Installment Payments of Section 1446 Tax

for Partnerships Form 8804-W OMB No. 1545-1991

(WORKSHEET)

(Keep for the partnership’s records—Do not send to the Internal Revenue Service.) Department of the Treasury

Internal Revenue Service

1 Foreign partner’s allocable share of effectively connected taxable

income (ECTI) expected for the tax year:

2 2

3 3

4 4

5 5

6 6

Multiply line 1c by 35%

7

7

Multiply line 1f by 28%

8

8

Multiply line 1i by 25%

9

10

Add lines 2 through 5

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

b

Enter the smaller of line 6 or line 7 (however, see Caution below). If the line 7 amount does not 

apply, enter the amount from line 6 on line 8

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

Installment due dates (see

instructions) © 9

Enter 25% of line 8 in

columns (a) through (d)

unless the partnership uses

the annualized income

installment method or the

adjusted seasonal installment

method (see instructions)

11

For Paperwork Reduction Act Notice, see instructions. Cat. No. 40849X Form 8804-W (2007)

For calendar year 2007, or tax year beginning , 2007, and ending , 20 

Multiply line 1l by 15%

2007

a

c

d

Net ordinary income 1a

Reduction to line 1a for valid partner certificates under Regulations

section 1.1446-6T (see instructions) 

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) 

1b

1c

1d

Part I Determination of Installment Payments

28% rate gains (non-corporate partners only) 

Reduction to line 1d for valid partner certificates under Regulations

section 1.1446-6T (see instructions)

Subtract line 1b from line 1a 

Subtract line 1e from line 1d 

Reduction to line 1j for valid partner certificates under Regulations

section 1.1446-6T (see instructions)

Subtract line 1k from line 1j 

e

f

g

j

k

l

1e

1f

1g

1j

1k

1l

11 Enter certain amounts paid or

credited for each period (see

instructions)

12 Balance due. Subtract line

11 from line 10 12

10

Caution. If, for any installment payment, line 6 is smaller than line 7 and you enter that smaller line 6 amount, you will not

qualify for the prior year safe harbor when determining any penalty due on Schedule A (Form 8804) (see instructions).

Caution. This line 7 amount only applies if certain conditions are met (see instructions).

Note. If the aggregate line 6 amounts for all foreign partners is less than $500, the partnership is

not required to make estimated tax payments.

Reduction to line 1g for valid partner certificates under Regulations

section 1.1446-6T (see instructions) 

h

1h

i Subtract line 1h from line 1g 1i
Form 8804-W (WORKSHEET) 2007 Page 2

Form 8804-W (2007)

15

16

17

17

First 4

months

First 6

months

First 9

months Entire year

Enter the foreign partner’s allocable share of ECTI for the

following periods:

18

a Tax year beginning in 2004 15a

b Tax year beginning in 2005 15b

c Tax year beginning in 2006 15c

Divide the amount in each column on line 13a by the amount 

in column (d) on line 15a. 16

Divide the amount in each column on line 13b by the amount 

in column (d) on line 15b.

Divide the amount in each column on line 13c by the amount 

in column (d) on line 15c. 18

24

25a

Multiply line 23 by 35%.

Divide the amount in columns (a) through (c) on line 15a by

the amount in column (d) on line 15a.

b

c

19 Add lines 16 through 18. 19

20

21

24

20 Divide line 19 by 3.

25a

25b

25c

27

21

28

Divide line 14 by line 20.

Divide the amount in columns (a) through (c) on line 15b by 

the amount in column (d) on line 15b.

Divide the amount in columns (a) through (c) on line 15c by

the amount in column (d) on line 15c.

26 Add lines 25a through 25c.

27 Divide line 26 by 3.

26

28 Multiply the amount in columns (a) through (c) of line 24 by

the amount in the corresponding column of line 27. In column 

(d), enter the amount from line 24, column (d).

22 Reduction to line 21 amount for valid certifications received from 

the foreign partner under Regulations section 1.1446-6T. 22

23 Subtract line 22 from line 21. If zero or less, enter -0-. 23

13

14

14

Adjusted Seasonal Installment Method (see instructions)

(Use this method only if the base period percentage for any 6 consecutive months is at least 70%.)

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

First 11

months

First 8

months

First 5

months

First 3

months

Enter the foreign partner’s allocable share of ECTI for the

following periods:

a Tax year beginning in 2004 13a

b Tax year beginning in 2005 13b

c Tax year beginning in 2006 13c

Enter the foreign partner’s allocable share of ECTI for each

period for the tax year beginning in 2007.

