Federal Report of a Sale or Exchange of Certain Partnership Interests

Report of a Sale or Exchange of Certain Partnership Interests
Form 8308 (Rev. October 2023)
8308

Form
(Rev. October 2023)
Department of the Treasury
Internal Revenue Service
Name of partnership

Report of a Sale or Exchange of
Certain Partnership Interests

OMB No. 1545-0123

Go to www.irs.gov/Form8308 for the latest information.
Phone number

Employer identification number

Number, street, and room or suite no. If a P.O. box, see instructions.
City or town, state or province, country, and ZIP or foreign postal code

Part I

Transferor Information
Record holder of the partnership interest immediately before transferring that interest:
Identifying number

Name
Number and street (including apt. no.)
City or town, state or province, country, and ZIP or foreign postal code

Check if the transferor is foreign:

Beneficial owner of the partnership interest immediately before transferring that interest:
Identifying number

Name
Number and street (including apt. no.)
City or town, state or province, country, and ZIP or foreign postal code

Notice to Transferors: The information on this form has been supplied to the IRS. The transferor in a section 751(a) exchange is required to
treat a portion of the gain realized from the exchange as ordinary income. For more details, see Pub. 541, Partnerships.
Statement by Transferor: The transferor in a section 751(a) exchange is required under Regulations section 1.751-1(a)(3) to attach a statement
relating to the sale or exchange to their return. See Instructions to Transferors on page 3 for more details.

Part II

Transferee Information
Record holder of the partnership interest immediately after the transfer of that interest:
Identifying number

Name
Number and street (including apt. no.)
City or town, state or province, country, and ZIP or foreign postal code

Beneficial owner of the partnership interest immediately after the transfer of that interest:
Identifying number

Name
Number and street (including apt. no.)
City or town, state or province, country, and ZIP or foreign postal code

Part III

Transfer of Partnership Interest

1

Date of sale or exchange of partnership interest:

2

Type of partnership interest transferred:

/

/

A Capital
B Preferred
C Profits
D Other
For Paperwork Reduction Act Notice, see instructions.

Cat. No. 62503I

Form 8308 (Rev. 10-2023)

Page 2
Partner’s Share of Gain (Loss) Required by Sections 751(a) and 1(h)(5) and (6)
The amounts in column (c) should be reported to the selling partner on their Schedule K-1 in box 20 using the
relevant code.

Form 8308 (Rev. 10-2023)

Part IV

(a) Partnership-level
deemed sale gain (loss)

1
2
3

(b1) Percentage interest
in the partnership
transferred

(b2) Number of units in
the partnership
transferred

(c) Partner-level deemed
sale gain (loss)

Section 751(a) gain (loss) . . .
Section 1(h)(5) gain . . . . .
Deemed section 1250 unrecaptured gain

Sign here only if you
are filing this form by
itself and not with
Form 1065.

K-1
box 20
code

AB
AC
AD

Under penalties of perjury, I declare that I have examined this return, including accompanying attachments, and to the best of my knowledge
and belief, it is true, correct, and complete.

/
Signature of partnership representative or partner or limited liability company member

What’s New
For transfers occurring on or after January 1,
2023, Form 8308, Parts I and II, have been
expanded; and Parts III and IV have been
added. Parts I and II request information
regarding the record holder, as well as the
beneficial owner of the transferor and
transferee of the partnership interest. Part I
contains a new checkbox to report if the
transferor is foreign. Part III is added to
request information regarding the type of
partnership interest transferred. Part IV has
been added to report, when there is a section
751(a) exchange, the partnership’s and the
transferring partner’s share of section 751
“hot assets” (unrealized receivables and
inventory items) gain (loss), collectibles gain
under section 1(h)(5), and unrecaptured
section 1250 gain under section 1(h)(6).

General Instructions
Section references are to the Internal Revenue
Code unless otherwise noted.
Purpose of form. Form 8308 is filed by a
partnership to report the sale or exchange by
a partner of all or part of a partnership interest
where any money or other property received
in exchange for the interest is attributable to
unrealized receivables or inventory items (that
is, where there has been a section 751(a)
exchange).
Who must file. A partnership must file a
separate Form 8308 for each section 751(a)
exchange of an interest in such partnership.
See Regulations section 1.6050K-1.
Note: Form 8308 doesn’t have to be filed if,
under section 6045, Form 1099-B, Proceeds
From Broker and Barter Exchange
Transactions, is required to be filed with
respect to the sale or exchange.
A partnership must file Form 8308 once the
partnership has notice of the section 751(a)
exchange. The partnership has such notice
when either:
1. The partnership receives written
notification of the exchange from the
transferor that includes the names and
addresses of both parties to the exchange,
the identifying numbers of the transferor and
(if known) of the transferee, and the date of
the exchange; or
2. The partnership has knowledge that
there has been a transfer of a partnership
interest and, at the time of the transfer, the
partnership had any unrealized receivables or
inventory items.

