

Petroleum)

423600 Household Appliances &

Electrical & Electronic Goods

423700 Hardware, & Plumbing &

Heating Equipment &

Supplies

423800 Machinery, Equipment, &

Supplies

423910 Sporting & Recreational

Goods & Supplies

25

Codes for Principal Business Activity and Principal Product or Service (Continued)

423920 Toy & Hobby Goods &

Supplies

423930 Recyclable Materials

423940 Jewelry, Watch, Precious

Stone, & Precious Metals

423990 Other Miscellaneous Durable

Goods

Merchant Wholesalers, Nondurable

Goods

424100 Paper & Paper Products

424210 Drugs & Druggists’ Sundries

424300 Apparel, Piece Goods, &

Notions

424400 Grocery & Related Products

424500 Farm Product Raw Materials

424600 Chemical & Allied Products

424700 Petroleum & Petroleum

Products

424800 Beer, Wine, & Distilled

Alcoholic Beverages

424910 Farm Supplies

424920 Book, Periodical, &

Newspapers

424930 Flower, Nursery Stock, &

Florists’ Supplies

424940 Tobacco Products &

Electronic Cigarettes

424950 Paint, Varnish, & Supplies

424990 Other Miscellaneous

Nondurable Goods

Wholesale Trade Agents & Agents

and Brokers

425120 Wholesale Trade Agents &

Brokers

Retail Trade

Motor Vehicle and Parts Dealers

441110 New Car Dealers

441120 Used Car Dealers

441210 Recreational Vehicle Dealers

441222 Boat Dealers

441227 Motorcycle, ATV, & All Other

Motor Vehicle Dealers

441300 Automotive Parts,

Accessories, & Tire Retailers

Building Material and Garden

Equipment and Supplies Dealers

444110 Home Centers

444120 Paint & Wallpaper Stores

444140 Hardware Retailers

444180 Other Building Material

Dealers

444200 Lawn & Garden Equipment &

Supplies Retailers

Food and Beverage Retailers

445110 Supermarkets and Other

Grocery (except

Convenience) Retailers

445131 Convenience Retailers

445132 Vending Machine Operators

445230 Fruit & Vegetable Retailers

445240 Meat Retailers

445250 Fish & Seafood Retailers

445291 Baked Goods Retailers

445292 Confectionery & Nut Retailers

445298 All Other Specialty Food

Retailers

445320 Beer, Wine, & Liquor

Retailers

Furniture and Home Furnishings

Retailers

449110 Furniture Retailers

449121 Floor Covering Retailers

449122 Window Treatment Retailers

449129 All Other Home Furnishings

Retailers

Electronics and Appliance Retailers

449210 Electronics & Appliance

Retailers (including

computers)

General Merchandise Retailers

455110 Department Stores

455210 Warehouse Clubs,

Supercenters, & Other Merch

Retailers

26

Health and Personal Care Retailers

456110 Pharmacies & Drug Retailers

456120 Cosmetics, Beauty Supplies,

& Perfume Retailers

456130 Optical Goods Retailers

446190 Other Health & Personal Care

Retailers

Gasoline Stations & Fuel Dealers

457100 Gasoline Stations (including

convenience stores with gas)

457210 Fuel Dealers (including

Heating Oil & Liquefied

Petroleum)

Clothing & Accessories Retailers

458110 Clothing & Clothing

Accessories Retailers

458210 Shoe Retailers

458310 Jewelry Retailers

458320 Luggage & Leather Goods

Retailers

Sporting, Hobby, Book, Musical

Instrument, & Miscellaneous

Retailers

459110 Sporting Goods Retailers

459120 Hobby, Toy, & Game Retailers

459130 Sewing, Needlework, & Piece

Goods Retailers

459140 Musical Instrument &

Supplies Retailers

459210 Book Retailers & News

Dealers (including

newsstands)

459310 Florists

459410 Office Supplies & Stationery

Retailers

459420 Gift, Novelty, & Souvenir

Retailers

459510 Used Merchandise Retailers

459910 Pet & Pet Supplies Retailers

459920 Art Dealers

459930 Manufactured (Mobile) Home

Dealers

459990 All Other Miscellaneous

Retailers (including tobacco,

candle, & trophy retailers)

Nonstore Retailers

Nonstore retailers sell all

types of merchandise using

such methods as Internet,

mail-order catalogs,

interactive television, or direct

sales. These types of

Retailers should select the

PBA associated with their

primary line of products sold.

For example, establishments

primarily selling prescription

and non-prescription drugs,

select PBA code 456110

Pharmacies & Drug Retailers.

