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Form 1040nr Ez

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Form 1040nr Ez

Form 1040nr ez Internal Revenue Bulletin:  2009-36  September 8, 2009  Rev. Form 1040nr ez Proc. Form 1040nr ez 2009-37 Table of Contents SECTION 1. Form 1040nr ez PURPOSE SECTION 2. Form 1040nr ez BACKGROUND SECTION 3. Form 1040nr ez SCOPE SECTION 4. Form 1040nr ez ELECTION PROCEDURES SECTION 5. Form 1040nr ez REQUIRED INFORMATION STATEMENT SECTION 6. Form 1040nr ez EFFECTIVE DATE SECTION 7. Form 1040nr ez TRANSITION RULE SECTION 8. Form 1040nr ez PAPERWORK REDUCTION ACT DRAFTING INFORMATION SECTION 1. Form 1040nr ez PURPOSE . Form 1040nr ez 01 This revenue procedure provides the exclusive procedures for taxpayers to make an election to defer recognizing discharge of indebtedness income (“COD income”) under § 108(i) of the Internal Revenue Code. Form 1040nr ez . Form 1040nr ez 02 This revenue procedure also requires taxpayers making the § 108(i) election to provide additional information on returns beginning with the taxable year following the taxable year for which the taxpayer makes the election. Form 1040nr ez This revenue procedure describes the time and manner of providing this additional information. Form 1040nr ez . Form 1040nr ez 03 The Internal Revenue Service and Treasury Department intend to issue additional guidance under § 108(i) that may include regulations addressing matters in this revenue procedure. Form 1040nr ez Taxpayers should be aware that these regulations may be retroactive. Form 1040nr ez See § 7805(b)(2). Form 1040nr ez This revenue procedure may be modified to provide procedures consistent with additional guidance. Form 1040nr ez SECTION 2. Form 1040nr ez BACKGROUND . Form 1040nr ez 01 Section 108(i), Generally. Form 1040nr ez Section 108(i) was added to the Code by § 1231 of the American Recovery and Reinvestment Tax Act of 2009, Pub. Form 1040nr ez L. Form 1040nr ez No. Form 1040nr ez 111-5, 123 Stat. Form 1040nr ez 338. Form 1040nr ez In general, § 108(i) provides that, at the election of a taxpayer, COD income realized in connection with a reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument is includible in gross income ratably over a 5-taxable-year inclusion period, beginning with the taxpayer’s fourth or fifth taxable year following the taxable year of the reacquisition. Form 1040nr ez Generally, if a taxpayer makes a § 108(i) election and reacquires (or is treated as reacquiring) the applicable debt instrument generating the COD income for a new debt instrument with original issue discount (“OID”), then interest deductions for this OID also are deferred, as provided in § 108(i)(2). Form 1040nr ez The OID deferral rule, however, does not apply if the amount of OID is less than a de minimis amount, as determined under § 1273(a)(3) and § 1. Form 1040nr ez 1273-1(d) of the Income Tax Regulations. Form 1040nr ez The OID deferral rule in § 108(i)(2) applies at the entity level for a pass-through entity. Form 1040nr ez For example, a partnership (and therefore its partners) may not deduct currently the OID described in § 108(i)(2)(A)(i). Form 1040nr ez A taxpayer must take into account any item of income or deduction deferred under § 108(i), and not previously taken into account, in the taxable year in which certain events occur (such as the liquidation of the taxpayer and upon other events specified in administrative guidance). Form 1040nr ez See § 108(i)(5)(D). Form 1040nr ez The rule regarding acceleration of deferred COD income and OID deductions also applies in the case of certain dispositions by persons holding ownership interests in pass-through entities. Form 1040nr ez Section 108(i)(5)(D)(ii). Form 1040nr ez For purposes of § 108(i), regulated investment companies (as defined in § 851(a)) and real estate investment trusts (as defined in § 856(a)) are not pass-through entities. Form 1040nr ez . Form 1040nr ez 02 Applicable Debt Instrument. Form 1040nr ez Section 108(i)(3)(A) defines the term “applicable debt instrument” to mean any debt instrument issued by a C corporation or by any other person in connection with the conduct of a trade or business by that person. Form 1040nr ez The term “debt instrument” means any bond, debenture, note, certificate, or any other instrument or contractual arrangement constituting indebtedness within the meaning of § 1275(a)(1). Form 1040nr ez Section 108(i)(3)(B). Form 1040nr ez For purposes of § 108(i), in the case of an intercompany obligation (as defined in § 1. Form 1040nr ez 1502-13(g)(2)(ii)), an applicable debt instrument includes only an instrument for which COD income is realized upon the instrument’s deemed satisfaction under § 1. Form 1040nr ez 1502-13(g)(5). Form 1040nr ez . Form 1040nr ez 03 Reacquisition. Form 1040nr ez Section 108(i)(4)(A) defines the term “reacquisition” to mean, with respect to any applicable debt instrument, any acquisition of the debt instrument by the debtor that issued (or is otherwise the obligor under) the debt instrument, or a person related to the debtor under § 108(e)(4). Form 1040nr ez The term “acquisition” includes an acquisition of the debt instrument for cash or other property, the exchange of the debt instrument for another debt instrument (including an exchange resulting from a modification of the debt instrument), the exchange of the debt instrument for corporate stock or a partnership interest, the contribution of the debt instrument to capital, and the complete forgiveness of the indebtedness by the holder of the debt instrument. Form 1040nr ez See § 108(i)(4)(B). Form 1040nr ez The term “acquisition” also includes an indirect acquisition within the meaning of § 1. Form 1040nr ez 108-2(c) if a direct acquisition of the debt instrument would qualify for an election under § 108(i). Form 1040nr ez For example, if a corporation acquires debt of a partnership that the partnership issued in connection with its trade or business, and the partnership and corporation become related within six months of the corporation’s acquisition of the debt, the indirect acquisition is an acquisition for which an election under § 108(i) may be made. Form 1040nr ez . Form 1040nr ez 04 General Requirements for the Section 108(i) Election. Form 1040nr ez Section 108(i)(5)(B) provides, in general, that a taxpayer makes the § 108(i) election by including a statement that clearly identifies the applicable debt instrument with the return of tax imposed for the taxable year in which the reacquisition of the instrument occurs. Form 1040nr ez (For purposes of this revenue procedure, a return of tax or income tax return includes an information return, and a taxpayer includes a person that files an information return. Form 1040nr ez ) The statement must include the amount of income to which § 108(i)(1) applies and other information the Service may prescribe. Form 1040nr ez Once made, a § 108(i) election is irrevocable and, except as provided in section 7 of this revenue procedure, may not be modified. Form 1040nr ez . Form 1040nr ez 05 Section 108(i) Elections Made by Pass-through Entities. Form 1040nr ez In the case of COD income realized by a pass-through entity from the reacquisition of an applicable debt instrument, the pass-through entity makes the § 108(i) election. Form 1040nr ez Section 108(i)(5)(B)(iii). Form 1040nr ez . Form 1040nr ez 06 Additional Information on Subsequent Years’ Returns. Form 1040nr ez Section 108(i)(7) authorizes the Service to issue guidance necessary or appropriate for applying § 108(i), including requiring reporting the election and other information on returns of tax for subsequent taxable years. Form 1040nr ez . Form 1040nr ez 07 Exclusivity. Form 1040nr ez Section 108(i)(5)(C) provides that if a taxpayer elects to apply § 108(i) to an applicable debt instrument, § 108(a)(1)(A), (B), (C), and (D) do not apply to COD income deferred under § 108(i). Form 1040nr ez . Form 1040nr ez 08 Allocation of Deferred COD Income on Partnership Indebtedness. Form 1040nr ez Section 4. Form 1040nr ez 04(3) of this revenue procedure describes how a partnership may elect under § 108(i) to defer a portion of the COD income realized from the reacquisition of an applicable debt instrument. Form 1040nr ez If a partnership elects to defer all or any portion of COD income realized from the reacquisition of an applicable debt instrument, all of the COD income with respect to that debt instrument, without regard to § 108(i), is allocated to the partners in the partnership immediately before the reacquisition in the manner in which the income would be included in the distributive shares of these partners under § 704 and the regulations thereunder, including § 1. Form 1040nr ez 704-1(b)(2)(iii). Form 1040nr ez Each partner’s share of this COD income is the partner’s COD income amount (“COD income amount”). Form 1040nr ez The partner’s COD income amount that is deferred under § 108(i) is the partner’s deferred amount (“deferred amount”). Form 1040nr ez The partner’s COD income amount that is not deferred and is included in the partner’s distributive share of partnership income for the taxable year of the partnership in which the reacquisition occurs is the partner’s included amount (“included amount”). Form 