Required installments. If the partnership uses the

adjusted seasonal installment method and/or the

annualized income installment method, enter the amounts 

from line 43. If neither of those methods is used, enter

25% of line 3 above in each column

Department of the Treasury

Internal Revenue Service

Penalty for Underpayment of Estimated

Section 1446 Tax by Partnerships

© Attach to Form 8804.

OMB No. 1545-1119

Name Employer identification number

Reasons for Filing—Check the boxes below that apply. If any boxes are checked, the partnership must 

file Schedule A (Form 8804) even if it does not owe a penalty (see instructions).

1

2

3

4

5

6

7

8

9

10

11

12

Enter the total section 1446 tax shown on the partnership’s 2007 Form 8804, line 5e. If less than $500,

do not complete or file this form. The partnership does not owe the penalty 

Enter the total section 1446 tax that would be due for 2007, without regard to partner certificates, computed 

using the effectively connected taxable income (ECTI) allocable to foreign partners for 2006. 

Caution: This line 2 amount only applies if certain conditions are met (see instructions) 

Enter the smaller of line 1 or line 2. If the partnership is required to skip line 2, enter the amount from

line 1

Installment due dates. Enter in columns (a) through (d)

the 15th day of the 4th, 6th, 9th, and 12th months of the 

partnership’s tax year

Complete lines 7 through 13 of one column before

going to the next column.

Estimated section 1446 tax paid or credited for each

period (see instructions). For column (a) only, enter the

amount from line 6 on line 10 

Enter amount, if any, from line 13 of the preceding column

Add lines 6 and 7

Add amounts on lines 11 and 12 of the preceding column

Subtract line 9 from line 8. If zero or less, enter -0-

If the amount on line 10 is zero, subtract line 8 from line 

9. Otherwise, enter -0-

Underpayment. If line 10 is less than or equal to line 5,

subtract line 10 from line 5. Then go to line 7 of the next

column. Otherwise, go to line 13 

Overpayment. If line 5 is less than line 10, subtract line 

5 from line 10. Then go to line 7 of the next column 

Go to Part VII on page 4 to figure the penalty. Do not go to Part VII if there are no entries on line 12—no penalty is owed.

(a) (b) (c) (d)

Schedule A (Form 8804) 2007

1

3

4

5

6

7

8

9

10

11

12

Schedule A

(Form 8804)

Cat. No. 40853F

2

13

Part I

For Paperwork Reduction Act Notice, see page 7.

Figuring the Underpayment

The partnership is using the annualized income installment method.

The partnership is using the adjusted seasonal installment method.

Part II Current Year and Prior Year Safe Harbors

Part III

Note. Generally, the partnership is not required to file this Schedule A (see Part I below for exceptions) because the IRS will figure 

any penalty owed and bill the partnership. However, the partnership may still use this Schedule A to figure the penalty. If so, enter 

the amount from page 4, line 61 on line 8 of Form 8804, but do not attach this Schedule A.

13

2007
Schedule A (Form 8804) 2007 Page 2

Divide the amount in each column on line 14a by the amount in 

column (d) on line 16a.

17

17

18 Divide the amount in each column on line 14b by the amount in 

column (d) on line 16b. 18

Divide the amount in each column on line 14c by the amount in 

column (d) on line 16c.

19

19

20 Add lines 17 through 19. 20

21 Divide line 20 by 3. 21

22a Divide line 15 by line 21. 22a

25 Multiply line 24 by 35%. 25

26a Divide the amount in columns (a) through (c) on line 16a by the

amount in column (d) on line 16a. 26a

Divide the amount in columns (a) through (c) on line 16b by the

amount in column (d) on line 16b.

b

26b

Divide the amount in columns (a) through (c) on line 16c by the

amount in column (d) on line 16c.

c

26c

27 Add lines 26a through 26c. 27

28 Divide line 27 by 3. 28

Multiply the amount in columns (a) through (c) of line 25 by

columns (a) through (c) of line 28. In column (d), enter the amount 

from line 25, column (d).