No returns or statements are required
under section 6050K if the transfer wasn’t a
section 751(a) exchange. For example, a
transfer which in its entirety constitutes a gift
for federal income tax purposes isn’t a section
751(a) exchange.
A partnership may rely on a written
statement from the transferor that the
transfer wasn’t a section 751(a) exchange
unless the partnership has knowledge to the
contrary. If a partnership is in doubt whether
partnership property constitutes unrealized
receivables or inventory items or whether a
transfer constitutes a section 751(a)
exchange, the partnership may file Form 8308
to avoid the risk of incurring a penalty for
failure to file.
When to file. Generally, file Form 8308 as an
attachment to Form 1065, U.S. Return of
Partnership Income, for the tax year of the
partnership that includes the last day of the
calendar year in which the section 751(a)
exchange took place. Form 8308 is due at the
time for filing the partnership return, including
extensions.
File Form 8308 for the following situations.
• Untimely or incorrect reporting of section
751(a) exchange by a partner to a BBA
partnership (a partnership subject to the
centralized partnership audit regime under the
Bipartisan Budget Act of 2015)—If a BBA
partnership is notified of a section 751(a)
exchange after it has filed its partnership
return (and the time for filing a superseding
return has expired) and the amount of section
751 gain (loss) wasn’t reported on the
transferor partner’s Schedule K-1 (Form
1065), or if the section 751(a) exchange was
incorrectly reported, then the partnership
must file an Administrative Adjustment
Request (AAR) and include Form 8308 as an
attachment. See the instructions for Form
8082, Notice of Inconsistent Treatment or
Administrative Adjustment Request (AAR);
and Form 1065-X, Amended Return or
Administrative Adjustment Request (AAR), for
more information on filing an AAR. For
additional information, go to www.irs.gov/
bbaaar. If the partnership is still permitted to
file a superseding return, it may do so rather
than file an AAR, before the due date of the
return, including extensions.
Note: A superseding return is a subsequent
return filed within the same filing period as the
original return (including extensions). In
contrast, an amended return is a subsequent
return filed after the extended due date of the
original return.

/

Date

• Untimely or incorrect reporting of section
751(a) exchange by partner to a nonBBA
partnership—If a nonBBA partnership is
notified of a section 751(a) exchange after it
has filed its partnership return (and the time
for filing a superseding return has expired)
and the amount of section 751 gain (loss)
wasn’t reported on the transferor partner’s
Schedule K-1 or if the section 751(a)
exchange was incorrectly reported, then the
partnership must file Form 8308 with an
amended Form 1065 within 30 days of
notification, with the service center where
Form 1065 was filed, and provide amended
Schedule(s) K-1 to the affected partner(s). If
the period for filing a superseding return
hasn’t expired, the partnership may file a
superseding return rather than an amended
return.
• Nonfiling of Form 8308 by the partnership—
If a BBA or nonBBA partnership didn’t file
Form 8308 with its Form 1065 but reported
the correct section 751 gain (loss) on its
return and on its Schedule(s) K-1 issued to
the relevant partner(s), then the partnership
must file Form 8308 separately and within 30
days of notification with the service center
where Form 1065 was filed. No AAR is
needed for BBA partnerships because there is
no change to the originally reported section
751 gain (loss) amount.
• Incorrect reporting of section 751(a)
exchange on Form 8308 by partnership but
correct reporting of section 751(a) exchange
on Schedule K-1—If a BBA or nonBBA
partnership provided an incorrect Form 8308
to the transferor and transferee by January 31
of the year following the calendar year in
which the section 751(a) exchange occurred
or, if later, 30 days after the partnership has
notice of the exchange, but the partnership
corrected the reporting of the section 751(a)
exchange on the Schedule K-1 and provided
a correct Form 8308 with its Form 1065 filing,
then the partnership should provide a
corrected Form 8308 to the partners by the
filing date of the Form 1065. No AAR or
amended return is needed because there is
no change to the Form 1065 filing.
• Incorrect reporting of section 751(a)
exchange on Schedule K-1 or K-3.
• BBA partnership: If the partnership
incorrectly reported the section 751(a)
exchange on Schedule K-1 and the period for
filing a superseding return has expired, the
partnership must file an AAR to make the
correction. A correct Form 8308 that also
correctly reports the gain (loss) should be