1040nr ez . Form 1040nr ez 09 Partner’s Deferred § 752 Amount. Form 1040nr ez A decrease in a partner’s share of a partnership liability resulting from the reacquisition of an applicable debt instrument that is not treated as a current distribution of money to the partner under § 752 by reason of § 108(i)(6) is the partner’s deferred § 752 amount (“deferred § 752 amount”). Form 1040nr ez A partner’s deferred § 752 amount may not exceed the lesser of (i) the partner’s deferred amount or (ii) gain that the partner would recognize in the year of reacquisition under § 731 as a result of the reacquisition absent § 108(i)(6). Form 1040nr ez To determine the amount of gain the partner would recognize under clause (ii) of the preceding sentence, the amount of any deemed distribution of money under § 752(b) resulting from the decrease in the partner’s share of a reacquired applicable debt instrument that is treated as an advance or draw of money under § 1. Form 1040nr ez 731-1(a)(1)(ii) is determined as if no COD income resulting from the reacquisition of the applicable debt instrument is deferred under § 108(i). Form 1040nr ez See Rev. Form 1040nr ez Rul. Form 1040nr ez 92-97, 1992-2 C. Form 1040nr ez B. Form 1040nr ez 124, and Rev. Form 1040nr ez Rul. Form 1040nr ez 94-4, 1994-1 C. Form 1040nr ez B. Form 1040nr ez 195. Form 1040nr ez A partner’s deferred § 752 amount is treated as a distribution of money to the partner under § 752 at the same time, and to the extent remaining in the same amount, as the partner recognizes the COD income deferred under § 108(i). Form 1040nr ez . Form 1040nr ez 10 Allocation of Deferred COD Income on S Corporation Indebtedness. Form 1040nr ez For purposes of § 108(i), an S corporation’s COD income deferred under § 108(i) is shared pro rata only among those shareholders that are shareholders of the S corporation immediately before the reacquisition transaction. Form 1040nr ez . Form 1040nr ez 11 Deferred COD Income, Earnings and Profits, and Alternative Minimum Taxable Income. Form 1040nr ez (1) In general. Form 1040nr ez The Service and Treasury Department intend to issue regulations regarding the computation of a corporation’s earnings and profits with respect to COD income and OID deductions that are deferred under § 108(i). Form 1040nr ez These regulations generally will provide that deferred COD income increases earnings and profits in the taxable year that it is realized and not in the taxable year or years that the deferred COD income is includible in gross income. Form 1040nr ez OID deductions deferred under § 108(i) generally will decrease earnings and profits in the taxable year or years in which the deduction would be allowed without regard to § 108(i). Form 1040nr ez COD income and OID deductions that are deferred increase or decrease adjusted current earnings under § 56(g)(4) in the taxable year or years that the income or deduction is includible or deductible in determining taxable income. Form 1040nr ez See § 1. Form 1040nr ez 56(g)-1(c)(1). Form 1040nr ez (2) Exceptions for certain special status corporations. Form 1040nr ez The Service and Treasury Department intend to issue regulations providing that in the case of regulated investment companies and real estate investment trusts, COD income deferred under § 108(i) generally increases earnings and profits in the taxable year or years in which the deferred COD income is includible in gross income and not in the year that the deferred COD income is realized. Form 1040nr ez OID deductions deferred under § 108(i) generally decrease earnings and profits in the taxable year or years that the deferred OID deductions are deductible. Form 1040nr ez . Form 1040nr ez 12 Extension of Time to Make Election. Form 1040nr ez Under § 301. Form 1040nr ez 9100-1 of the Procedure and Administration Regulations, the Service may grant an extension of time to make a regulatory election. Form 1040nr ez An election is a regulatory election if the due date is prescribed by regulation or other published guidance of general applicability. Form 1040nr ez Section 301. Form 1040nr ez 9100-2(a) provides an automatic 12-month extension from the due date for making certain regulatory elections. Form 1040nr ez SECTION 3. Form 1040nr ez SCOPE This revenue procedure applies to taxpayers that realize COD income from a reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in § 108(i). Form 1040nr ez SECTION 4. Form 1040nr ez ELECTION PROCEDURES . Form 1040nr ez 01 In General. Form 1040nr ez (1) A taxpayer within the scope of this revenue procedure makes the § 108(i) election by— (a) Attaching a statement meeting the requirements of section 4. Form 1040nr ez 05 of this revenue procedure to the taxpayer’s timely filed (including extensions) original federal income tax return for the taxable year in which the reacquisition of the applicable debt instrument occurs, and (b) If applicable, satisfying the additional requirements of section 4. Form 1040nr ez 07, 4. Form 1040nr ez 08, 4. Form 1040nr ez 09, or 4. Form 1040nr ez 10 of this revenue procedure. Form 1040nr ez (2) The Service grants an automatic extension of 12 months from the due date prescribed in section 4. Form 1040nr ez 01(1)(a) of this revenue procedure for making the § 108(i) election. Form 1040nr ez The rules that apply to an automatic extension under § 301. Form 1040nr ez 9100-2(a) apply to this automatic extension. Form 1040nr ez . Form 1040nr ez 02 Section 108(i) Elections Made by Members of Consolidated Groups. Form 1040nr ez The common parent of a consolidated group makes the § 108(i) election on behalf of all members of the group. Form 1040nr ez See § 1. Form 1040nr ez 1502-77(a). Form 1040nr ez . Form 1040nr ez 03 Aggregation Rule. Form 1040nr ez A taxpayer within the scope of this revenue procedure may treat two or more applicable debt instruments that are part of the same issue and that are reacquired during the same taxable year as one applicable debt instrument for purposes of this revenue procedure. Form 1040nr ez A pass-through entity may not treat two or more applicable debt instruments as one applicable debt instrument under this section 4. Form 1040nr ez 03 if the owners and their ownership interests in the pass-through entity immediately prior to the reacquisition of each applicable debt instrument are not identical. Form 1040nr ez . Form 1040nr ez 04 Partial Elections. Form 1040nr ez (1) A taxpayer within the scope of this revenue procedure may make an election for any portion of COD income realized from the reacquisition of any applicable debt instrument. Form 1040nr ez Thus, for example, if a taxpayer realizes $100 of COD income from the reacquisition of an applicable debt instrument, the taxpayer may elect under § 108(i)(1) to defer only $40 of the $100 of COD income. Form 1040nr ez The taxpayer may exclude from income the portion of COD income that the taxpayer does not elect to defer under § 108(i) ($60 in this example) under § 108(a)(1)(A), (B), (C), or (D), if applicable. Form 1040nr ez (2) A taxpayer is not required to make an election for the same portion of COD income arising from each applicable debt instrument that it reacquires, but may make an election for different portions of COD income arising from different applicable debt instruments (whether or not part of the same issue). Form 1040nr ez Thus, for example, if a taxpayer realizes $100 of COD income from the reacquisition of an applicable debt instrument (Instrument A) and $100 of COD income from the reacquisition of a different applicable debt instrument (Instrument B), the taxpayer may elect to defer all or a portion of the COD income associated with Instrument A and none or a different portion of the COD income associated with Instrument B. Form 1040nr ez (3) A partnership that elects to defer less than all of the COD income realized from the reacquisition of an applicable debt instrument may determine, in any manner, the portion, if any, of a partner’s COD income amount that is the partner’s deferred amount and the portion, if any, of a partner’s COD income amount that is the partner’s included amount. Form 1040nr ez Thus, for example, one partner’s deferred amount may be zero while another partner’s deferred amount may equal that partner’s COD income amount (or any portion thereof). Form 1040nr ez A partner may exclude from income the partner’s included amount under § 108(a)(1)(A), (B), (C), or (D), if applicable. Form 1040nr ez The provisions of this section 4. Form 1040nr ez 04(3) apply for purposes of § 108(i) only and are not intended as an interpretation of or a change to existing law under § 704. Form 1040nr ez . Form 1040nr ez 05 Contents of Election Statement. Form 1040nr ez A statement meets the requirements of this section 4. Form 1040nr ez 05 if the statement— (1) Label. Form 1040nr ez States “Section 108(i) Election” across the top. Form 1040nr ez (2) Required information. Form 1040nr ez Provides, for each applicable debt instrument the reacquisition of which generates COD income that the taxpayer is electing to defer under § 108(i)— (a) The name and taxpayer identification numbers, if any, of the issuer or issuers of the applicable debt instrument; (b) A general description of the applicable debt instrument (including