29

29

(a) (b) (c) (d)

First 11

months

First 8

months

First 5

months

First 3

months

14 Enter effectively connected taxable income allocable to all foreign

partners for the following periods:

Tax year beginning in 2004 14a

Tax year beginning in 2005 14b

Tax year beginning in 2006 14c

a

b

c

15 Enter effectively connected taxable income allocable to all foreign 

partners for each period for the tax year beginning in 2007 (see

instructions for the treatment of extraordinary items). 15

First 9

months

First 6

months

First 4

months Entire year Enter effectively connected taxable income allocable to all foreign

partners for the following periods:

16

Tax year beginning in 2004 16a

Tax year beginning in 2005 16b

Tax year beginning in 2006 16c

a

b

c

Adjusted Seasonal Installment Method (Caution: Use this method only if the base period percentage

for any 6 consecutive months is at least 70%. See instructions.)

Check this box if the partnership has elected to attach a schedule 

that expands lines 15 and 22 through 25 to reflect Reg.

1.1446-3(a)(2) (see instructions) ©

23 Reduction to line 22c amount for valid certifications received from 

foreign partners under Regulations section 1.1446-6T (see

instructions for effective dates before completing this line). 23

24 Subtract line 23 from line 22c. If zero or less, enter -0-. 24

Part IV

Extraordinary items (see instructions). 22b

Combine lines 22a and 22b. 22c

b

c
Add the amounts in all preceding columns of line 43 (see

instructions).

38

40

Adjusted seasonal or annualized income installments.

Subtract line 38 from line 37. If zero or less, enter -0-.

39

41

Required Installments

4th

installment

3rd

installment

2nd

installment

1st

installment

37 If only Part IV or Part V is completed, enter the amount in each

column from line 29 or line 36. If both parts are completed,

enter the smaller of the amounts in each column from line 29

or line 36.

39

40 Enter 25% of line 1 in each column.

42

Subtract line 43 of the preceding column from line 42 of the

preceding column.

41

43

42 Add lines 40 and 41.

Required installments. Enter the smaller of line 39 or line 42

here and on line 5 (see instructions).

43

Schedule A (Form 8804) 2007 Page 3

Note. Complete lines 37 through 43 of one column before

completing the next column.

35

37

36

38

Applicable percentage.

Multiply line 34e by line 35.

25% 50% 75% 100%

Figure the tax on line 33 amounts as follows:

34a

34

34b

34c

34d

a Multiply line 33c by 35%.

b Multiply line 33f by 28%.

c Multiply line 33g by 25%.

d Multiply line 33j by 15%.

e Add lines 34a through 34d. 34e

35

32 Annualization amounts (see instructions). 32

Annualized effectively connected taxable income allocable to all

foreign partners (see instructions for the treatment of

extraordinary items):

33a

33

33b

33c

33d

a Net ordinary income (multiply line 31a by line 32).

28% rate gains allocable to non-corporate partners (multiply

line 31b by line 32).

b

c

Qualified dividend income and net long-term capital gains

(including net section 1231 gains) allocable to non-corporate

partners (multiply line 31d by line 32).

d

(a) (b) (c) (d)

Annualized Income Installment Method

30 Annualization periods (see instructions). 30

Enter effectively connected taxable income allocable to all

foreign partners for each annualization period (see instructions

for the treatment of extraordinary items):

31a

31

First

months

First

months

First

months

First 

months

31b

31c

31d

a Net ordinary income

b 28% rate gains (non-corporate partners only).

c Unrecaptured section 1250 gains (non-corporate partners only).

Qualified dividend income and net long-term capital gains

(including net section 1231 gains) (non-corporate partners only).

d

36

Reduction to line 33a for valid partner certificates under

Regulations section 1.1446-6T (see instructions).

Subtract line 33b from line 33a.

Reduction to line 33d for valid partner certificates under

Regulations section 1.1446-6T (see instructions).

f Subtract line 33e from line 33d.