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Form 8308 (Rev. 10-2023)

attached to the AAR. If the period for filing a
superseding return hasn’t expired, the
partnership may file a superseding return
rather than an AAR.
• NonBBA partnership: If the partnership
incorrectly reported the section 751(a)
exchange on Schedule K-1 or K-3 and the
period for filing a superseding return has
expired, the partnership must file an amended
return to make the correction. A correct Form
8308 that also correctly reports the gain (loss)
should be attached to the amended return. If
the period for filing a superseding return
hasn’t expired, the partnership may file a
superseding return rather than an amended
return.
Copies of Form 8308 to be furnished to
transferor and transferee. All partnerships
required to file Form 8308 must furnish a copy
of the form to each transferor and transferee
by January 31 of the year following the
calendar year in which the section 751(a)
exchange occurred or, if later, 30 days after
the partnership has notice of the exchange.
If a Form 8308 containing incorrect
information is furnished to the partner before
Form 1065 with Schedule K-1 is filed, the
partnership should notify the partner that the
Form 8308 was incorrect and notify the
partner of the corrections by the due date of
the return, including extensions. If the partner
received a Form 8308 that isn’t consistent
with the information that the partnership
reports on Schedule K-1 (Form 1065), then
the partner should use the information on
Schedule K-1 and request a revised Form
8308 from the partnership if the partnership
didn’t provide it.
Note: The transferor of the interest is
required to notify the partnership of the
exchange of the partnership interest unless,
under section 6045, Form 1099-B is required
to be filed.

Instructions to Transferors
This form alerts transferors that they’re
required to treat a portion of the gain realized
from a section 751(a) exchange as ordinary
income. Under these circumstances, the form
also alerts transferors of any collectibles gain
under section 1(h)(5) and unrecaptured
section 1250 gain under section 1(h)(6). For
more details, see Pub. 541.
Information reported in Part IV must also
have been reported to you in box 20 of
Schedule K-1 (Form 1065), using codes AB,
AC, and/or AD. See the Partner’s Instructions
for Schedule K-1 (Form 1065). In addition, for
foreign transferors, the information on line 1
must also have been reported to you on
Schedule K-3, Part XIII. See the Partner’s
Instructions for Schedule K-3 (Form 1065).
Even if this information is required to be
reported on multiple forms, it must only be
reported on the partner’s tax return once. If a
transferor receives information on a Schedule
K-1 or K-3 that is inconsistent with or has
information missing from what is reported on
Form 8308, the transferor should rely on the
information on Schedule K-1 or K-3.

If a transferor receives Form 8308 after the
Schedule K-1 or K-3 is received and Form
8308 is inconsistent with Schedule K-1 or
K-3, the transferor must contact the
partnership and determine whether a
superseding return, an amended partnership
return (for a nonBBA partnership), or an AAR
(for a BBA partnership) has been filed with the
IRS by the partnership relating to the
information reported on Form 8308. If a
superseding return, an amended Form 1065,
or an AAR has been filed, the transferor
should secure a revised Schedule K-1 and
Schedule K-3 (if applicable) or Form 8986,
Partner’s Share of Adjustment(s) to
Partnership-Related Item(s).
Note: A BBA partnership will only issue Forms
8986 in instances where some or all of the
adjustments reported on the AAR don’t result
in an imputed underpayment (IU) or some or
all of the adjustments do result in an IU but
the partnership makes an election to push out
the adjustments to their partners rather than
paying the IU at the partnership level.
If no amended Schedule K-1, Schedule
K-3, or Form 8986 is secured from the
partnership and the transferor is certain that
the Form 8308 is correct and that transferor
should have received a corrected Schedule
K-1, Schedule K-3, or Form 8986, then the
following apply.
• BBA partnership: the partner should
affirmatively file Form 8082 because the
partner is filing inconsistently with the
Schedule K-1 or K-3 received and is relying
on Form 8308.
• NonBBA partnership: Form 8082 isn’t
required if filing inconsistently with a Schedule
K-1 or K-3 received and relying on Form 8308.
Separate statement required by transferor.
The transferor is required by Regulations
section 1.751-1(a)(3) to attach a statement to
the transferor’s income tax return for the tax
year of the sale or exchange with the
following information.
• The date of the sale or exchange.
• The amount of any gain or loss attributable
to the section 751 property.
• The amount of any gain or loss attributable
to capital gain or loss on the sale of the
partnership interest.

