This publication provides supplemental federal income tax information for partnerships and partners. It supplements the information
provided in the
instructions for Form 1065, U. S. Return of Partnership Income, and the Partner's Instructions for Schedule K-1 (Form 1065).
Generally, a partnership
does not pay tax on its income but “passes through” any profits or losses to its partners. Partners must include partnership items on their tax
returns.
For a discussion of business expenses a partnership can deduct, see Publication 535, Business Expenses. Members of oil and
gas partnerships should
read about the deduction for depletion in chapter 10 of that publication.
Certain partnerships must have a tax matters partner (TMP) who is also a general partner. For information on the rules for
designating a TMP, see
Designation of Tax Matters Partner (TMP) in the Form 1065 instructions and section 301.6231(a)(7)-1 of the regulations.
Many rules in this publication do not apply to partnerships that file Form 1065-B, U.S. Return of Income for Electing Large
Partnerships. For the rules that apply to these partnerships, see the instructions for Form 1065-B. However, the partners
of electing large
partnerships can use the rules in this publication except as otherwise noted.
Withholding on foreign partner or firm.
If a partnership acquires a U.S. real property interest from a foreign person or firm, the partnership may have to
withhold tax on the amount it
pays for the property (including cash, the fair market value of other property, and any assumed liability). If a partnership
has income effectively
connected with a trade or business in the United States, it must withhold on the income allocable to its foreign partners.
A partnership may have to
withhold tax on a foreign partner's distributive share of fixed or determinable income not effectively connected with a U.S.
trade or business. A
partnership that fails to withhold may be held liable for the tax, applicable penalties, and interest.
For more information, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities.
Comments and suggestions.
We welcome your comments about this publication and your suggestions for future editions.
You can write to us at the following address:
Internal Revenue Service
Business Forms and Publications Branch
SE:W:CAR:MP:T:B
1111 Constitution Ave. NW, IR-6406
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number,
including the area code, in
your correspondence.
You can email us at
*taxforms@irs.gov. (The asterisk must be included in the
address.) Please put “
Publications Comment” on the subject line. Although we cannot respond individually to each email, we do appreciate your
feedback and will consider your comments as we revise our tax products.
Tax questions.
If you have a tax question, visit
www.irs.gov or call 1-800-829-1040. We cannot answer tax questions at either
of the addresses listed above.
Ordering forms and publications.
Visit
www.irs.gov/formspubs to download forms and publications, call 1-800-829-3676, or write to the National Distribution Center at the
address shown under
How To Get Tax Help in the back of this publication.