Part II

Check this box if the partnership has elected to attach a

schedule that expands lines 14 and 21 through 24 to reflect 

Reg. 1.1446-3(a)(2) (see instructions) ©
Form 8804-W (WORKSHEET) 2007 Page 3

36

37

39

38

4th

installment

3rd

installment

2nd

installment

1st

installment

39

If only Part II or Part III is completed, enter the amount in

each column from line 28 or line 35. If both parts are

completed, enter the smaller of the amounts in each column 

from line 28 or line 35. 36

Add the amounts in all preceding columns of line 42 (see

instructions). 37

Adjusted seasonal or annualized income installments.

Subtract line 37 from line 36. If zero or less, enter -0-. 38

40

Enter 25% of line 6 in each column.

Subtract line 42 of the preceding column from line 41 of the 

preceding column.

41 Add lines 39 and 40.

40

Required installments. Enter the smaller of line 38 or line

41 here and on line 10.

41

42

Form 8804-W (2007)

Part IV Required Installments Under Part II and/or Part III

42

34 34

35 35

Applicable percentage. 25% 50% 75% 100%

Multiply line 33e by line 34.

33 Figure the tax on line 32 amounts as follows:

a

b

c

d

Multiply line 32c by 35%.

Multiply line 32f by 28%.

Multiply line 32i by 25%.

Multiply line 32l by 15%.

33a

33b

33c

33d

Add lines 33a through 33d. 33e

k Reduction to line 32j for valid partner certificates under

Regulations section 1.1446-6T (see instructions). 32k

l Subtract line 32k from line 32j. 32l

j Qualified dividend income and net long-term capital gains

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

partners (multiply line 30d by line 31). 32j

e

Note. Complete lines 36 through 42 of one column before

completing the next column.

32 Foreign partner’s annualized allocable share of ECTI:

a

d

g

Net ordinary income (multiply line 30a by line 31).

28% rate gains allocable to non-corporate partners

(multiply line 30b by line 31).

Unrecaptured section 1250 gains allocable to

non-corporate partners (multiply line 30c by line 31).

32a

32d

32g

b Reduction to line 32a for valid partner certificates under

Regulations section 1.1446-6T (see instructions). 32b

c Subtract line 32b from line 32a. 32c

Annualized Income Installment Method (see instructions)

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

29 Annualization periods (see instructions). 29

First

months

First

months

First

months

First

months

30 Enter the foreign partner’s allocable share of ECTI for each

annualization period (see instructions):

a

b

c

d

Net ordinary income.

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

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

Qualified dividends and net long-term capital gains (including

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

31 Annualization amounts (see instructions).

30a

30b

30c

30d

31

Part III

f Subtract line 32e from line 32d. 32f

e Reduction to line 32d for valid partner certificates under

Regulations section 1.1446-6T (see instructions). 32e

h Reduction to line 32g for valid partner certificates under

Regulations section 1.1446-6T (see instructions) 32h

i Subtract line 32h from line 32g. 32i
Form 8804-W (WORKSHEET) 2007 Page 4

Refiguring Estimated Section 1446 Tax

General Instructions

Section references are to the Internal Revenue Code

unless otherwise noted.

An immediate catch-up payment should be made to

reduce the amount of any penalty resulting from the

underpayment of any earlier installments, whether

caused by a change in estimate, failure to make a

payment, or a mistake.

Specific Instructions

Who Must Make Estimated Section 1446

Tax Payments

When To Make Estimated Section 1446

Tax Payments

How To Make Estimated Section 1446

Tax Payments

Underpayment of Estimated Section

1446 Tax

Partnerships generally must make installment payments

of estimated section 1446 tax if they expect the

aggregate tax on the effectively connected taxable

income (ECTI) that is allocable to all foreign partners to

be $500 or more.

The installments are due by the 15th day of the 4th, 6th,

9th, and 12th months of the partnership’s tax year. If

any date falls on a Saturday, Sunday, or legal holiday,

the installment is due on the next regular business day.

A partnership that does not make estimated section

1446 tax payments when due may be subject to an

underpayment penalty for the period of underpayment.

See Schedule A (Form 8804) for details.

A partnership that is required to make an installment

payment of section 1446 tax must file Form 8813,

Partnership Withholding Tax Payment Voucher (Section

1446). Furthermore, the partnership is generally required

to notify each foreign partner of the section 1446 tax

paid on the partner’s behalf within 10 days of the

installment payment due date. See Regulations section

1.1446-3(d) and the Instructions for Forms 8804, 8805,

and 8813 for more information.

If, after the partnership figures and pays estimated

section 1446 tax, it finds that its section 1446 tax

liability for the year will be more or less than originally

estimated, it may have to refigure its required

installments. If earlier installments were underpaid, the

partnership may owe a penalty for underpayment of

estimated tax.

Part I—Determination of Installment

Payments

Line 7—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.

With respect to the partnership’s first installment

payment, if the 2006 Form 8804 has not yet been filed,

an estimate is acceptable. However, if the partnership

later determines that this estimate is incorrect, see

Refiguring Estimated Section 1446 Tax above.