the issue and maturity dates) and, in the case of any person other than a C corporation, a general description of the person’s trade or business to which the applicable debt instrument is connected; (c) A general description of the reacquisition transaction or transactions generating the COD income (including the date(s) of the transaction(s)); (d) The total amount of COD income for the applicable debt instrument that results from the reacquisition (in the case of a partnership, the aggregate of the partners’ COD income amounts) and a general description of the manner in which this amount is calculated; (e) The amount of COD income for the applicable debt instrument that the taxpayer is electing to defer under § 108(i); (f) In the case of a partnership, a list of partners that have a deferred amount, their identifying information and each partner’s deferred amount; and in the case of an S corporation, a list of shareholders with COD income deferred under § 108(i), their identifying information and each shareholder’s share of the S corporation’s deferred COD income; and (g) In cases in which a new debt instrument is issued or deemed issued in exchange for the applicable debt instrument (including exchanges under § 108(e)(4), § 108(i)(2)(B), and § 1. Form 1040nr ez 1001-3), the issuer’s name, the issuer’s taxpayer identification number, if any, a general description of the new debt instrument and whether the new debt instrument has OID, and if the new debt instrument has OID, a schedule of the OID that the issuer expects to accrue each taxable year on the instrument and the amount of OID that the issuer expects to defer under § 108(i)(2) each taxable year. Form 1040nr ez . Form 1040nr ez 06 Supplemental information. Form 1040nr ez The statement described in section 4. Form 1040nr ez 05 of this revenue procedure may specify for each applicable debt instrument an amount greater than the amount identified in section 4. Form 1040nr ez 05(2)(e) of this revenue procedure that the taxpayer elects to defer under § 108(i) in the event the Service subsequently concludes that the taxpayer understated the amount of COD income described in section 4. Form 1040nr ez 05(2)(d) of this revenue procedure. Form 1040nr ez This additional amount of COD income the taxpayer elects to defer may be described as the entire additional COD income, or as a percentage of any additional COD income. Form 1040nr ez If the taxpayer is a partnership, the partnership must specify each partner’s share of the partnership’s additional COD income that would be deferred (the partner’s additional deferred amount), which the partnership may describe for each partner as the partner’s entire share of the partnership’s additional COD income or as a percentage of the partner’s share of the partnership’s additional COD income. Form 1040nr ez If the taxpayer is an S corporation, the S corporation must specify each shareholder’s share of the S corporation’s additional COD income that would be deferred, which the S corporation may describe for each shareholder as the shareholder’s entire share of the S corporation’s additional COD income or as a percentage of the shareholder’s share of the S corporation’s additional COD income. Form 1040nr ez In the case of partnerships and S corporations, the additional COD income and the portion of additional COD income that would be deferred are allocated or determined as provided in sections 2. Form 1040nr ez 08, 2. Form 1040nr ez 10 and, if applicable, 4. Form 1040nr ez 04(3) of this revenue procedure, respectively, as if the additional COD income was realized. Form 1040nr ez . Form 1040nr ez 07 Additional Requirements for Certain Partnerships Making a § 108(i) Election. Form 1040nr ez The rules of this section 4. Form 1040nr ez 07 apply to partnerships other than partnerships described in section 4. Form 1040nr ez 10 of this revenue procedure. Form 1040nr ez (1) Information filing on Schedule K-1 (Form 1065 and Form 1065-B). Form 1040nr ez For the taxable year in which the § 108(i) election is made, the partnership must report on the Schedule K-1 (Form 1065 or Form 1065-B), Partner’s Share of Income, Deductions, Credits, etc. Form 1040nr ez , in the manner specified in the instructions to the forms, for each partner § 108(i) information on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made. Form 1040nr ez Partnerships reporting § 108(i) information on the 2008 Schedule K-1 (Form 1065 or Form 1065-B) must report for each partner on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made: (a) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(1) or § 108(i)(5)(D)(i) or (ii), in box 11 (“other income”) using code F for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (b) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii) or § 108(i)(5)(D)(i) or (ii), in box 13 (“other deductions”) using code W for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (c) The partner’s deferred amount that has not been included in income in the current or prior taxable years, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (d) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (e) The partner’s deferred § 752 amount that is treated as a distribution of money to the partner under § 752 in the current taxable year, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); and (f) The partner’s deferred § 752 amount remaining as of the end of the current taxable year, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B). Form 1040nr ez (2) Election information statement provided to partners. Form 1040nr ez The partnership must attach to the Schedule K-1 (Form 1065 or Form 1065-B) provided to each partner for the taxable year in which the § 108(i) election is made a statement satisfying the requirements of this section 4. Form 1040nr ez 07(2). Form 1040nr ez The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner must retain that partner’s statement, in their respective books and records. Form 1040nr ez A statement meets the requirements of this section 4. Form 1040nr ez 07(2) if the statement— (a) Label. Form 1040nr ez States “Section 108(i) Election Information Statement for Partners” across the top. Form 1040nr ez (b) Required information. Form 1040nr ez Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies— (i) The partner’s COD income amount, the partner’s deferred amount, and the partner’s included amount; (ii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (iv) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); (v) The partner’s share of each liability of the partnership described in section 4. Form 1040nr ez 05(2)(g) of this revenue procedure; (vi) The partner’s share of the decrease in the partnership liability that results from the reacquisition of the applicable debt instrument; (vii) The partner’s share of the decrease in the partnership liability that results from the reacquisition of the applicable debt instrument that is treated as a distribution of money to the partner under § 752 in the current taxable year; (viii) The partner’s deferred § 752 amount as described in section 2. Form 1040nr ez 09 of this revenue procedure; (ix) The partner’s additional deferred amount as described in section 4. Form 1040nr ez 06 of this revenue procedure; and (x) The date of the reacquisition transaction generating the COD income. Form 1040nr ez (c) If a partner fails to provide the written statement required by section 4. Form 1040nr ez 07(3) of this revenue procedure, the partnership must indicate that the amounts described in section 4. Form 1040nr ez 07(2)(b)(vii) and (viii) of this revenue procedure cannot be calculated because the partner did not provide the information necessary to report these amounts. Form 1040nr ez (3) Partner reporting requirements. Form 1040nr ez The partnership must make reasonable efforts prior to making a § 108(i) election to secure from each partner with a deferred amount for which it does not have the information necessary to compute the partner’s basis in its partnership interest (and its deferred § 752 amount as described in section 2. Form 1040nr ez 09 of this revenue procedure) a written statement signed under penalties of perjury that includes this information. Form 1040nr ez Each partner with a deferred amount must provide this written statement to the partnership within 30 days of the date of request by the partnership. Form 1040nr ez A partner’s failure to comply with this reporting requirement does not invalidate the partnership’s election under § 108(i) for an applicable debt instrument only if the partnership makes reasonable efforts before making the § 108(i) election to obtain the written statement from the partner and otherwise complies with the requirements of section 4 of this revenue procedure. Form 1040nr ez If a partner provides its written statement under this section 4. Form 1040nr ez 07(3) after the partnership has provided to the partner the Section 108(i) Election Information Statement for Partners, the partnership must provide to the partner a revised Section 108(i) Election Information Statement for Partners reporting the information required under section 4. Form 1040nr ez 07(2)(b)(vii) and (viii) of this revenue procedure and report the partner’s deferred § 752 amount on the partner’s