Unrecaptured section 1250 gains allocable to non-corporate

partners (multiply line 31c by line 32—see instructions).

i Reduction to line 33h for valid partner certificates under

Regulations section 1.1446-6T (see instructions).

j Subtract line 33i from line 33h.

e

g

h

33e

33f

33g

33h

33i

33j

Part VI

Part V
Schedule A (Form 8804) 2007 Page 4

54

Number of days on line 45 after 6/30/2008 and before 10/1/2008

Number of days on line 45 after 9/30/2008 and before 1/1/2009

56

58

61

Number of days on line 52

366

Number of days on line 54

366

Number of days on line 56

61

365

Add lines 47, 49, 51, 53, 55, 57, and 59 

Penalty. Add columns (a) through (d) of line 60. Enter the total here and on Form 8804, line 8 

*For underpayments paid after June 30, 2008: For lines 53, 55, 57, and 59 use the penalty interest rate for each calendar quarter, which 

the IRS will determine during the first month in the preceding quarter. These rates are published quarterly in an IRS News Release and in 

a revenue ruling in the Internal Revenue Bulletin. To obtain this information on the Internet, access the IRS website at www.irs.gov. You

can also call 1-800-829-1040 to get interest rate information.

Number of days on line 45 after 12/31/2008 and before 4/1/2009 

× *%

× *%

Underpayment on line 12 × × *%

$ $ $ $

Number of days on line 45 after 3/31/2008 and before 7/1/2008

$ $ $ $

$ $ $ $

Number of days on line 50

366 × 6%

$ $ $ $

55

57

59

Underpayment on line 12 ×

Underpayment on line 12 ×

Underpayment on line 12 ×

60

Schedule A (Form 8804) 2007

Figuring the Penalty

(a) (b) (c) Enter the date of payment or the 15th day of the 4th month 

after the close of the tax year, whichever is earlier (see

instructions). Partnerships that keep their records and

books of account outside the United States and Puerto 

Rico: Use 6th month instead of 4th month.

44

Number of days from due date of installment on line 4 to

the date shown on line 44 

44

45

45

46 Number of days on line 45 after 4/15/2007 and before 1/1/2008 

Number of days on line 46 × 8%

365

47 Underpayment on line 12 $ $ $ $ ×

48

49

(d)

52

53

52

54

56

59

53

55

57

58

60

48

49

46

47

Number of days on line 58

365

Number of days on line 45 after 3/31/2009 and before 5/16/2009

Underpayment on line 12 × × *%

$

Part VII

Number of days on line 45 after 12/31/2007 and before 4/1/2008

Number of days on line 48 $ $ $ $

366

Underpayment on line 12 × × 7%

50

51

50

51 $ $ $ $

$ $ $ $
Schedule A (Form 8804) 2007 Page 5

General Instructions

Partnerships that have effectively connected taxable income

(ECTI) allocable to foreign partners use Schedule A (Form 8804) to

determine:

● Whether they are subject to the penalty for underpayment of

estimated tax and, if so,

● The amount of the underpayment penalty.

Who Must File

Generally, the partnership does not have to file this schedule

because the IRS will figure the amount of the penalty and notify

the partnership of any amount due. However, even if the

partnership does not owe a penalty, complete and attach this

schedule to the partnership’s Form 8804 if the Part II, line 1

amount on page 1 is $500 or more and either of the following

applies:

Purpose of Form

Who Must Pay the Underpayment Penalty

Generally, a partnership is subject to the penalty if it did not timely

pay at least the smaller of:

1. The tax shown on line 5e of its 2007 Form 8804 or

2. The total section 1446 tax that would be due for 2007,

without regard to partner certificates, computed using the ECTI

allocable to foreign partners for 2006, provided that (1) this

amount is at least 50% of the sum of the amounts shown on lines

4c, 4f, 4g, and 4j of its 2007 Form 8804 and (2) the tax year was

for a full 12 months. See the instructions for line 2 below for more

details.

In these instructions, “Form 8804” generally refers to

the partnership’s original Form 8804. However, an

amended Form 8804 is considered the original Form

8804 if the amended Form 8804 is filed by the due date

(including extensions) of the original Form 8804.

TIP

The penalty is figured separately for each installment due date.

Therefore, the partnership may owe a penalty for an earlier due

date even if it paid enough tax later to make up the

underpayment. This is true even if the partnership is due a refund

when its return is filed. However, the partnership may be able to

reduce or eliminate the penalty by using the annualized income

installment method or the adjusted seasonal installment method.

See the instructions for Parts IV and V for details.

