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 2006 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 2006, without regard to partner certificates, computed 

using the effectively connected taxable income (ECTI) allocable to foreign partners for 2005. 

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) 2006

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

2006

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.

If the partnership had assets of $1 billion or

more (determined as of the end of the preceding 

tax year), see the instructions for line 5 on page 

CAUTION 6 before completing that line.

The partnership had assets of $1 billion or more (determined as of the end of the preceding tax year)—see instructions.

13
Schedule A (Form 8804) 2006 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) 2006

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 2003 14a

Tax year beginning in 2004 14b

Tax year beginning in 2005 14c

a

b

c

15 Enter effectively connected taxable income allocable to all foreign 

partners for each period for the tax year beginning in 2006. 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 2003 16a

Tax year beginning in 2004 16b

Tax year beginning in 2005 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 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

Part IV
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) 2006 Page 3

Schedule A (Form 8804) 2006

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:

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:

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) 2006 Page 4

52 Number of days on line 45 after 6/30/2007 and before 10/1/2007

54 Number of days on line 45 after 9/30/2007 and before 1/1/2008

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, 2007: 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 12/31/2007 and before 4/1/2008 

× *%

× *%

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

Number of days on line 45 after 3/31/2007 and before 7/1/2007

$ $ $ $

$ $ $ $

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) 2006

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

46 Number of days on line 45 after 4/15/2006 and before 7/1/2006 

Number of days on line 46 × 7%

365

47 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 6/30/2006 and before 4/1/2007 

× 8% $ $ $ $

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 3/31/2008 and before 5/16/2008

Underpayment on line 12 × × *%

$ $ $ $

$

Part VII
Schedule A (Form 8804) 2006 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 one or more 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 2006 Form 8804 or

2. The total section 1446 tax that would be due for 2006,

without regard to partner certificates, computed using the

ECTI allocable to foreign partners for 2005, 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 2006 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 2006 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

What’s New

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.

● The filing requirements for this schedule have changed. See

Who Must File below for the new requirements. Part I of the

schedule is new. It was added in conjunction with the new

filing requirements. See Part I, Reasons for Filing below.

● In the case of a partnership with assets of $1 billion or more,

the amount of any required installment that was otherwise due

in July, August, or September of 2006 is 105% of such

amount. The amount of the next required installment after the

installment referred to in the previous sentence is reduced to

reflect the amount of the increase by reason of the last

sentence. See the instructions for Part III, line 5 for additional

information.

1. The adjusted seasonal installment method is used.

2. The annualized income installment method is used.

● Check one or more 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 2006, without regard to partner

certificates, computed using the ECTI allocable to foreign

partners for 2005.

3. The partnership had assets of $1 billion or more

(determined as of the end of the preceding tax year).

Partnerships with assets of $1 billion or more. See the

instructions for line 5 on page 6.
Schedule A (Form 8804) 2006 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 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 2006 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 2003,

2004, and 2005. 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 2003, 74% (.74) for May-October 2004, and

67% (.67) for May-October 2005. Because the average of

69%, 74%, and 67% is 70%, the base period percentage for

May through October 2006 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 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 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 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.

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 2005 Form

8804 that was credited to the partnership’s 2006 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 any of the above applies, skip line 2 and enter on line 3

the amount from line 1.

Part IV. Adjusted Seasonal Installment

Method

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.

● 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

● 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.

Line 5. If the partnership had assets of $1 billion or more

(determined as of the end of the preceding tax year), with

respect to any required installment that was due in July,

August, or September of 2006, enter 105% of the amount

that would have otherwise been due for that required

installment.

Note. The amount of the next required installment after the

installment referred to in the previous paragraph is reduced

to reflect the amount of the increase by reason of such

paragraph.

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 second

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).

● 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 section 1446 tax liability

under the prior year safe harbor.

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.
Schedule A (Form 8804) 2006 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.

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.

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.

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.

Lines 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 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.

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 2006 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, 2007,

see the footnote on page 4 of the schedule.

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).