Schedule K-1 (Form 1065 or Form 1065-B) in subsequent taxable years. Form 1040nr ez . Form 1040nr ez 08 Additional Requirements for an S Corporation Making a § 108(i) Election. Form 1040nr ez (1) Information filing on Schedule K-1 (Form 1120S). Form 1040nr ez For the taxable year in which the § 108(i) election is made, the S corporation must report on the Schedule K-1 (Form 1120S), Shareholder’s Share of Income, Deductions, Credits, etc. Form 1040nr ez , in the manner specified in the instructions to the forms, for each shareholder § 108(i) information on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made. Form 1040nr ez S corporations reporting § 108(i) information on the 2008 Schedule K-1 (Form 1120S) must report for each shareholder, on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made, the shareholder’s share of the S corporation’s: (a) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(1) or § 108(i)(5)(D)(i) or (ii), in box 10 (“other income”) using code E; (b) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii), or § 108(i)(5)(D)(i) or (ii), in box 12 (“other deductions”) using code S; (c) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years, in box 17 (“other information”) using code T; and (d) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years, in box 17 (“other information”) using code T. Form 1040nr ez (2) Election information statement provided to shareholders. Form 1040nr ez The S corporation must attach to the Schedule K-1 (Form 1120S) provided to each shareholder for the taxable year in which the § 108(i) election is made, a statement satisfying the requirements of this section 4. Form 1040nr ez 08(2). Form 1040nr ez The S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each shareholder must retain that shareholder’s statement, in their respective books and records. Form 1040nr ez A statement meets the requirements of this section 4. Form 1040nr ez 08(2) if the statement— (a) Label. Form 1040nr ez States “Section 108(i) Election Information Statement for Shareholders” across the top. Form 1040nr ez (b) Required information. Form 1040nr ez Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies, the shareholder’s share of the S corporation’s— (i) COD income that the S corporation elects to defer under § 108(i); (ii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iii) OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (iv) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); and (v) Additional COD income that would be deferred as described in section 4. Form 1040nr ez 06 of this revenue procedure. Form 1040nr ez . Form 1040nr ez 09 Section 108(i) Elections Made on Behalf of Certain Foreign Corporations. Form 1040nr ez The controlling domestic shareholder(s) (or common parent of the controlling domestic shareholder(s), if applicable) of a controlled foreign corporation or a noncontrolled § 902 corporation not otherwise required to file a return of tax may make the § 108(i) election on behalf of the foreign corporation by satisfying the requirements of § 1. Form 1040nr ez 964-1(c)(3). Form 1040nr ez Each controlling domestic shareholder must attach a statement identifying the foreign corporation and satisfying the requirements of section 4. Form 1040nr ez 05 of this revenue procedure and, if applicable, section 4. Form 1040nr ez 06 of this revenue procedure, to its federal income tax return for the taxable year ending within or with the taxable year of the foreign corporation for which the § 108(i) election is made. Form 1040nr ez . Form 1040nr ez 10 Section 108(i) Elections Made By Certain Foreign Partnerships. Form 1040nr ez The rules of this section 4. Form 1040nr ez 10 apply to a foreign partnership making a § 108(i) election that is not otherwise required to file a federal partnership return (“nonfiling foreign partnership”). Form 1040nr ez See § 1. Form 1040nr ez 6031(a)-1(b). Form 1040nr ez (1) A nonfiling foreign partnership making the election must attach a statement satisfying the requirements of section 4. Form 1040nr ez 05 of this revenue procedure and, if applicable, section 4. Form 1040nr ez 06 of this revenue procedure, to a partnership return satisfying the requirements of § 1. Form 1040nr ez 6031(a)-1(b)(5) it files with the Service. Form 1040nr ez In addition, a nonfiling foreign partnership must include in the information required in section 4. Form 1040nr ez 05(2)(d) and (e) of this revenue procedure the aggregate amounts for all partners as well as the aggregate amounts for all U. Form 1040nr ez S. Form 1040nr ez persons (as defined in § 7701(a)(30)) and controlled foreign corporation(s) that are partners with deferred amounts in the nonfiling foreign partnership (“affected partners”). Form 1040nr ez (2) The nonfiling foreign partnership must make the election, in accordance with § 1. Form 1040nr ez 6031(a)-1(b)(5), by the date provided in section 4. Form 1040nr ez 01(1)(a) of this revenue procedure, as if it had a filing obligation for the taxable year in which the reacquisition of the applicable debt instrument occurs. Form 1040nr ez (3) For each affected partner, the partnership must file with the Service a Schedule K-1 (Form 1065) and report on the Schedule K-1 (Form 1065) for the affected partner as provided in section 4. Form 1040nr ez 07(1) of this revenue procedure. Form 1040nr ez Except for this § 108(i) information, the partnership need not complete Part III of the Schedule K-1 (Form 1065). Form 1040nr ez The partnership must provide a copy of the respective Schedule K-1 (Form 1065) to each affected partner and must also attach to the Schedule K-1 (Form 1065) provided to each affected partner a statement satisfying the requirements of section 4. Form 1040nr ez 07(2) of this revenue procedure by the date provided in section 4. Form 1040nr ez 01(1)(a) of this revenue procedure. Form 1040nr ez The partnership should not attach any statement described in section 4. Form 1040nr ez 07(2) of this revenue procedure to the Schedules K-1 that are filed with the Service. Form 1040nr ez However, the partnership must retain the statements provided to the affected partners, and each affected partner must retain that partner’s statement, in their respective books and records. Form 1040nr ez (4) The partnership and each affected partner must satisfy the requirements of section 4. Form 1040nr ez 07(3) of this revenue procedure. Form 1040nr ez . Form 1040nr ez 11 Protective § 108(i) Election. Form 1040nr ez (1) In general. Form 1040nr ez A taxpayer may make a protective election under § 108(i) for an applicable debt instrument if the taxpayer concludes that a particular transaction does not result in the realization of COD income, reports the transaction on its federal income tax return in a manner consistent with the taxpayer’s conclusion, and would be within the scope of this revenue procedure if the taxpayer’s conclusion were incorrect. Form 1040nr ez If the Service at any time determines the taxpayer’s conclusion that the particular transaction does not result in the realization of COD income is incorrect, the taxpayer’s protective election is treated as a valid, irrevocable election under § 108(i). Form 1040nr ez Thus, if a taxpayer makes a protective election, the Service subsequently may require the taxpayer to report COD income deferred pursuant to the valid and irrevocable protective election even if the statute of limitations has expired for the year in which the COD income was realized and the protective election was made. Form 1040nr ez A taxpayer makes a protective election by attaching a statement satisfying the requirements of this section 4. Form 1040nr ez 11(1) to the taxpayer’s original federal income tax return within the period described in section 4. Form 1040nr ez 01(1)(a) of this revenue procedure. Form 1040nr ez The taxpayer also must attach the election to its federal income tax return in each of the 8 or 9 taxable years, as applicable, following the taxable year of the election. Form 1040nr ez A statement meets the requirements of this section 4. Form 1040nr ez 11(1) if the statement— (a) States “Section 108(i) Protective Election” across the top; (b) Provides the information required under section 4. Form 1040nr ez 05(2)(a), (b), and (c) of this revenue procedure; (c) Provides that the amounts described in sections 4. Form 1040nr ez 05(2)(d) and (e) of this revenue procedure are zero; and (d) Provides the information described in section 4. Form 1040nr ez 06 of this revenue procedure. Form 1040nr ez (2) Statements provided to shareholders and partners. Form 1040nr ez (a) For each applicable debt instrument, a partnership or S corporation that makes a protective election must attach to the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) it provides each of its partners or shareholders, as the case may be, for the taxable year in which the protective election is made a statement containing the information described in section 4. Form 1040nr ez 11(1)(b) of this revenue procedure (an S corporation need not provide its shareholders with the date(s) of the transaction(s) that would constitute the reacquisition transaction or transactions) and the partner’s or shareholder’s share of the additional COD income that would be deferred as described