Exception to the Penalty

A partnership will not have to pay a penalty if the tax shown on

line 5e of its 2007 Form 8804 is less than $500.

How To Use Schedule A

Complete this schedule as follows:

● If Part II, line 1 is $500 or more, complete the rest of page 1 to

determine the underpayment for any of the installment due dates.

● If there is an underpayment on line 12 (column (a), (b), (c), or

(d)), go to Part VII to figure the penalty.

● Complete Parts IV through VI as appropriate if the partnership

uses the adjusted seasonal installment method and/or the

annualized income installment method.

Specific Instructions

Part I. Reasons for Filing

Adjusted seasonal installment method and/or annualized

income installment method. If the partnership’s income varied

during the year because, for example, it operated its business on

a seasonal basis, it may be able to lower or eliminate the amount

of one or more required installments by using the adjusted

seasonal installment method and/or the annualized income

installment method.

● The adjusted seasonal installment (if applicable),

● The annualized income installment (if applicable), or

● The current year safe harbor (increased by any reduction

recaptured under section 6655(e)(1)(B)).

Follow the steps below to determine which parts of the form

have to be completed.

● If the partnership is using only the adjusted seasonal

installment method, check the applicable box in Part I and

complete Parts IV and VI of Schedule A (Form 8804).

● If the partnership is using only the annualized income

installment method, check the applicable box in Part I and

complete Parts V and VI of Schedule A (Form 8804).

● If the partnership is using both methods, check both of the

boxes in Part I and complete all three parts (Parts IV through VI)

of Schedule A (Form 8804).

Use Parts IV through VI on pages 2 and 3 of Schedule A (Form

8804) to figure one or more required installments. If Parts IV

through VI are used for any payment due date, those Parts must

be used for all subsequent payment due dates. To arrive at the

amount of each required installment, Part VI uses the smallest of:

Example. A ski shop, which receives most of its income during

the winter months, may benefit from using one or both of these

methods to figure its required installments. The annualized

income installment or adjusted seasonal installment may be less

than the required installment under the current year safe harbor

(increased by any reduction recaptured under section

6655(e)(1)(B)) for one or more due dates. Using one or both of

these methods may reduce or eliminate the penalty for those due

dates.

1. The adjusted seasonal installment method is used.

2. The annualized income installment method is used.

● Check one or both of the boxes in Part I that apply. If the

partnership checks a box in Part I, attach Schedule A (Form 8804)

to Form 8804. Be sure to check the box on Form 8804, line 8.

Part II. Current Year and Prior Year Safe

Harbors

Line 2 (prior year safe harbor). Enter the total section 1446 tax

that would be due for 2007, without regard to partner certificates,

computed using the ECTI allocable to foreign partners for 2006.

● The prior tax year consisted of 12 months,

The partnership may generally use the prior year safe harbor

only if it paid the required amount using that method for each of

its installment payments of section 1446 tax during the tax year.

However, see Regulations section 1.1446-3(b)(3)(ii) for an

exception. Also, see the Note below. In addition, the partnership

may only use the prior year safe harbor if all of the following apply:

● The partnership timely files (including extensions) a U.S. return

of partnership income (e.g., Form 1065) for the prior tax year, and

● Each installment payment that was made during the tax year,

when averaged with all prior installment payments, must have

been 25% of the partnership’s total section 1446 tax liability

under the prior year safe harbor,

● The amount of ECTI for the prior tax year is not less than 50%

of the ECTI shown on the current year Form 8804 that is (or will

What’s New

● Final regulations under section 6655 provide guidance with

respect to estimated tax requirements. These regulations are

applicable for tax years beginning after September 6, 2007.

● For partnerships that elect to use the annualized income

installment method, extraordinary items (as defined in Regulations

section 1.6655-2(f)(3)(ii)) generally must be taken into account

after annualizing the effectively connected taxable income for the

annualization period. Similar rules apply if the partnership uses

the adjusted seasonal installment method. See the instructions for

Parts IV through VI.
Schedule A (Form 8804) 2007 Page 6

The partnership may use the adjusted seasonal installment

method only if the partnership’s base period percentage for any

6 consecutive months of the tax year is 70% or more. The base

period percentage for any period of 6 consecutive months is the

average of the three percentages figured by dividing the ECTI for

the corresponding 6 consecutive month period in each of the 3

preceding tax years by the ECTI for each of their respective tax

years. Figure the base period percentage using the 6-month

period in which the partnership normally receives the largest part

of its ECTI.