Transportation and

Warehousing

Air, Rail, and Water Transportation

481000 Air Transportation

482110 Rail Transportation

483000 Water Transportation

Truck Transportation

484110 General Freight Trucking,

Local

484120 General Freight Trucking,

Long-Distance

484200 Specialized Freight Trucking

Transit and Ground Passenger

Transportation

485110 Urban Transit Systems

485210 Interurban & Rural Bus

Transportation

485310 Taxi Service

485320 Limousine Service

485410 School & Employee Bus

Transportation

485510 Charter Bus Industry

485990 Other Transit & Ground

Passenger Transportation

Pipeline Transportation

486000 Pipeline Transportation

Scenic & Sightseeing

Transportation

487000 Scenic & Sightseeing

Transportation

Support Activities for

Transportation

488100 Support Activities for Air

Transportation

488210 Support Activities for Rail

Transportation

488300 Support Activities for Water

Transportation

488410 Motor Vehicle Towing

488490 Other Support Activities for

Road Transportation

488510 Freight Transportation

Arrangement

488990 Other Support Activities for

Transportation

Couriers and Messengers

492110 Couriers & Express Delivery

Services

492210 Local Messengers & Local

Delivery

Warehousing and Storage

493100 Warehousing & Storage

(except lessors of

mini-warehouses &

self-storage units)

Information

Motion Picture and Sound

Recording Industries

512100 Motion Picture & Video

Industries (except video

rental)

512200 Sound Recording Industries

Publishing Industries

513110 Newspaper Publishers

513120 Periodical Publishers

513130 Book Publishers

513140 Directory & Mailing List

Publishers

513190 Other Publishers

513210 Software Publishers

Broadcasting & Content Providers

& Telecommunications

516100 Radio & Television

Broadcasting Stations

516210 Media Streaming, Social

Networks, & Other Content

Providers

517000 Telecommunications

(including Wired, Wireless,

Satellite, Cable & Other

Program Distribution,

Resellers, Agents, Other

Telecommunications, &

Internet Service Providers)

Data Processing, Web Search

Portals, & Other Information

Services

518210 Computing Infrastructure

Providers, Data Processing,

Web Hosting, & Related

Services

519200 Web Search Portals,

Libraries, Archives, & Other

Info. Services

Finance and Insurance

Depository Credit Intermediation

522110 Commercial Banking

522130 Credit Unions

522180 Savings Institutions & Other

Depository Credit

Intermediation

Nondepository Credit

Intermediation

522210 Credit Card Issuing

522220 Sales Financing

522291 Consumer Lending

522292 Real Estate Credit (including

mortgage bankers &

originators)

522299 Intl, Secondary Market, &

Other Nondepo. Credit

Intermediation

Activities Related to Credit

Intermediation

522300 Activities Related to Credit

Intermediation (including loan

brokers, check clearing, &

money transmitting)

Securities, Commodity Contracts,

and Other Financial Investments

and Related Activities

523150 Investment Banking &

Securities Intermediation

523160 Commodity Contracts

Intermediation

523210 Securities & Commodity

Exchanges

523900 Other Financial Investment

Activities (including portfolio

management & investment

advice)

Insurance Carriers and Related

Activities

524110 Direct Life, Health, & Medical

Insurance Carriers

524120 Direct Insurance (except Life,

Health, & Medical) Carriers

524210 Insurance Agencies &

Brokerages

524290 Other Insurance Related

Activities (including

third-party administration of

insurance and pension funds)

Funds, Trusts, and Other Financial

Vehicles

525100 Insurance & Employee

Benefit Funds

525910 Open-End Investment Funds

(Form 1120-RIC,)

525920 Trusts, Estates, & Agency

Accounts

525990 Other Financial Vehicles

(including mortgage REITs

and closed-end investment

funds)

“Offices of Bank Holding Companies”

and “Offices of Other Holding

Companies” are located under

Management of Companies

(Holding Companies) below.

Real Estate and Rental and

Leasing

Real Estate

531110 Lessors of Residential

Buildings & Dwellings

(including equity REITs)

531120 Lessors of Nonresidential

Buildings (except

Mini-Warehouses) (including

equity REITs)

531130 Lessors of Mini-Warehouses

& Self-Storage Units

(including equity REITs)

531190 Lessors of Other Real Estate

Property (including equity

REITs)

531210 Offices of Real Estate Agents

& Brokers

531310 Real Estate Property

Managers

531320 Offices of Real Estate

Appraisers

531390 Other Activities Related to

Real Estate

Rental and Leasing Services

532100 Automotive Equipment Rental

& Leasing

532210 Consumer Electronics &

Appliances Rental

532281 Formal Wear & Costume

Rental

532282 Video Tape & Disc Rental

532283 Home Health Equipment

Rental

532284 Recreational Goods Rental

532289 All Other Consumer Goods

Rental

532310 General Rental Centers

532400 Commercial & Industrial

Machinery & Equipment

Rental & Leasing

Codes for Principal Business Activity and Principal Product or Service (Continued)

Lessors of Nonfinancial Intangible

Assets (except copyrighted works)