in section 4. Form 1040nr ez 11(1)(d) of this revenue procedure. Form 1040nr ez (b) The partnership or S corporation should not attach the statements described in this section 4. Form 1040nr ez 11(2) to the Schedules K-1 that are filed with the Service but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. Form 1040nr ez . Form 1040nr ez 12 Election-Year Reporting by Tiered Pass-Through Entities. Form 1040nr ez (1) A partnership required to file a U. Form 1040nr ez S. Form 1040nr ez partnership return other than under § 1. Form 1040nr ez 6031(a)-1(b)(5), or an S corporation, that receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting its share of any items listed in section 4. Form 1040nr ez 07(1) of this revenue procedure, must report on the Schedules K-1 (Form 1065, Form 1065-B, or Form 1120S) to its partners or shareholders, as the case may be, each partner’s or shareholder’s share of those items (an S corporation only reports to its shareholders the items described in section 4. Form 1040nr ez 07(1)(a) through (d) of this revenue procedure). Form 1040nr ez (2) If a partnership described in section 4. Form 1040nr ez 12(1) of this revenue procedure receives a statement described in sections 4. Form 1040nr ez 07(2) or 4. Form 1040nr ez 10(3) of this revenue procedure or this section 4. Form 1040nr ez 12(2), it must provide each of its partners a statement containing the partner’s share of each of the items listed on each statement received by the partnership, including the information described in section 4. Form 1040nr ez 07(2)(b)(x) of this revenue procedure. Form 1040nr ez If an S corporation receives a statement described in sections 4. Form 1040nr ez 07(2) or 4. Form 1040nr ez 10(3) of this revenue procedure or this section 4. Form 1040nr ez 12(2), it must provide each of its shareholders a statement containing the shareholder’s share of each of the items listed on each statement received by the S corporation that are described in section 4. Form 1040nr ez 07(2)(b)(i), (ii), (iii), (iv) and (ix) of this revenue procedure. Form 1040nr ez The partnership or S corporation must attach this statement or statements to the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) that it provides to each of its partners or shareholders, as the case may be, for the taxable year of the partnership or S corporation. Form 1040nr ez The partnership or S corporation should not attach these statements to the Schedules K-1 that are filed with the Service but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. Form 1040nr ez (3) A partnership that receives a statement described in this section 4 identifying its COD income amount with respect to an applicable debt instrument must allocate its COD income amount, without regard to § 108(i), to the partners in the partnership immediately before the reacquisition transaction in the manner in which the income would be included in the distributive shares of these partners under § 704 and the regulations thereunder, including § 1. Form 1040nr ez 704-1(b)(2)(iii). Form 1040nr ez The partnership may determine in any manner the portion, if any, of a partner’s COD income amount that is the partner’s deferred amount and the portion, if any, of a partner’s COD income amount that is the partner’s included amount. Form 1040nr ez No partner’s deferred amount with respect to an applicable debt instrument may exceed its COD income amount with respect to the applicable debt instrument, and the aggregate of deferred amounts of its partners with respect to an applicable debt instrument must equal the partnership’s deferred amount with respect to the applicable debt instrument. Form 1040nr ez The partnership allocates amounts described in section 4. Form 1040nr ez 06 of this revenue procedure under this section 4. Form 1040nr ez 12(3) as if the additional COD income was realized. Form 1040nr ez (4) The deferred § 752 amount for partners in a partnership making a § 108(i) election is calculated only for the partnership’s direct partners. Form 1040nr ez No further adjustment to the deferred § 752 amount is made to reflect the basis or other attributes of partners that are indirect partners in the partnership. Form 1040nr ez (5) If an S corporation receives a statement described in this section 4 identifying its COD income amount, deferred amount, included amount or additional COD income that would be deferred with respect to an applicable debt instrument, these amounts are shared pro rata only among those shareholders that are shareholders in the S corporation immediately before the reacquisition transaction. Form 1040nr ez (6) This paragraph 4. Form 1040nr ez 12(6) provides the rules for Category 1 and Category 2 filers of Form 8865, Return of U. Form 1040nr ez S. Form 1040nr ez Persons With Respect to Certain Foreign Partnerships, as defined in the instructions for Form 8865, if the foreign partnership, for which the Category 1 or Category 2 filer has a filing requirement, receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting the partnership’s share of any items listed in section 4. Form 1040nr ez 07(1) of this revenue procedure, or a statement described in sections 4. Form 1040nr ez 07(2) or 4. Form 1040nr ez 10(3) of this revenue procedure (because the foreign partnership owns an interest directly or indirectly in another partnership in which an election was made under § 108(i) with respect to that foreign partnership’s distributive share from the other entity). Form 1040nr ez (a) For each partner for whom the Category 1 filer is required to complete a Schedule K-1 (Form 8865) (which includes the Category 1 filer itself), the Category 1 filer must: (i) Include the information described in section 4. Form 1040nr ez 07(1) of this revenue procedure in the Schedule K-1 (Form 8865) that the Category 1 filer files with the Service and completes for the partner; (ii) Produce a statement containing the partner’s share of the items listed on each statement received by the partnership; and (iii) Attach the statement described in section 4. Form 1040nr ez 12(6)(a)(ii) of this revenue procedure to each Schedule K-1 (Form 8865) that it is required to provide to a partner of the foreign partnership. Form 1040nr ez (b) A Category 2 filer must include its share of the information described in section 4. Form 1040nr ez 07(1) on the Schedule K-1 (Form 8865) that it is required to complete. Form 1040nr ez Category 2 filers also must complete a statement containing their share of the items listed on each statement received by the partnership. Form 1040nr ez (c) The Category 1 and Category 2 filers should not attach the statements described in sections 4. Form 1040nr ez 12(6)(a)(ii) and 4. Form 1040nr ez 12(6)(b) of this revenue procedure, respectively, to the Schedules K-1 that are filed with the Service. Form 1040nr ez However, Category 1 filers must retain the statements they complete and each partner must retain its own statement, in their respective books and records. Form 1040nr ez (7) If as a result of § 108(i)(5)(D)(ii), a partner of a partnership described in section 4. Form 1040nr ez 12(1) of this revenue procedure or a shareholder of an S corporation described in section 4. Form 1040nr ez 12(1) of this revenue procedure must recognize items deferred under § 108(i), the partnership or S corporation must report these items on the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) and statements provided to the partner or shareholder pursuant to section 4. Form 1040nr ez 12(1) and (2) of this revenue procedure. Form 1040nr ez Similar rules apply to Category 1 and Category 2 filers (Form 8865) described in section 4. Form 1040nr ez 12(6) of this revenue procedure. Form 1040nr ez (8) The provisions of section 4. Form 1040nr ez 12(2), (3), (5) and (6) of this revenue procedure also apply to a statement received that is described in section 4. Form 1040nr ez 11(2) of this revenue procedure, except that the information that must be provided are those items described in section 4. Form 1040nr ez 11(1)(b) of this revenue procedure (an S corporation need not provide its shareholders with the date(s) of the transaction(s) that would constitute the reacquisition transaction or transactions) and the share of the partner or shareholder in the amounts described in section 4. Form 1040nr ez 11(1)(d) of this revenue procedure. Form 1040nr ez SECTION 5. Form 1040nr ez REQUIRED INFORMATION STATEMENT . Form 1040nr ez 01 Annual Information Statements. Form 1040nr ez Pursuant to § 108(i)(7)(B), a taxpayer that makes an election under § 108(i) (except for a protective election under section 4. Form 1040nr ez 11(1) of this revenue procedure) must attach a statement meeting the requirements of section 5. Form 1040nr ez 02 of this revenue procedure to its federal income tax return for each taxable year beginning with the taxable year following the taxable year for which the taxpayer makes the election and ending with the first taxable year in which all items deferred under § 108(i) have been recognized. Form 1040nr ez . Form 1040nr ez 02 Contents of Statement. Form 1040nr ez A statement meets the requirements of this section 5. Form 1040nr ez 02 if the statement— (1) Label. Form 1040nr ez States “Section 108(i) Information