Example. An amusement park with a 2007 calendar tax year

receives the largest part of its taxable income during a 6-month

period, May through October. To compute its base period

percentage for this 6-month period, the amusement park figures

its ECTI for each May–October period in 2004, 2005, and 2006.

It then divides the ECTI for each May–October period by the

total ECTI for that particular tax year. The resulting percentages

are: 69% (.69) for May–October 2004, 74% (.74) for

May–October 2005, and 67% (.67) for May–October 2006.

Because the average of 69%, 74%, and 67% is 70%, the base

period percentage for May through October 2007 is 70%.

Therefore, the amusement park qualifies for the adjusted

seasonal installment method.

Part V. Annualized Income Installment

Method

Line 30. Annualization periods. Enter on line 30, columns (a)

through (d), respectively, the annualization periods for the option

listed below. For example, if the partnership elected Option 1,

enter on line 30 the annualization periods 2, 4, 7, and 10, in

columns (a) through (d), respectively.

Column (a). Enter payments made by the date on line 4,

column (a).

Columns (b), (c), and (d). Enter payments made on or before

the date on line 4 for that column and after the date on line 4 of

the preceding column.

Line 12. If any of the columns in line 12 shows an

underpayment, complete Part VII to figure the penalty.

● Section 1446 tax paid or withheld by another partnership in

which the partnership filing this Schedule A (Form 8804) was a

partner during the tax year. See the instructions for Form 8804,

line 6b, in the Instructions for Forms 8804, 8805, and 8813.

● Section 1445(a) or 1445(e)(1)(B) tax withheld from or paid by the

partnership filing this Schedule A (Form 8804) during the tax year

for a disposition of a U.S. real property interest. See the

instructions for Form 8804, line 6c, in the Instructions for Forms

8804, 8805, and 8813.

Also include on line 6 any:

Line 23. Enter the reduction to the line 22c amount by reason of

valid certificates received from foreign partners under

Regulations section 1.1446-6T. See Certification of Deductions

and Losses in the Instructions for Forms 8804, 8805, and 8813

for additional information.

Part III. Figuring the Underpayment

Line 6. Enter the estimated tax payments made by the

partnership for its tax year as indicated below. Include any

overpayment from line 13 of the partnership’s 2006 Form 8804

that was credited to the partnership’s first installment period on

its 2007 Form 8804. If an installment is due on a Saturday,

Sunday, or legal holiday, payments made on the next day that is

not a Saturday, Sunday, or legal holiday are considered made on

the due date to the extent the payment is applied against that

required installment.

If the partnership is not permitted to use the prior year safe

harbor method because any of the necessary conditions

described above is not met, skip line 2 and enter on line 3 the

amount from line 1.

Part IV. Adjusted Seasonal Installment

Method

Note. Part IV does not reflect the lower preferential rates

permitted under Regulations section 1.1446-3(a)(2). This was

done because, for most taxpayers, the income reported in Part

IV will be predominantly (or exclusively) ordinary income. If the

partnership wishes to consider lower preferential rates for Part IV

(and if the requirements outlined in the third paragraph of the

line 31 instructions are met), it must attach a schedule which

appropriately expands lines 15 and 22 through 25 to show the

applicable special types of income or gain and the applicable

percentages (see, for example, lines 33 and 34 of this schedule).

Note. If the partnership qualifies for and uses the exception

under Regulations section 1.1446-3(b)(3)(ii) to switch to the

standard option annualization method during the tax year, the

partnership should include on line 2 the total of all installment

payments that were made during the tax year under both the

prior year safe harbor method and the standard option

annualization method. Attach a schedule that explains the

computation.

