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Instructions for Form 1065 - Introductory Material

Table of Contents

What's New

  1. Many of the questions on Schedule B have been modified and additional questions have been added. Partnerships that file Schedule M-3 must also complete the questions on the new Schedule C, Additional Information for Schedule M-3 Filers. See the instructions for Schedule B and the separate instructions for Schedule C for details.

  2. On Form 1065, page 1, Item G, checkbox (6) has been added. This checkbox is used to indicate a technical termination, and is checked in conjunction with checkbox (1) or checkbox (2). See Item G for more information.

  3. The automatic extension period for Form 1065 returns that are due to be filed on or after January 1, 2009, has been changed to 5 months. See Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns, for information about filing an extension.

  4. The Where To File instructions have been revised for certain partnerships whose principal business, office, or agency is located in Tennessee or Georgia. See the chart on page 4 for details.

  5. For business start-up and organizational costs paid or incurred after September 8, 2008, a partnership is deemed to have made an election to deduct a certain amount of its start-up and organizational costs under sections 195(b) and 709(b) and is no longer required to attach a statement to the return to make this election. A partnership can elect to forgo this deemed election and amortize all of such costs. See Business start-up and organizational costs on page 16 for details.

  6. The following credits are new for 2008. For details, see the various credit forms and instructions.

    • The cellulosic biofuel credit is reported on Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit.

    • The credit for holders of new clean renewable energy bonds, Midwestern tax credit bonds, qualified energy conservation bonds, qualified forestry conservation bonds, and qualified zone academy bonds (for bonds issued after October 3, 2008) will be reported on Form 8912, Credits to Holders of Tax Credit Bonds.

    • The agricultural chemicals security credit will be reported on Form 8931, Agricultural Chemicals Security Credit.

    • The credit for employer differential wage payments will be reported on Form 8932, Credit for Employer Differential Wage Payments.

    • The credit for carbon dioxide sequestration will be reported on Form 8933, Carbon Dioxide Sequestration Credit.

    • The retention credit and housing credit for affected employers will be reported on Form 5884-A, Credits for Affected Midwestern Disaster Area Employers.

  7. A new code G has been added for box 13 of Schedule K-1 (Form 1065) to report certain charitable contributions for which the adjusted gross income limitation has been suspended. Use code G to report (a) qualified cash contributions for relief efforts in Midwestern disaster areas and (b) qualified conservation contributions of property used in agriculture or livestock production. See Contributions (100%) (code G) on page 29 for details.

  8. The alternative minimum tax limitations on the low-income housing credit have been repealed for credits attributable to buildings placed in service after December 31, 2007. Two new codes have been added to separately report the post-2007 low-income housing credits on Schedule K-1 that are not subject to the alternative minimum tax limitations. See the instructions for lines 15a and 15b on page 32 for details.

  9. The codes used to report the welfare-to-work credit and the new markets credit on Schedule K-1 have changed. These credits are now reported using code P in box 15. See Other credits (code P) on page 33 for more information.

  10. One new code has been added for box 19 of Schedule K-1 (Form 1065). Code C is used to report distributions of section 737 property. See Distributions on page 36 for more information.

  11. Recapture of low-income housing credit. For the disposal of a building or an interest therein occurring after July 30, 2008, a partnership is not required to establish a bond or pledge eligible U.S. Treasury Securities to avoid recapture of the low-income housing credit if it is reasonably expected that the building will continue to be operated as a qualified low-income building for the remainder of the building's compliance period. For additional information on building disposals and the recapture of the low-income housing credit, see Recapture of low-income housing credit (codes F and G) on page 37.

  12. One new code has been added to box 20 of Schedule K-1 (Form 1065). Code W is used to report precontribution gain or loss. See Precontribution gain (loss) (code W) on page 38 for more information. Former code W (other information) is now code X.

Photographs of Missing Children

The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in instructions on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

Contacting Your Taxpayer Advocate

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. The service is free, confidential, tailored to meet your needs, and is available for businesses as well as individuals.

The partnership can contact the TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059 to see if it is eligible for assistance. The partnership can also call or write its local taxpayer advocate, whose phone number and address are listed in the local telephone directory and in Publication 1546, Taxpayer Advocate Service—Your Voice at the IRS. The partnership can file Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), or ask an IRS employee to complete it on its behalf.

For more information, go to
www.irs.gov/advocate.

How To Get Forms and Publications

Internet.   You can access the IRS website 24 hours a day, 7 days a week, at
www.irs.gov to:

  • Download forms, instructions, and publications;

  • Order IRS products online;

  • Research your tax questions online;

  • Search publications online by topic or keyword;

  • View Internal Revenue Bulletins (IRBs) published in the last few years; and

  • Sign up to receive local and national tax news by email.

DVD for tax products.   You can order Publication 1796, IRS Tax Products DVD, and obtain:

  • Current-year forms, instructions, and publications;

  • Prior-year forms, instructions, and publications;

  • Tax Map: an electronic research tool and finding aid;

  • Tax Law frequently asked questions;

  • Tax Topics from the IRS telephone response system;

  • Internal Revenue Code—Title 26;

  • Fill-in, print, and save features for most tax forms;

  • Internal Revenue Bulletins; and

  • Toll-free and email technical support.

  The DVD is released twice during the year. The first release will ship the beginning of January 2009. The second release will ship the beginning of March 2009.

  Purchase the DVD from National Technical Information Service (NTIS) at
www.irs.gov/cdorders for $30 (no handling fee) or call 1-877-233-6767 toll free to purchase the DVD for $30 (plus a $6 handling fee).

By phone and in person.   You can order forms and publications by calling 1-800-TAX-FORM (1-800-829-3676). You can also get most forms and publications at your local IRS office.

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