Statement” across the top; (2) Required information. Form 1040nr ez Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies— (a) COD income deferred under § 108(i) that is included in income in the current taxable year under § 108(i)(1); (b) COD income deferred under § 108(i) that is included in income in the current taxable year under § 108(i)(5)(D), including a description and date of the acceleration event described in § 108(i)(5)(D); (c) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years (in the case of a partnership, the aggregate of the partners’ deferred amounts that have not been included in income in the current or prior taxable years, and in the case of an S corporation, the S corporation’s COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years); (d) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (e) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D); and (f) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years. Form 1040nr ez (3) Election attached. Form 1040nr ez Includes a copy of the election statement described in section 4. Form 1040nr ez 05 of this revenue procedure. Form 1040nr ez . Form 1040nr ez 03 Additional Annual Reporting Requirements for Certain Partnerships. Form 1040nr ez The rules of this section 5. Form 1040nr ez 03 apply to partnerships other than partnerships described in section 5. Form 1040nr ez 05 of this revenue procedure. Form 1040nr ez (1) In general. Form 1040nr ez A partnership that makes an election under § 108(i) (except for a protective election under section 4. Form 1040nr ez 11(1) of this revenue procedure) must attach to its federal income tax returns the statements required under section 5. Form 1040nr ez 01 of this revenue procedure. Form 1040nr ez In addition, for each taxable year in which a statement is required under section 5. Form 1040nr ez 01 of this revenue procedure, the partnership must report on the Schedule K-1 (Form 1065 or Form 1065-B) for each partner § 108(i) information in the manner described in section 4. Form 1040nr ez 07(1) of this revenue procedure. Form 1040nr ez (2) Annual information statements provided to partners. Form 1040nr ez The partnership must attach to the Schedule K-1 (Form 1065) provided to each partner for each taxable year in which a statement is required under section 5. Form 1040nr ez 01 of this revenue procedure, a statement meeting the requirements of this section 5. Form 1040nr ez 03(2). Form 1040nr ez The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner must retain that partner’s statement, in their respective books and records. Form 1040nr ez A statement meets the requirements of this section 5. Form 1040nr ez 03(2) if the statement— (a) Label. Form 1040nr ez States “Section 108(i) Annual Information Statement for Partners” across the top of the statement. Form 1040nr ez (b) Required information. Form 1040nr ez Clearly identifies for each applicable debt instrument to which a § 108(i) election applies— (i) The partner’s deferred amount that has not been included in income as of the end of the prior taxable year; (ii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(1); (iii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iv) The partner’s deferred amount that has not been included in income in the current or prior taxable years; (v) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (vi) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (vii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); (viii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years; and (ix) The partner’s deferred § 752 amount that is treated as a distribution of money to the partner under § 752 in the current taxable year and any remaining deferred § 752 amount. Form 1040nr ez If a partner fails to provide the written statement required by section 4. Form 1040nr ez 07(3) of this revenue procedure, the partnership must indicate that the amounts described in this section 5. Form 1040nr ez 03(2)(b)(ix) cannot be calculated because the partner did not provide the information necessary to report these amounts. Form 1040nr ez . Form 1040nr ez 04 Additional Annual Reporting Requirements for an S Corporation. Form 1040nr ez (1) In general. Form 1040nr ez An S corporation that makes an election under § 108(i) (except for a protective election under section 4. Form 1040nr ez 11(1) of this revenue procedure) must attach to its federal income tax returns the statements required under section 5. Form 1040nr ez 01 of this revenue procedure. Form 1040nr ez In addition, for each taxable year in which a statement is required under section 5. Form 1040nr ez 01 of this revenue procedure, the S corporation must report on the Schedule K-1 (Form 1120S) for each shareholder § 108(i) information in the manner described in section 4. Form 1040nr ez 08(1) of this revenue procedure. Form 1040nr ez (2) Annual information statements provided to shareholders. Form 1040nr ez The S corporation must attach to the Schedule K-1 (Form 1120S) provided to each shareholder for each taxable year in which a statement is required under section 5. Form 1040nr ez 01 of this revenue procedure a statement meeting the requirements of this section 5. Form 1040nr ez 04(2). Form 1040nr ez The S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each shareholder must retain that shareholder’s statement, in their respective books and records. Form 1040nr ez A statement meets the requirements of this section 5. Form 1040nr ez 04(2) if the statement— (a) Label. Form 1040nr ez States “Section 108(i) Annual Information Statement for Shareholders” across the top; (b) Required information. Form 1040nr ez Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies, the shareholder’s share of the S corporation’s— (i) COD income deferred under § 108(i) that has not been included in income as of the end of the prior taxable year; (ii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(1); (iii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iv) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years; (v) OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (vi) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (vii) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); and (viii) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years. Form 1040nr ez . Form 1040nr ez 05 Additional Annual Reporting Requirements for Certain Foreign Partnerships. Form 1040nr ez (1) The rules of this section 5. Form 1040nr ez 05 apply to nonfiling foreign partnerships. Form 1040nr ez (2) A nonfiling foreign partnership that makes an election under § 108(i) (except for a protective election under section 4. Form 1040nr ez 11(1) of this revenue procedure) must file federal income tax returns with the Service containing the information under § 1. Form 1040nr ez 6031(a)-1(b)(5) for each taxable year in which a statement is required by section 5. Form 1040nr ez 01 of this revenue procedure. Form 1040nr ez (3) The nonfiling foreign partnership must attach to its federal income tax returns the statements required under section 5. Form 1040nr ez 01 of this revenue procedure, but only for that portion of the COD income allocated to affected partners. Form 1040nr ez (4) For each taxable year in which a statement is required under section 5. Form 1040nr ez 01 of this revenue procedure, the nonfiling foreign partnership must provide each affected partner a Schedule K-1 (Form 1065) reporting § 108(i) information in the manner described in section 4. Form 1040nr ez 07(1) of this revenue procedure. Form 1040nr ez Except for this § 108(i) information, the partnership need not complete Part III of the Schedule K-1 (Form 1065). Form 1040nr ez The partnership must provide each affected partner with a copy of the Schedule K-1 (Form 1065) by the date provided in § 1. Form 1040nr ez 6031(b)-1T(b). Form 1040nr ez The partnership must attach the Schedules K-1 (Form 1065) to the federal income tax returns filed with the Service pursuant to section 5. Form 1040nr ez 05(2) of this revenue procedure. Form 1040nr ez (5) For each taxable year for which a statement is required under section 5. Form 1040nr ez 01 of this revenue procedure, the nonfiling foreign partnership must attach to each affected partner’s Schedule K-1 (Form 1065) a statement meeting the requirements of section 5. Form 1040nr ez 03(2) of this revenue procedure. Form 1040nr ez The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain the statements, and each partner must retain that partner’s statement, in their respective books and records. Form 1040nr ez . Form 1040nr ez 06 Information Statements Made on Behalf of Certain Foreign Corporations. Form 1040nr ez Each controlling domestic shareholder must attach a statement identifying the foreign corporation and meeting the requirements of section 5. Form 1040nr ez 02 of this revenue procedure to the shareholder’s federal income tax return for each taxable year for which a statement is required under section 5. Form 1040nr ez 01 of this revenue procedure. Form 1040nr ez . Form 1040nr ez 07 Additional Annual Reporting Requirements for Tiered Pass-Through Entities. Form 1040nr ez (1) A partnership required to file a U. Form 1040nr ez S. Form 1040nr ez partnership return other than under § 1. Form 1040nr ez 6031(a)-1(b)(5), or