Parts IV Through VI

Extraordinary items. Generally, under the annualized income

installment method, extraordinary items must be taken into

account after annualizing the effectively connected taxable

income for the annualization period. Similar rules apply in

determining effectively connected taxable income under the

adjusted seasonal installment method. An extraordinary item

includes:

● Any item identified in Regulations section

1.1502-76(b)(2)(ii)(C)(1), (2), (3), (4), (7), and (8);

● A section 481(a) adjustment; and

● Net gain or loss from the disposition of 25% or more of the

fair market value of the partnership’s business assets during the

tax year.

These extraordinary items must be accounted for in the

appropriate annualization period. However, a section 481(a)

adjustment (unless the partnership makes the alternative choice

under Regulations section 1.6655-2(f)(3)(ii)(C)) is treated as an

extraordinary item occurring on the first day of the tax year in

which the item is taken into account in determining effectively

connected taxable income.

De minimis rule. Extraordinary items identified above resulting

from a particular transaction that total less than $1 million (other

than a section 481(a) adjustment) may be annualized using the

general rules of Regulations section 1.6655-2(f), or, if the

partnership chooses, may be taken into account after

annualizing the effectively connected taxable income for the

annualization period.

For more information regarding extraordinary items, see

Regulations section 1.6655-2(f)(3)(ii) and the examples in

Regulations section 1.6655-2(f)(3)(vii). Also see Regulations

section 1.6655-3(d)(3).

Line 15. If the partnership has certain extraordinary items,

special rules apply. Do not include on line 15 the de minimis

extraordinary items that the partnership chooses to include on

line 22b. See Extraordinary items above.

Line 22b. If the partnership has certain extraordinary items of $1

million or more from a transaction, or a section 481(a)

adjustment, special rules apply. Include these amounts on line

22b for the appropriate period. Also include on line 22b the de

minimis extraordinary items that the partnership chooses to

exclude from line 15. See Extraordinary items above.
Schedule A (Form 8804) 2007 Page 7

Line 44. A payment of estimated tax is applied against

underpayments of required installments in the order that installments

are required to be paid, regardless of the installment to which the

payment pertains.

Example. A partnership underpaid the April 15 installment by

$1,000. The June 15 installment requires a payment of $2,500. On

June 11, the partnership deposits $2,500 to cover the June 15

installment. However, $1,000 of this payment is applied against the

April 15 installment. The penalty for the April 15 installment is figured

to June 11 (57 days). The remaining $1,500 is applied to the June 15

installment as if it were made on June 15.

If the partnership has made more than one payment for a required

installment, attach a separate computation for each payment.

Paperwork Reduction Act Notice. We ask for the information on

this form to carry out the Internal Revenue laws of the United States.

You are required to give us the information. We need it to ensure

that you are complying with these laws and to allow us to figure and

collect the right amount of tax.

You are not required to provide the information requested on a

form that is subject to the Paperwork Reduction Act unless the form

displays a valid OMB control number. Books or records relating to a

form or its instructions must be retained as long as their contents

may become material in the administration of any Internal Revenue

law. Generally, tax returns and return information are confidential, as

required by section 6103.

The time needed to complete and file this form will vary

depending on individual circumstances. The estimated average time

is:

Form Recordkeeping

Learning

about the law

or the form

Preparing and

sending the

form to the IRS

8804, Schedule A, Parts II, 

III, and VII

27 hr., 58 min. 47 min. 1 hr., 17 min.

8804, Schedule A, Part IV

8804, Schedule A, Part V

8804, Schedule A, Part VI

20 hr., 5 min. 44 min.

21 hr., 3 min. 30 min. 52 min.

6 hr., 13 min. — — 6 min.

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.

Part VI. Required Installments

Line 38. Before completing line 38 in columns (b) through (d),

complete lines 39 through 43 in each of the preceding columns. For

example, complete lines 39 through 43 in column (a) before

completing line 38 in column (b).

Line 43. For each installment, enter the smaller of line 39 or line 42

on line 43. Also enter the result on line 5.

Part VII. Figuring the Penalty

24 min. Lines 33b, 33e, and 33i. Enter the reduction amounts by reason of

valid certificates received from foreign partners under Regulations

section 1.1446-6T. See Certification of Deductions and Losses in the

Instructions for Forms 8804, 8805, and 8813 for additional

information.