Instructions to Partnerships
Partnership address. Include the suite,
room, or other unit number after the street
address. If the post office doesn’t deliver mail
to the street address and the partnership has
a P.O. box, show the box number instead.
Parts I and II. For Parts I and II, provide the
relevant information for the record holder and/
or beneficial owner of the partnership interest
immediately before the transfer (transferor)
and immediately after the transfer (transferee).
If the transferor or transferee record holder
owns the interest on behalf of another person
as a nominee, agent, or custodian, complete
the information for the record holder. If the

identity of the transferor or transferee
beneficial owner is known, also complete the
information for the beneficial owner. See
Regulations section 1.6050K-1(a)(4)(iii). If the
transferor or transferee is a disregarded entity
for federal income tax purposes, list the
disregarded entity as the record holder and
list the first regarded owner of the partnership
interest as the beneficial owner. If the
transferor or transferee beneficial owner is
also the record holder, only complete the
information for the beneficial owner.
Check the box in Part I if the transferor
beneficial owner of the partnership interest is
a foreign person. If the identity of the
transferor beneficial owner isn’t known, check
this box if the record holder is a foreign
person.
Section 751(a) exchange. A section 751(a)
exchange occurs when money or any
property is exchanged for all or part of a
partnership interest that is attributable to
unrealized receivables or inventory items.
Generally, any sale or exchange of a
partnership interest (or any portion) at a time
when the partnership has any unrealized
receivables or inventory items is a section
751(a) exchange.
Unrealized receivables. Unrealized
receivables, to the extent not previously
includible in income under the partnership’s
accounting method, are any rights to payment
for:
• Goods delivered or to be delivered, to the
extent that the payment would be treated as
received for property other than a capital
asset; and
• Services rendered or to be rendered.
Unrealized receivables also include the
amount of gain that would be ordinary
income if any of the following types of
partnership property were sold on the date of
the section 751(a) exchange.
• Mining property (section 617(f)(2)).
• Stock in an interest charge domestic
international sales corporation (section
992(a)).
• Farm recapture property or farmland
(section 1252(a)).
• Franchises, trademarks, or trade names
(section 1253(a)).
• Oil, gas, or geothermal property (section
1254).
• Stock of a controlled foreign corporation
(section 1248).
• Section 1245 property.
• Section 1245 recovery property.
• Section 1250 property.
• Market discount bonds (section 1278).
• Short-term governmental obligations
(section 1283).
• Other short-term obligations (section
1283(c)).

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Form 8308 (Rev. 10-2023)

Inventory items. Inventory items aren’t just
stock in trade of the partnership. They also
include the following.
• Any properties that would be included in
inventory if on hand at the end of the tax year
or that are held primarily for sale to customers
in the normal course of business.
• Any asset that isn’t a capital asset or isn’t
treated as a capital asset.
• Any other property held by the partnership
that would be considered inventory if held by
the transferor partner.
• Any trade receivables of accrual method
partnerships.
Tiered partnerships. In determining whether
partnership property is an unrealized
receivable or an inventory item, the
partnership is treated as owning its
proportionate share of the property of any
other partnership in which it is a partner. See
section 751(f).
Part III—Transfer of Partnership Interest.
Check the box on Part III, line 2, that identifies
the type of interest the partner transferred in
the partnership. For purposes of Part III, line
2:
• Capital and profits interests are determined
in accordance with Regulations section
1.706-1(b)(4);
• A preferred partnership interest is a
partnership interest having a preference in
payment of distributions or on liquidation over
other partners; and
• “Other” means a partnership interest that
isn’t capital, profits, or preferred.
Part IV—Partner’s Share of Gain (Loss)
Required by Sections 751(a) and 1(h)(5) and
(6). The three categories reported in Part IV
are:
1. Section 751(a) hot assets (unrealized
receivables and inventory items) gain (loss),
2. Collectibles gain under section 1(h)(5),
and
3. Unrecaptured section 1250 gain under
section 1(h)(6).
Column (a). Report the entity-level
calculated gain (loss) for each of the
categories that are taxed at rates higher than
the long-term capital gain tax rates. In
determining the section 751(a) hot assets as
required by Regulations section 1.751-1(a)(2),
the partnership is to calculate the amount of
gain or loss as if the partnership had sold all
of its property in a fully taxable transaction for
cash in an amount equal to the fair market
value of such property (taking into account
section 7701(g)) immediately prior to the
partner’s transfer of the interest in the
partnership. See Regulations section
1.1(h)-1(b)(2) for calculations of gains from
collectible assets, and Regulations section
1.1(h)-1(b)(3) for calculations of unrecaptured
section 1250 gain upon the sale or exchange
of a partnership interest.