533110 Lessors of Nonfinancial

Intangible Assets (except

copyrighted works)

Professional, Scientific, and

Technical Services

Legal Services

541110 Offices of Lawyers

541190 Other Legal Services

Accounting, Tax Preparation,

Bookkeeping, and Payroll Services

541211 Offices of Certified Public

Accountants

541213 Tax Preparation Services

541214 Payroll Services

541219 Other Accounting Services

Architectural, Engineering, and

Related Services

541310 Architectural Services

541320 Landscape Architecture

Services

541330 Engineering Services

541340 Drafting Services

541350 Building Inspection Services

541360 Geophysical Surveying &

Mapping Services

541370 Surveying & Mapping (except

Geophysical) Services

541380 Testing Laboratories &

Services

Specialized Design Services

541400 Specialized Design Services

(including interior, industrial,

graphic, & fashion design)

Computer Systems Design and

Related Services

541511 Custom Computer

Programming Services

541512 Computer Systems Design

Services

541513 Computer Facilities

Management Services

541519 Other Computer Related

Services

Other Professional, Scientific, and

Technical Services

541600 Management, Scientific, &

Technical Consulting

Services

541700 Scientific Research &

Development Services

541800 Advertising & Public

Relations, & Related Services

541910 Marketing Research & Public

Opinion Polling

541920 Photographic Services

541930 Translation & Interpretation

Services

541940 Veterinary Services

541990 All Other Professional,

Scientific, & Technical

Services

Management of Companies

(Holding Companies)

551111 Offices of Bank Holding

Companies

551112 Offices of Other Holding

Companies

Administrative and Support and

Waste Management and

Remediation Services

Administrative and Support

Services

561110 Office Administrative

Services

561210 Facilities Support Services

561300 Employment Services

561410 Document Preparation

Services

561420 Telephone Call Centers

561430 Business Service Centers

(including private mail centers

& copy shops)

561440 Collection Agencies

561450 Credit Bureaus

561490 Other Business Support

Services (including

repossession services, court

reporting, & stenotype

services)

561500 Travel Arrangement &

Reservation Services

561600 Investigation & Security

Services

561710 Exterminating & Pest Control

Services

561720 Janitorial Services

561730 Landscaping Services

561740 Carpet & Upholstery Cleaning

Services

561790 Other Services to Buildings &

Dwellings

561900 Other Support Services

(including packaging &

labeling services, &

convention & trade show

organizers)

Waste Management and

Remediation Services

562000 Waste Management &

Remediation Services

Educational Services

611000 Educational Services

(including schools, colleges,

& universities)

Health Care and Social

Assistance

Offices of Physicians and Dentists

621111 Offices of Physicians (except

mental health specialists)

621112 Offices of Physicians, Mental

Health Specialists

621210 Offices of Dentists

Offices of Other Health

Practitioners

621310 Offices of Chiropractors

621320 Offices of Optometrists

621330 Offices of Mental Health

Practitioners (except

Physicians)

621340 Offices of Physical,

Occupational & Speech

Therapists, & Audiologists

621391 Offices of Podiatrists

621399 Offices of All Other

Miscellaneous Health

Practitioners

Outpatient Care Centers

621410 Family Planning Centers

621420 Outpatient Mental Health &

Substance Abuse Centers

621491 HMO Medical Centers

621492 Kidney Dialysis Centers

621493 Freestanding Ambulatory

Surgical & Emergency

Centers

621498 All Other Outpatient Care

Centers

Medical and Diagnostic

Laboratories

621510 Medical & Diagnostic

Laboratories

Home Health Care Services

621610 Home Health Care Services

Other Ambulatory Health Care

Services

621900 Other Ambulatory Health

Care Services (including

ambulance services & blood

& organ banks)

Hospitals

622000 Hospitals

Nursing and Residential Care

Facilities

623000 Nursing & Residential Care

Facilities

Social Assistance

624100 Individual & Family Services

624200 Community Food & Housing,

& Emergency & Other Relief

Services

624310 Vocational Rehabilitation

Services

624410 Childcare Services

Arts, Entertainment, and

Recreation

Performing Arts, Spectator Sports,

and Related Industries

711100 Performing Arts Companies

711210 Spectator Sports (including

sports clubs & racetracks)

711300 Promoters of Performing Arts,

Sports, & Similar Events

711410 Agents & Managers for

Artists, Athletes, Entertainers,

& Other Public Figures

711510 Independent Artists, Writers,

& Performers

Museums, Historical Sites, and

Similar Institutions

712100 Museums, Historical Sites, &

Similar Institutions

Amusement, Gambling, and

Recreation Industries

713100 Amusement Parks & Arcades

713200 Gambling Industries

713900 Other Amusement &

Recreation Industries

(including golf courses, skiing

facilities, marinas, fitness

centers, & bowling centers)