an S corporation, that receives a Schedule K-1 (Form 1065 or Form 1065-B) described in the second sentence of section 5. Form 1040nr ez 03(1) of this revenue procedure reflecting its share of any § 108(i) information must report on the Schedules K-1 (Form 1065, Form 1065-B, or Form 1120S) to its partners or shareholders, as the case may be, each partner’s or shareholder’s share of those items (an S corporation only reports to its shareholders the items described in section 4. Form 1040nr ez 07(1)(a) through (d) of this revenue procedure). Form 1040nr ez (2) If a partnership described in section 5. Form 1040nr ez 07(1) of this revenue procedure receives a statement described in sections 5. Form 1040nr ez 03(2) or 5. Form 1040nr ez 05(5) of this revenue procedure or this section 5. Form 1040nr ez 07(2), it must provide each of its partners a statement containing the partner’s share of each of the items listed on each statement received by the partnership. Form 1040nr ez If an S corporation receives a statement described in sections 5. Form 1040nr ez 03(2) or 5. Form 1040nr ez 05(5) of this revenue procedure or this section 5. Form 1040nr ez 07(2), it must provide each of its shareholders a statement containing the shareholder’s share of each of the items listed on each statement received by the S corporation that are described in section 5. Form 1040nr ez 03(2)(b)(i) through (viii) of this revenue procedure. Form 1040nr ez The partnership or S corporation must attach the statement or statements to the Schedule K-1 (Form 1065 or Form 1065-B) or Schedule K-1 (Form 1120S) that is provided to each of its partners or shareholders, as the case may be, for the taxable year of the partnership or S corporation. Form 1040nr ez The partnership or S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. Form 1040nr ez (3) This paragraph 5. Form 1040nr ez 07(3) provides the rules for persons described in section 4. Form 1040nr ez 12(6) of this revenue procedure if the foreign partnership, for which the Category 1 or 2 filer has a filing requirement, receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting the partnership’s share of any items described in the second sentence of section 5. Form 1040nr ez 03(1) of this revenue procedure, or a statement described in sections 5. Form 1040nr ez 03(2) or 5. Form 1040nr ez 05(5) of this revenue procedure (because the foreign partnership owns an interest directly or indirectly in another partnership in which an election was made under § 108(i) with respect to that foreign partnership’s distributive share from the other entity). Form 1040nr ez (a) For each partner for whom the Category 1 filer is required to complete a Schedule K-1 (Form 8865) (which includes the Category 1 filer itself), the Category 1 filer must: (i) Include the information described in section 4. Form 1040nr ez 07(1) of this revenue procedure in the Schedule K-1 (Form 8865) that the Category 1 filer files with the Service and completes for the partner; (ii) Produce a statement containing the partner’s share of the items listed on each statement received by the partnership; and (iii) Attach the statement described in section 5. Form 1040nr ez 07(3)(a)(ii) of this revenue procedure to each Schedule K-1 (Form 8865) that it is required to provide to a partner of the foreign partnership. Form 1040nr ez (b) A Category 2 filer must include its share of the information described in section 4. Form 1040nr ez 07(1) on the Schedule K-1 (Form 8865) that it is required to complete. Form 1040nr ez Category 2 filers also must complete a statement containing their share of the items listed on each statement received by the partnership. Form 1040nr ez (c) The Category 1 and Category 2 filers should not attach the statements described in sections 5. Form 1040nr ez 07(3)(a)(ii) and 5. Form 1040nr ez 07(3)(b) of this revenue procedure, respectively, to the Schedules K-1 that are filed with the Service. Form 1040nr ez However, Category 1 filers must retain the statements they complete and each partner must retain its own statement, in their respective books and records. Form 1040nr ez (4) If as a result of § 108(i)(5)(D)(ii), a partner of a partnership described in section 5. Form 1040nr ez 07(1) of this revenue procedure or a shareholder of an S corporation described in section 5. Form 1040nr ez 07(1) of this revenue procedure must recognize items deferred under § 108(i), the partnership or S corporation must report these items on the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) and statements provided to the partner or shareholder pursuant to section 5. Form 1040nr ez 07(1) and (2) of this revenue procedure. Form 1040nr ez Similar rules apply to Category 1 and Category 2 filers (Form 8865) described in section 4. Form 1040nr ez 12(6) of this revenue procedure. Form 1040nr ez SECTION 6. Form 1040nr ez EFFECTIVE DATE This revenue procedure is effective for reacquisitions of applicable debt instruments in taxable years ending after December 31, 2008. Form 1040nr ez SECTION 7. Form 1040nr ez TRANSITION RULE . Form 1040nr ez 01 Noncomplying Election. Form 1040nr ez Except as otherwise provided in this section 7. Form 1040nr ez 01, the Service will treat a § 108(i) election as effective if a taxpayer files an election with the taxpayer’s federal income tax return filed on or before September 16, 2009, using any reasonable procedure to make the election. Form 1040nr ez However, an election that does not comply with section 4 of this revenue procedure will not be effective unless the taxpayer on or before November 16, 2009, files an amended return for the taxable year of the election and complies with the requirements of section 4 of this revenue procedure. Form 1040nr ez . Form 1040nr ez 02 Modification of Election. Form 1040nr ez A taxpayer that files a § 108(i) election on or before September 16, 2009, may modify that election by filing an amended return on or before November 16, 2009 (for example, to modify the amount of COD income the taxpayer elects to defer). Form 1040nr ez To be effective, a modification of an election described in the preceding sentence must satisfy the requirements for an election described in section 4 of this revenue procedure. Form 1040nr ez . Form 1040nr ez 03 Notations. Form 1040nr ez A taxpayer that files the amended return on paper must write “Section 108(i) Election” on the top of the first page. Form 1040nr ez A taxpayer that files the amended return electronically should indicate “Section 108(i) Election” on the return. Form 1040nr ez See Publication 4163, Modernized e-File (MeF) Information for Authorized IRS e-file Providers for Business Returns Tax Year 2008 for more details. Form 1040nr ez SECTION 8. Form 1040nr ez PAPERWORK REDUCTION ACT The collection of information contained in this revenue procedure has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U. Form 1040nr ez S. Form 1040nr ez C. Form 1040nr ez 3507) under control number 1545-2147. Form 1040nr ez An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Form 1040nr ez The collection of information in this revenue procedure is in sections 4, 5 and 7. Form 1040nr ez This information is required to determine the amount of income and deductions a taxpayer elects to defer and to track those amounts until the taxpayer has reported all deferred income and deductions on the taxpayer’s tax return. Form 1040nr ez This information will be used during examination to verify that a taxpayer has correctly deferred income and deductions. Form 1040nr ez The collection of information is required to obtain a benefit. Form 1040nr ez The likely respondents are C corporations, shareholders of S corporations, partners of partnerships, and other individuals engaged in a trade or business, that reacquire applicable debt instruments in 2009 or 2010. Form 1040nr ez The estimated total annual reporting burden is 300,000 hours. Form 1040nr ez The estimated annual burden per respondent varies from 1 to 8 hours, depending on individual circumstances, with an estimated average of 6 hours. Form 1040nr ez The estimated number of respondents is 50,000. Form 1040nr ez Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Form 1040nr ez Generally, tax returns and return information are confidential, as required by § 6103. Form 1040nr ez DRAFTING INFORMATION The principal authors of this revenue procedure are Megan A. Form 1040nr ez Stoner of the Office of Associate Chief Counsel (Passthroughs & Special Industries) and Craig Wojay of the Office of Associate Chief Counsel (Income Tax & Accounting). Form 1040nr ez For further information regarding this revenue procedure, contact Megan A. Form 1040nr ez Stoner at (202) 622-3070 for questions involving partnerships and S corporations, William E. Form 1040nr ez Blanchard at (202) 622-3950 for questions involving OID, Ronald M. Form 1040nr ez Gootzeit at (202) 622-3860 for questions involving foreign entities, Robert Rhyne at (202) 622-7790 for questions involving earnings and profits and consolidated groups, and Craig Wojay at (202) 622-4920 for questions on § 108(i) generally (not toll-free calls). Form 1040nr ez Prev  Up  Next   Home   More Internal Revenue Bulletins
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Forms you can use