Columns (b1) and (b2). Identify the
percentage interest or the number of units in
the partnership transferred. Enter either the
percentage interest in the partnership or the
number of units in the partnership that the
partner transferred in column (b1) or (b2),
respectively. If a partnership is completing
this part for a partner that is treated as
transferring an interest in the partnership
because it received a distribution but whose
ownership interest in the partnership remains
unchanged, enter zero in column (b1) or (b2)
depending on whether the ownership
interests in the partnership are based on a
percentage or units, respectively.
Column (c). Report the partner’s allocable
share of the amounts in column (a) related to
the portion of the interest that was sold. The
amounts in column (c) should be reported in
box 20 of the partner’s Schedule K-1 (Form
1065), with the alpha code listed.
If the transferor is foreign, the partnership
may also be required to complete Schedule
K-3 (Form 1065), Part XIII. See the Partnership
Instructions for Schedules K-2 and K-3 (Form
1065). Even if the partnership must report this
information on multiple forms, the partner
must report it only once on its return.
A partner must generally report the results
of the transfer of a partnership interest on
their related return. This may include reporting
the deemed sale section 751 gain or loss on
Form 4797, Sales of Business Property, and
capital gain or loss on Form 8949, Sales and
Other Dispositions of Capital Assets.
Generally, see Schedule D (Form 1040),
Capital Gains and Losses, and related
instructions for reporting by individuals of any
deemed sale collectibles gain or unrecaptured
section 1250 gain. However, see Schedule P
(Form 1040-NR), Foreign Partner’s Interests in
Certain Partnerships Transferred During Tax
Year, for reporting by nonresident aliens,
foreign trusts, and foreign estates; and
Schedule P (Form 1120-F), List of Foreign
Partner Interests in Partnerships, for reporting
by foreign corporations. If this is an
installment sale, see Form 6252, Installment
Sale Income.
Penalty for late filing of correct Form 8308.
A penalty may be imposed for failing to file
each Form 8308 when due, including
extensions. The penalty may also be imposed
for failing to include all required information
on Form 8308 or for furnishing incorrect
information. The penalty is based on when the
partnership files a correct Form 8308.
The penalty won’t apply to any failure that
the partnership can show was due to
reasonable cause and not willful neglect.
For more details, see sections 6721 and
6724.

Penalty for failure to furnish correct Forms
8308 to transferor and transferee. A penalty
may be imposed for each failure to furnish
when due a copy of Form 8308 to either party
to the exchange. The amount of the penalty
may also be imposed for each failure to give
the transferor or transferee all required
information on each Form 8308 or for
furnishing incorrect information. If the
partnership intentionally disregards the
requirement to report correct information,
each penalty is increased. The penalty won’t
apply to any failure that the partnership can
show was due to reasonable cause and not
willful neglect. See sections 6722 and 6724
for more details.
Paperwork Reduction Act Notice. We ask
for the information on this form to carry out
the Internal Revenue laws of the United
States. You’re required to give us the
information. We need it to ensure that you’re
complying with these laws and to allow us to
figure and collect the right amount of tax.
You aren’t required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB control
number. Books or records relating to a form
or its instructions must be retained as long as
their contents may become material in the
administration of any Internal Revenue law.
Generally, tax returns and return information
are confidential, as required by section 6103.
The time needed to complete and file this
form will vary depending on individual
circumstances. The estimated burden for
business taxpayers filing this form is
approved under OMB control number
1545-0123 and is included in the estimates
shown in the instructions for their business
income tax return.
If you have suggestions for making these
forms simpler, we would be happy to hear
from you. You can send us comments
through www.irs.gov/FormComments. Or, you
can write to the Internal Revenue Service, Tax
Forms and Publications Division, 1111
Constitution Ave. NW, IR-6526, Washington,
DC 20224. Don’t send Form 8308 to this
address. Instead, see When to file on page 2.