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What is the W-8BEN and what is its purpose? The W-8BEN is an Internal Revenue Service (IRS) mandated form to collect correct Nonresident Alien (NRA) taxpayer information for individuals for reporting purposes and to document their status for tax reporting purposes.
The final regulations require any transferee to withhold a tax equal to 10% of the amount realized on any transfer of a partnership interest (other than certain PTP interests) under IRC section 1446(f)(1), unless an exception to withholding applies.
Form 8804 is required to be filed by partnerships that have ECTI allocable to foreign partners. This includes both U.S. and foreign partnerships that engage in a trade or business within the United States.
Summary of 1446(f) ECNI is defined as excess cumulative net income earned by a publicly traded partnership since its formation that the partnership has not previously distributed. The partnership will declare this amount, which can be up to the declared distribution amount.
A withholding foreign partnership (WP) is any foreign partnership that has entered into a WP withholding agreement with the IRS and is acting in that capacity.
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Form 8804-C is used by a foreign partner who chooses to provide to a partnership a certification under Regulations section 1.1446-6 to reduce or eliminate the partnerships withholding tax obligation under section 1446 (1446 tax) on the partners allocable share of effectively connected taxable income (ECTI) from the
Before filing a U.S. tax return, foreign partners must have the proper documentation. For individuals, this means having a Taxpayer Identification Number (TIN). Foreign corporate partners, on the other hand, will need an Employer Identification Number (EIN).
Form 8804 penalties A penalty may be imposed for failure to file Form 8804 when due (including extensions). The penalty for not filing Form 8804 when due is usually 5% of the unpaid tax for each month or part of a month the return is late, but not more than 25% of the unpaid tax.
ing to IRC Section 1446(f) brokers, withholding agents and qualified intermediaries (QIs), acting on behalf of non- U.S. Partners, must withhold a tax equal to 10% of the amount realized on the sale or exchange of non-U.S. partnership interests in a PTP.
Form 8804 is required to be filed by partnerships that have ECTI allocable to foreign partners.