Complete line 7 only if all of the following apply:

● 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 year, and

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

than 50% of the ECTI expected for the current tax year.

Furthermore, the Form 8804 on which the current year

ECTI will be reported must be timely filed.

If any of the above does not apply, skip line 7 and

enter the amount from line 6 on line 8.

If the partnership qualifies to use the prior year safe

harbor and chooses that method, it must use that

method to pay each of its installments during the tax

year. Furthermore, for each installment payment, the

average of that installment and prior installments during

the tax year must be at least 25% of the amount that

satisfies the partnership’s section 1446 tax liability

under the prior year safe harbor. If the partnership does

not satisfy both of these requirements, it will not qualify

for the prior year safe harbor when determining any

penalty due on Schedule A (Form 8804).

Lines 1b, 1e, 1h, and 1k. 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. Also see the last sentence of the

instructions for lines 1a, 1d, 1g, and 1j above for

additional information.

1j, enter the specified types of ECTI if such partner

would be entitled to use a preferential rate on such

income or gain (see Regulations section 1.1446-3(a)(2)).

Complete Form 8804-W for each installment payment of

section 1446 tax based on the information available at

the time of the installment payment. If the partnership begins using the prior year safe

harbor method and it determines later in the tax year

(based upon the standard option annualization method

described later in these instructions) that it will not meet

the 50% of ECTI requirement described in the last

bulleted item above, it may make all subsequent

installment payments using the standard option

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 1d, 1g, and 1j,

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.

Lines 1 through 6—Current Year Safe Harbor

Lines 1a, 1d, 1g, and 1j. To determine the foreign

partner’s allocable share of ECTI, see Effectively

Connected Taxable Income in the Instructions for Forms

8804, 8805, and 8813. With respect to lines 1d, 1g, and
Form 8804-W (WORKSHEET) 2007 Page 5

Parts II Through IV

If only the adjusted seasonal installment method (Part II)

is used, complete Parts II and IV. If only the annualized

income installment method (Part III) is used, complete

Parts III and IV. If both methods are used, complete all

three parts. Enter in each column on line 10, the

amounts from the corresponding column of

line 42.

Do not figure any required installment until

after the end of the month preceding the due

date for that installment.

CAUTION

Complete this part only if the partnership’s base

period percentage for any 6 consecutive months of the

tax year equals or exceeds 70%. Figure the base period

percentage using the 6-month period in which the

partnership normally receives the largest part of its

ECTI. 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.

To use one or both of these methods, complete Part II

and/or Part III of the form. If those Parts are used for

any payment date, those Parts must be used for all

subsequent payment due dates. To arrive at the amount

of each required installment, Part IV automatically

selects the smallest of (a) the annualized income

installment (if applicable), (b) the adjusted seasonal

Line 11

Include on line 11 any 2006 overpayment that the

partnership chose to credit against its 2007 tax. The

overpayment is credited against unpaid required

installments in the order in which the installments are

required to be paid.

Also include on line 11 any:

● Section 1446 tax paid or withheld by another

partnership in which the partnership filing this Form

8804-W 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) tax withheld from or paid

by the partnership filing this Form 8804-W 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.

The partnership generally enters these amounts in the

column that corresponds to the installment period for

which these amounts were paid or withheld. However, if

the partnership learns about the payments or

withholding in a subsequent installment period, the

partnership may claim them in that period.

Annualized income installment method and/or

adjusted seasonal installment method. If the

partnership’s ECTI is expected to vary during the year

because, for example, it operates its business on a

seasonal basis, it may be able to lower the amount of

one or more required installments by using the

annualized income installment method and/or the

adjusted seasonal installment method. For example, a

ski shop, which receives most of its income during the

winter months, may be able to benefit from using one or

both of these methods in figuring one or more of its

required installments.

Part II—Adjusted Seasonal Installment Method

Note. Part II 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 II will be predominantly (or exclusively)

ordinary income. If the partnership wishes to consider

lower preferential rates for Part II (and if the

requirements outlined in the Note in the line 30

instructions are met), it must attach a schedule which

appropriately expands lines 14 and 21 through 24 to

show the applicable special types of income or gain and

the applicable percentages (see, for example, lines 32

and 33 of this schedule).

Line 9—Installment Due Dates

Fiscal-year taxpayers: Enter the 15th day of the 4th,

6th, 9th, and 12th months of the partnership’s tax year

in columns (a) through (d). If the regular due date falls on

a Saturday, Sunday, or legal holiday, enter the next

business day.

Line 10

Calendar-year taxpayers: Enter 4-16-2007, 6-15-2007,

9-17-2007, and 12-17-2007, respectively, in columns (a)

through (d).

Enter 25% of line 8 in columns (a) through (d) unless the

partnership uses the annualized income installment

method or the adjusted seasonal installment method.