Forms Available for Filing Season 2014 (TY 2013)
Form Number Form Name Available
Form 1040 U.S. Individual Income Tax Return

1/31/2014

Form 1040A U.S. Individual Income Tax Return

1/31/2014

Form 1040EZ Income Tax Return for Single and Joint Filers With No Dependents

1/31/2014

Form 1040V Payment Voucher

1/31/2014

Form 1040ES Estimated Tax Payments

2/13/2014

Schedule A Itemized Deductions

1/31/2014

Schedule B Interest and Ordinary Dividends

1/31/2014

Schedule C Profit or Loss From Business

1/31/2014

Schedule C-EZ Net Profit from Business

1/31/2014

Schedule D Capital Gains and Losses

1/31/2014

Schedule E Supplemental Income and Loss

1/31/2014

Schedule EIC Earned Income Credit

1/31/2014

Schedule F Profit or Loss From Farming

1/31/2014

Schedule H Household Employment Taxes

1/31/2014

Schedule J Farm Income Averaging

1/31/2014

Schedule L Standard Deduction for Certain Filers

1/31/2014

Schedule R Credit for the Elderly or the Disabled

1/31/2014

Schedule SE Self-Employment Tax

1/31/2014

Form 1116 Foreign Tax Credit

1/31/2014

Form 1310 Statement of Person Claiming Refund Due of a Deceased Taxpayer

1/31/2014

Form 2106 Employee Business Expenses

1/31/2014

Form 2106EZ Unreimbursed Employee Business Expenses

1/31/2014

Form 2120 Multiple Support Declaration

1/31/2014

Form 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts

1/31/2014

Form 2210F Underpayment of Estimated Tax by Farmers and Fishermen

2/13/2014

Form 2439 Notice to Shareholder of Undistributed Long-Term Capital Gains

1/31/2014

Form 2441 Child and Dependent Care Expenses

1/31/2014

Form 2555 Form 2555 Foreign Earned Income

1/31/2014

Form 2555EZ Form 2555EZ Foreign Earned Income Exclusion

1/31/2014

Form 3468 Investment Credit

1/31/2014

Form 3800 General Business Credit

1/31/2014

Form 3903 Moving Expenses

1/31/2014

Form 4136 Credit for Federal Tax Paid on Fuels

1/31/2014

Form 4137 Social Security and Medicare Tax on Unreported Tip Income

1/31/2014

Form 4255 Recapture of Investment Credit

1/31/2014

Form 4562 Depreciation and Amortization (Including Information on Listed Property)

1/31/2014

Form 4684 Casualties and Thefts

1/31/2014

Form 4797 Sales of Business Property

1/31/2014

Form 4835 Farm Rental Income and Expenses

1/31/2014

Form 4868 Application for Automatic Extension of Time to File U.S. Individual Income Tax Return (Can print and mail now)

E-file on 3/5/14

Form 4952 Investment Interest Expense Deduction

1/31/2014

Form 4972 Tax on Lump Sum Distributions

1/31/2014

Form 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts

1/31/2014

Form 5405 First-Time Homebuyer Credit (Only Page 2, Part IV of the Form, Repayment of Credit may be e-filed)

1/31/2014

Form 5695 Residential Energy Credits

1/31/2014

Form 5884 Work Opportunity Credit

1/31/2014

Form 6198 At-Risk Limitations

1/31/2014

Form 6251 Alternative Minimum Tax-Individuals

1/31/2014

Form 6252 Installment Sale Income

1/31/2014

Form 6478 Credit for Alcohol Used as Fuel

1/31/2014

Form 6765 Credit for Increasing Research Activities

1/31/2014

Form 6781 Gains and Losses from Section 1256 Contracts & Straddles

1/31/2014

Form 8082 Notice of Inconsistent Treatment or Administrative Adjustment Request

1/31/2014

Form 8275 Disclosure Statement

1/31/2014

Form 8275R Regulation Disclosure Statement

1/31/2014

Form 8283 Noncash Charitable Contribution

1/31/2014

Form 8379 Injured Spouse Allocation

1/31/2014

Form 8396 Mortgage Interest Credit

1/31/2014

Form 8453 U.S. Individual Income Tax Transmittal for an IRS e-file Return (This form that can't be e-filed, must be mailed in)

2/27/2014

Form 8582 Passive Activity Loss Limitations

1/31/2014

Form 8582-CR Passive Activity Credit Limitations

1/31/2014

Form 8586 Low-Income Housing Credit

1/31/2014

Form 8594 Asset Acquisition Statement

1/31/2014

Form 8606 Nondeductible IRAs

1/31/2014

Form 8609A Annual Statement for Low-Income Housing Credit

1/31/2014

Form 8611 Recapture of Low-income Housing Credit

1/31/2014

Form 8615 Tax for Children Under Age 18/24 With Investment Income of More Than $1,800

1/31/2014

Form 8689 Allocation of Individual Income Tax to the US Virgin Islands

1/31/2014

Form 8697 Interest Computation Under the Look-Back Method for Completed Long-Term Contracts

1/31/2014

Form 8801 Credit for Prior Year Minimum Tax - Individuals, Estates and Trusts

1/31/2014

Form 8812 Additional Child Tax Credit

1/31/2014

Form 8814 Parents' Election To Report Child's Interest and Dividends

1/31/2014

Form 8815 Exclusion of Interest From Series EE US Savings Bonds Issued After 1989

1/31/2014

Form 8820 Orphan Drug Credit

1/31/2014

Form 8824 Like-Kind Exchanges

1/31/2014

Form 8826 Disabled Access Credit

1/31/2014

Form 8828 Recapture of Federal Mortgage Subsidy

1/31/2014

Form 8829 Expenses for Business Use of Your Home

1/31/2014

Form 8833 Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b)

1/31/2014

Form 8834 Qualified Electric Vehicle Credit

1/31/2014

Form 8839 Qualified Adoption Expense

1/31/2014

Form 8844 Empowerment Zone and Renewal Community Employment Credit

1/31/2014

Form 8845 Indian Employment Credit

1/31/2014

Form 8846 Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips

1/31/2014

Form 8847 Credit for Contributions to Selected Community Development Corporations

1/31/2014

Form 8853 Archer MSAs and Long-Term Care Insurance Contracts

1/31/2014

Form 8859 District of Columbia First-Time Homebuyer Credit

2/13/2014

Form 8862 Information To Claim Earned Income Credit After Disallowance

1/31/2014

Form 8863 Education Credits (Hope and Lifetime Learning Credits)

1/31/2014

Form 8864 Biodiesel and Renewable Diesel Fuels Credit

1/31/2014

Form 8874 New Markets Credit

1/31/2014

Form 8880 Credit for Qualified Retirement Savings Contributions

1/31/2014

Form 8881 Credit for Small Employer Pension Plan Startup Costs

1/31/2014

Form 8882 Credit for Employer - Provided ChildCare Facilities and Services

1/31/2014

Form 8885 Health Coverage Tax Credit

1/31/2014

Form 8886 Reportable Transaction Disclosure Statement

1/31/2014

Form 8888 Direct Deposit of Refund to more than 1 account

1/31/2014

Form 8889 Health Savings Accounts (HSAs)

1/31/2014

Form 8891 US Information Return for Beneficiary of Certain Canadian Registered Retirement Plans

1/31/2014

Form 8903 Domestic Production Activities Deduction

1/31/2014

Form 8906 Distilled Spirits Credit

1/31/2014

Form 8907 Nonconventional Source Fuel Credit

1/31/2014

Form 8908 Energy Efficient Home Credit

1/31/2014

Form 8909 Energy Efficient Appliance Credit

1/31/2014

Form 8910 Alternate Motor Vehicle Credit

1/31/2014

Form 8911 Alternate Fuel Vehicle Refueling Credit

1/31/2014

Form 8915 Qualified Hurricane Katrina Retirement Plan Dists and Repayments

1/31/2014

Form 8917 Tuition and Fees Deduction

1/31/2014

Form 8919 Uncollected Social Security and Medicare Tax on Wages

1/31/2014

Form 8930 Midwestern Disaster Area Distributions

1/31/2014

Form 8931 Agricultural Chemicals Security Credit

1/31/2014

Form 8932 Credit for Employer Differential Wage Payments

1/31/2014

Form 8933 Carbon Dioxide Sequestration Credit

1/31/2014

Form 8936 Qualified Plug-in Electric Drive Motor Vehicle Credit

2/13/2014

Form 8941 Credit for Small Employer Health Insurance Premiums

1/31/2014

Form 8949 Sales and other Dispositions of Capital Assets

1/31/2014

Form 8959 Additional Medicare Tax

2/13/2014

Form 8960 Net Investment Income Tax - Individuals, Estates and Trusts

2/13/2014

Form 9465 Installment Agreement Request

1/31/2014

Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (And Section 1082 Basis Adjustment)

1/31/2014

     

 

 

 

Page Last Reviewed or Updated: 04-Mar-2014

The Form 1040nr Ez

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