Line 33g. Multiply line 31c by line 32 to determine the unrecaptured

section 1250 gains allocable to non-corporate partners. If you have a

reduction to this amount due to the application of the netting rules

referred to in the last sentence of the line 31 instructions above, net

Complete Part VII to determine the amount of the penalty. The

penalty is figured for the period of underpayment using the

underpayment rate determined under section 6621(a)(2). The period

of underpayment runs from the installment due date to the earlier of

the date the underpayment is actually paid or the 15th day of the

fourth month after the close of the 2007 tax year (the 15th day of the

sixth month if the partnership keeps its books and records outside

the United States and Puerto Rico). For information on obtaining the

interest rate on underpayments paid after June 30, 2008, see the

footnote on page 4 of the schedule.

Line 32. Annualization amounts. Enter on line 32, columns (a)

through (d), respectively, the annualization amounts shown in the

tables below for the option used for line 30. For example, if the

partnership elected Option 1, enter on line 32 the annualization

amounts 6, 3, 1.71429, and 1.2, in columns (a) through (d),

respectively.

1st

Installment

2nd

Installment

3rd

Installment

4th

Installment

Standard option

Option 1 

Option 2 

4 4 2 1.33333

6 3 1.71429 1.2

4 2.4 1.5 1.09091

Use Option 1 or Option 2 only if the partnership elected

to do so by filing Form 8842, Election To Use Different

Annualization Periods for Corporate Estimated Tax, by the

due date of the first required installment payment. Once

made, the election is irrevocable for the particular tax year.

CAUTION

1st

Installment

2nd

Installment

3rd

Installment

4th

Installment

Standard option 3 3 6 9

Option 1 2 4 7

Option 2 3 5 8 11

10

Line 31. Enter on lines 31a through 31d the ECTI allocable to all

foreign partners for the months entered for each annualization period

in columns (a) through (d) on line 30.

If the partnership has net ordinary loss, net short-term capital loss,

or net 28% capital loss, each net loss should be netted against the

appropriate categories of income and gain to determine the amounts

of income and gain to be entered on lines 31b, 31c, and 31d,

respectively. See section 1(h) and Notice 97-59, 1997-45 I.R.B. 7, for

rules for netting gains and losses. In addition, if the partnership has

received any certificates under Regulations section 1.1446-6T, then

the netting rules of section 1(h) and Notice 97-59 must be considered

in determining the category of income such items offset.

With respect to lines 31b through 31d, enter the specified types of

income allocable to noncorporate partners if (a) such partners would

be entitled to use a preferential rate on such income or gain (see

Regulations section 1.1446-3(a)(2)) and (b) the partnership has

sufficient documentation to meet the requirements of Regulations

section 1.1446-3(a)(2)(ii).

If the partnership has certain extraordinary items, special rules

apply. Do not include on line 31a, 31b, 31c, or 31d the de minimis

extraordinary items that the partnership chooses to include on line

33a, 33d, 33g, or 33h, respectively. See Extraordinary items on 

page 6.

Lines 33a, 33d, 33g, and 33h. If the partnership has extraordinary

items that total $1 million or more from a particular transaction, or a

section 481(a) adjustment, special rules apply. Include these

amounts on line 33a, 33d, 33g, or 33h, depending on the type of

income against which the item applies, for the appropriate period.

Also include on line 33a, 33d, 33g, or 33h the de minimis

extraordinary items that the partnership chooses to exclude from line

31a, 31b, 31c, or 31d, respectively. See Extraordinary items on 

page 6.

this reduction against the unrecaptured section 1250 gains allocable

to non-corporate partners before entering this amount on line 33g.

Also attach a schedule showing (1) the amount of partnership level

unrecaptured section 1250 gains allocable to foreign partners before

the reduction caused by partner level certificates under Regulations

section 1.1446-6T; (2) the amount of the reduction for certificates

under Regulations section 1.1446-6T; and (3) the net amount

reported on line 33g.

If the partnership has included on line 33a, 33d, 33g, or 33h any of

the items referred to in the previous paragraph, write “EI” and the

dollar amount of the item next to the affected line. Attach a schedule

which shows the income for that line before the extraordinary item,

the amount of the extraordinary item, and the net amount. Also

include an explanation of the item, including the authority under

which it is being claimed.