Line 8

Enter the smaller of line 6 or line 7. However, if, for any

installment payment, line 6 is smaller than line 7 and you

enter that smaller line 6 amount on line 8, you will not

qualify for the prior year safe harbor when determining

any penalty due on Schedule A (Form 8804) (see the line

7 instructions on page 4). Therefore, in that case, for

any subsequent installment payment during the tax

year, do not use the line 7 amount.

annualization method and it will not be subject to the

penalty determined on Schedule A (Form 8804). This

change in method must be disclosed in a statement

attached to the Form 8804 the partnership files for the

current tax year and the statement must include enough

information to allow the IRS to determine whether the

change was appropriate.

If the partnership begins using the prior year safe

harbor method and switches to the current year safe

harbor (because the partnership does not qualify for the

relief described in the previous paragraph (i.e., using the

standard option annualization method) or the

partnership chooses not to continue using it), in order to

avoid an underpayment penalty with respect to the

current installment payment, the partnership must pay

the sum of (a) the current installment payment based on

the current year safe harbor, plus (b) the sum of the

amount by which the current year safe harbor exceeds

the prior year safe harbor amount paid in for each prior

installment period during which it qualified for the prior

year safe harbor.

installment (if applicable), or (c) the current year safe

harbor (increased by any recapture of a reduction in a

required installment under section 6655(e)(1)(B)).
Form 8804-W (WORKSHEET) 2007 Page 6

Paperwork Reduction Act Notice. Your use of this

form is optional. It is provided to aid the partnership in

determining its tax liability.

The time needed to complete this form will vary

depending on individual circumstances. The estimated

average time is:

Learning about the

law or the form

Preparing

Form Recordkeeping the form

8804-W, Part I 8 hr., 7 min. 47 min. 57 min.

8804-W, Part II 21 hr., 16 min. 6 min. 27 min.

8804-W, Part III 21 hr., 3 min. 27 min.

8804-W, Part IV 5 hr., 58 min. 12 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.

You can write to the Internal Revenue Service, Tax

Products Coordinating Committee,

SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW,

IR-6406, Washington, DC 20224. Do not send the tax

form to this office. Instead, keep the form for your

records.

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.

6 min.

Line 31—Annualization Amounts

Enter the annualization amounts for the option used on

line 29. For example, if the partnership elects Option 1,

enter on line 31 the annualization amounts 6, 3,

1.71429, and 1.2, in columns (a) through (d),

respectively.

4 2.4 1.5 1.09091

6 3 1.71429 1.2

4 4 2 1.33333

Option 1

Option 2

Standard option

1st

Installment

2nd

Installment

3rd

Installment

4th

Installment

Part IV—Required Installments Under Part II and/or

Part III

Before completing line 37 in columns (b) through (d),

complete lines 38 through 42 in each of the preceding

columns. For example, complete lines 38 through 42 in

column (a) before completing line 37 in column (b).

Line 37

For each installment, enter the smaller of line 38 or line

41 on line 42. Also enter the result on line 10.

Line 42. Required Installments

Line 32b, 32e, 32h, and 32k

Line 30—Foreign Partner’s Allocable Share of ECTI

Option 1

Option 2

Standard option

3 5 8 11

2 4 7 10

3 3 6 9

1st

Installment

2nd

Installment

3rd

Installment

4th

Installment

Enter on lines 30a through 30d the foreign partner’s

allocable share of ECTI for the months entered for

each annualization period in columns (a) through (d) on

line 29. To determine the foreign partner’s allocable

share of ECTI, see Effectively Connected Taxable

Income in the instructions for Forms 8804, 8805, and

8813.

Use Option 1 or Option 2 only if the

partnership elected to use one of these

options by filing Form 8842, Election To Use

Different Annualization Periods for Corporate

Estimated Tax, on or before the due date of the first

required installment payment. Once made, the election

is irrevocable for the particular tax year.

CAUTION

6 min.

Part III—Annualized Income Installment Method

Line 29—Annualization Periods

Enter in the space on line 29, columns (a) through (d),

respectively, the annualization periods that the

partnership is using, based on the options listed below.

For example, if the partnership elects Option 1, enter

on line 29 the annualization periods 2, 4, 7, and 10, in

columns (a) through (d), respectively.

Example. An amusement park with a calendar year

as its tax year receives the largest part of its ECTI

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.

Line 22

Enter the reduction to the line 21 amount by reason of

valid certificates received from the foreign partner

under Regulations section 1.1446-6T. See Certification

of Deductions and Losses in the instructions for Forms

8804, 8805, and 8813 for additional information.

Note. With respect to lines 30b through 30d, enter the

specified types of ECTI if (a) such partner 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).

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. Also

see the last sentence of the instructions for lines 1a,

1d, 1g, and 1j on page 4 for additional information.