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

Current Year and Prior Year Safe Harbors

1

2

3

4

5

6

7

8

9

10

11

12

Enter the total section 1446 tax shown on the partnership’s 2005 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 2005, without regard to partner certificates, computed

using the effectively connected taxable income (ECTI) allocable to foreign partners for 2004. 

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

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

Schedule A (Form 8804) 2005

1

3

4

5

6

7

8

9

10

11

12

Schedule A

(Form 8804)

Cat. No. 40853F

2

13

13

Part I

For Paperwork Reduction Act Notice, see page 7.

2005

Part II Figuring the Underpayment
Schedule A (Form 8804) 2005 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

Schedule A (Form 8804) 2005

20 Add lines 17 through 19. 20

21 Divide line 20 by 3. 21

22 Divide line 15 by line 21. 22

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 2002 14a

Tax year beginning in 2003 14b

Tax year beginning in 2004 14c

a

b

c

15 Enter effectively connected taxable income allocable to all foreign

partners for each period for the tax year beginning in 2005. 15

First 9

months

First 6

months

First 4

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

partners for the following periods:

16

Tax year beginning in 2002 16a

Tax year beginning in 2003 16b

Tax year beginning in 2004 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.)

Part III

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 22 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 22. If zero or less, enter -0-. 24
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 III or Part IV 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) 2005 Page 3

Schedule A (Form 8804) 2005

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%.

Part V

e Add lines 34a through 34d. 34e

35

32 Annualization amounts (see instructions). 32

Annualized effectively connected taxable income allocable to all

foreign partners:

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 effective dates before completing these lines):

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

Part IV

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).

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
Schedule A (Form 8804) 2005 Page 4

52 Number of days on line 45 after 6/30/2006 and before 10/1/2006

54 Number of days on line 45 after 9/30/2006 and before 1/1/2007

56

59

Number of days on line 52

365

Number of days on line 54

365

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 March 31, 2006: For lines 51, 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 12/31/2006 and before 4/1/2007

× *%

× *%

Underpayment on line 12 × × *% $ $ $ $

Number of days on line 45 after 3/31/2006 and before 7/1/2006

$ $ $ $

$ $ $ $

Number of days on line 50

365

× *%

$ $ $ $

53

55

57

Underpayment on line 12 ×

Underpayment on line 12 ×

Underpayment on line 12 ×

58

60

Schedule A (Form 8804) 2005

61

$ $ $ $

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

Number of days on line 45 after 4/15/2005 and before

10/1/2005

46

Number of days on line 46 × 6%

365

47 $ $ $ $

Part VI

Underpayment on line 12 ×

48

49

(d)

50

51

Underpayment on line 12 × Number of days on line 48

365

Number of days on line 45 after 9/30/2005 and before 4/1/2006

× 7% $ $ $ $

50

52

54

57

51

53

55

56

58

59

60

48

49

46

47

Number of days on line 58

365

Number of days on line 45 after 3/31/2007 and before 5/16/2007

Underpayment on line 12 × × *%

$ $ $ $

$
Schedule A (Form 8804) 2005 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

Any partnership required to file Form 8804 must file this

schedule.

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 2005 Form 8804 or

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

2005, without regard to partner certificates, computed

using the ECTI allocable to foreign partners for 2004,

provided that this amount is at least 50% of the amount

referred to in item #1 above and 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 III and IV for

details.

Exception to the Penalty

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

shown on line 5e of its 2005 Form 8804 is less than

$500.

How To Use Schedule A

Complete this schedule as follows:

● If 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 VI to figure the penalty.

● Complete Parts III through V as appropriate if the

partnership uses the adjusted seasonal installment

method and/or the annualized income installment

method.

Specific Instructions

Part I. Current Year and Prior Year Safe

Harbors

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

1446 tax that would be due for 2005, without regard to

partner certificates, computed using the ECTI allocable

to foreign partners for 2004.

● The prior tax year consisted of 12 months,

● The partnership timely files (including extensions) a

U.S. return of partnership income (e.g., Form 1065) for

the prior tax year, and

● 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 be) timely filed.