Accommodation and Food

Services

Accommodation

721110 Hotels (except Casino Hotels)

& Motels

721120 Casino Hotels

721191 Bed & Breakfast Inns

721199 All Other Traveler

Accommodation

721210 RV (Recreational Vehicle)

Parks & Recreational Camps

721310 Rooming & Boarding Houses,

Dormitories, & Workers’

Camps

Food Services and Drinking Places

722300 Special Food Services

(including food service

contractors & caterers)

722410 Drinking Places (Alcoholic

Beverages)

722511 Full Service Restaurants

722513 Limited Service Restaurants

722514 Cafeterias, Grill Buffets,

Buffets

722515 Snack & Nonalcoholic

Beverage Bars

Other Services

Repair and Maintenance

811110 Automotive Mechanical &

Electrical Repair &

Maintenance

811120 Automotive Body, Paint,

Interior, & Glass Repair

811190 Other Automotive Repair &

Maintenance (including oil

change & lubrication shops &

car washes)

811210 Electronic & Precision

Equipment Repair &

Maintenance

811310 Commercial & Industrial

Machinery & Equipment

(except Automotive &

Electronic) Repair &

Maintenance

811410 Home & Garden Equipment &

Appliance Repair &

Maintenance

811420 Reupholstery & Furniture

Repair

811430 Footwear & Leather Goods

Repair

811490 Other Personal & Household

Goods Repair & Maintenance

Personal and Laundry Services

812111 Barber Shops

812112 Beauty Salons

812113 Nail Salons

812190 Other Personal Care Services

(including diet & weight

reducing centers)

812210 Funeral Homes & Funeral

Services

812220 Cemeteries & Crematories

812310 Coin-Operated Laundries &

Drycleaners

812320 Drycleaning & Laundry

Services (except

Coin-Operated)

812330 Linen & Uniform Supply

812910 Pet Care (except Veterinary)

Services

812920 Photofinishing

812930 Parking Lots & Garages

812990 All Other Personal Services

Religious, Grantmaking, Civic,

Professional, and Similar

Organizations

813000 Religious, Grantmaking,

Civic, Professional, & Similar

Organizations (including

condominium and

homeowners associations)

Other

999999 Unclassified Establishments

(unable to classify)

27

Index

10% interest 5

50% interest 5

A

Acquisitions 3

Analysis of partners’ capital accounts 17

Attached statements 16

B

Balance sheets per books 17

C

Categories of Filers 2

Category 1 filer 2, 8, 10

Category 2 filer 2, 8

Category 3 filer 2, 8, 10

Category 4 filer 3, 8

Change in a Proportional Interest 5

Changes in Proportional Interests 3

Consolidated Return 7

Constructive Ownership 5

Control of a Corporation 5

Corrections to Form 8865 6

D

Definitions 5

Dispositions 3

E

Exceptions for Filing:

Category 4 filers 4

Exceptions to Filing 3

Constructive owners 3

Multiple Category 1 filers 3

F

Foreign Address 7

28

Foreign Partnership 5

Future Developments 1

G

General Instructions 1

General Reporting Instructions for

Schedule K-1 16

H

Hyperinflationary Exception 8

I

Identifying Numbers and Addresses 7

L

List of Codes Used in Schedule K-1 (Form

8865) 21

P

Partnership 5

Penalties 6

Purpose of Form 1

R

Relief for Category 1 and 2 filers 4

S

Schedule A-1. Certain partners of Foreign

Partnership 10

Schedule A-2. Foreign Partners of Section

721(c) Partnership 10

Schedule A-3. Affiliation Schedule 11

Schedule A. Constructive Ownership of

Partnership Interest 10

Schedule B. Income Statement–Trade or

Business Income 11

Schedule D. Capital Gains and Losses 11

Schedule G (Form 8865). Statement of

Application of the Gain Deferral Method

Under Section 721(c) 11

Schedule H (Form 8865). Acceleration

Events and Exceptions Reporting

Relating to Gain Deferral Method Under

Section 721(c) 13

Schedule N. Transactions Between

Controlled Foreign Partnership and

Partners or Other Related Entities 17

Schedule O (Form 8865). Transfer of

Property to a Foreign Partnership 17

Schedule P (Form 8865). Acquisitions,

Dispositions, and Changes of Interests

in a Foreign Partnership 19

Schedules K-2 (Form 8865), Partners’

Distributive Share Items—International,

and K-3 (Form 8865), Partner’s Share of

Income, Deductions, Credits,

etc.—International 17

Schedules K, Partners’ Distributive Share

Items and K-1 (Form 8865), Partner’s

Share of Income, Deductions, Credits,

Etc. 15

Specific Instructions 6

T

Tax Year 7

Treaty-based Return Positions 6

U

U.S. Person 5

W

What’s New 1

When To File 4

Who Must File 1