There are some new changes to the 2008 Partnership Tax Return (Form 1065) that could make taxpayers have to do some more digging and have us, preparers, asking a lot more questions.
Schedule B (Other Information) was previously a half-page, list of 12 “yes or no” questions whose repsonses could easily be carried forward from the prior year. The new Schedule B (still labeled Other Information) now spans a page and a half! This makes the Form 1065 five pages instead of four.
New reporting requirements ask that you state any corporation, partnership, or trust that “directly or indirectly owns more than 50% of the profit, loss or capital of the partnership”. A separate section asks about individuals or estates that “directly or indirectly owns more than 50% of the profit, loss or capital of the partnership”. The key word that I think definitely has to be focused on is INDIRECTLY; that word alone will require a taxpayer to do some mapping of ownership amongst its partners.
Another question in Schedule B asks about the partnerships ownership of other entities. It requires you list any corporation or partnership directly with at least 20% or own “directly or indirectly 50% or more of the voting power”. Again, the term “indirectly” pops out to makes us think a little harder beyond just the entity filing the return and its partners.
So, as information is beginning to be gathered and you prepare to file your return or have it filed by your trusted tax professional, do yourself (and them) a favor and get this new information together as well. If you want to review all the new questions and required information, check out the IRS website to view a copy of the form.Categories: Accounting Practices, Controller's Corner, Tax Compliance
Tags: 1065, partnership tax form, Schedule B