Part II. 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 11 of the partnership’s

The partnership may generally use the prior year safe

harbor only if it paid the required amount to use 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. In addition,

the partnership may only use the prior year safe harbor

if all of the following apply:

If any of the above applies, skip line 2 and enter on

line 3 the amount from line 1.

The IRS and Treasury have issued final and temporary

regulations under section 1446. See T.D. 9200, 2005-23

I.R.B. 1158. Schedule A has been modified to reflect

these regulations.

What’s New

Effective date. The final and temporary regulations are

effective for partnership tax years beginning after May

18, 2005. However, a partnership may elect to apply the

final regulations (and in some cases, the temporary

regulations) to partnership tax years beginning after

December 31, 2004, and before May 19, 2005.

Note. A partnership may elect to apply the temporary

regulations to partnership tax years beginning after

December 31, 2004, and before May 19, 2005, only if

the partnership also elects to apply the final regulations

to the same years beginning after that date.

Statements must be attached to Form 8804 to make

both elections described above (see Regulations

sections 1.1446-7 and 1.1446-6T(f) for details). For any

partnership to whom the regulations are not effective

during the current tax year, the schedule is generally

completed the same except that the partnership is not

to complete some or all of the following lines

(depending on whether it chooses to apply the final

regulations, the temporary regulations, or both): Lines

23, 31b through 31d, 33b, 33d through 33j, and 34b

through 34d.

Reduced filing requirement for certain filers. If the

partnership is claiming the current year or prior year

safe harbor and does not have an underpayment (on

line 12 of this schedule) for any installment period, the

partnership is permitted to complete only Parts I and II

of the schedule and attach page 1 of the schedule to its

Form 8804.
● 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)).

Schedule A (Form 8804) 2005 Page 6

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, complete Parts III and V of

Schedule A (Form 8804).

● If the partnership is using only the annualized income

installment method, complete Parts IV and V of

Schedule A (Form 8804).

● If the partnership is using both methods, complete all

three parts (Parts III through V) of Schedule A (Form 8804).

Part III. Adjusted Seasonal Installment

Method

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 3 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 2005 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 2002, 2003, and 2004. 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 2002,

74% (.74) for May-October 2003, and 67% (.67) for

May-October 2004. Because the average of 69%,

74%, and 67% is 70%, the base period percentage for

May through October 2005 is 70%. Therefore, the

amusement park qualifies for the adjusted seasonal

installment method.

Part IV. 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.

Note. For partnerships to whom the regulations apply

(see Effective date under What’s New on page 5),

Part III 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 III will be predominantly (or

exclusively) ordinary income. If the partnership wishes

to consider lower preferential rates for Part III (and if

the requirements outlined in the Note in 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).

Use Parts III through V on pages 2 and 3 of Schedule

A (Form 8804) to figure one or more required

installments. If Parts III through V 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 V uses the smallest of:

Parts III Through V

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.

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.

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

line 4, column (a).

Columns (b), (c), and (d). Enter payments made by

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 VI 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:

2004 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.

Line 23. Enter the reduction to the line 22 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.

Do not complete line 23 if the partnership’s

tax year began after December 31, 2004, and

before May 19, 2005, and the partnership has

not made the elections under the final and

temporary regulations described in Effective date

under What’s New on page 5.

CAUTION
Schedule A (Form 8804) 2005 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 I, 

II, and VI

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

8804, Schedule A, Part III

8804, Schedule A, Part IV

8804, Schedule A, Part V

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.

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 3 369

Option 1 247

Option 2 3 5 8 11

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.

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

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.

Do not complete lines 33b and 33d through

33j if the partnership’s tax year began after

December 31, 2004, and before May 19, 2005,

and the partnership has not made the elections

under the final and temporary regulations described in

Effective date under What’s New on page 5.

10

Note. 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).

Regulations section 1.1446-3(a)(2) does not

apply if the partnership’s tax year began after

December 31, 2004, and before May 19,

2005, and the partnership has not made the

election described in Effective date under What’s

New on page 5. Such a partnership must not complete

lines 31b through 31d.

Part V. 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 VI. Figuring the Penalty

Complete Part VI 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 2005 tax year (the 15th day of the 6th 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

March 31, 2006, see the footnote on page 4 of the

schedule.

CAUTION

CAUTION

24 min.