Schedule G (Form 8865), Statement of Application of the Gain Deferral Method Under Section 721(c), is an Internal Revenue Service (IRS) schedule that you attach to Form 8865. It reports the section 721(c) property contributed to a partnership, the remaining built-in gain, how partnership items are allocated and whether any acceleration or other events occurred during the tax year. On this page you can fill out the form online on FillingPDF and download or print the completed PDF; the IRS publishes the form and its instructions at www.irs.gov/Form8865.
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What is Schedule G (Form 8865)?
Schedule G (Form 8865), Statement of Application of the Gain Deferral Method Under Section 721(c), is the IRS schedule attached to Form 8865 that reports section 721(c) property contributed to a partnership, the remaining built-in gain, partner allocation percentages and triggering events.
The Internal Revenue Service (IRS) issues it under OMB No. 1545-1668, and the revision printed on it is Rev. December 2021. It is a schedule, not a stand-alone return: the form says to attach it to Form 8865 and to see the Instructions for Form 8865.
The schedule has six parts:
- Part I lists each section 721(c) property with its tax year of contribution, description, recovery period, fair market value, basis, built-in gain and any events that occurred. Line 4a asks whether the tiered partnership rules of Regulations section 1.721(c)-3(d) apply.
- Part II shows remaining built-in gain at the beginning and end of the tax year, remedial income, and gain recognized.
- Part III gives allocation percentages of income, gain, deduction and loss among the U.S. transferor, related domestic partners and related foreign partners.
- Part IV gives the book and tax items allocated to the U.S. transferor.
- Part V asks additional questions, lines 1 through 7b.
- Part VI is for supplemental information.
A "Yes" answer to any question 1 through 6b in Part V means you must also complete Schedule H, and a "Yes" on line 6a means you must complete Schedule O.
Who needs to file Schedule G (Form 8865)?
The person who files Form 8865 and must report the application of the gain deferral method under section 721(c) attaches this schedule to that form. The schedule asks for the name and identification number of the person filing Form 8865, the name and EIN (if any) of the partnership, and the name of the U.S. transferor.
Two boxes identify special cases: Successor partnership and Successor U.S. transferor. Check them only where they describe the entity named on the form. The form refers you to the Instructions for Form 8865 for the Reference ID number, the U.S. transferor and the filing year.
You also use the schedule to report additional section 721(c) property contributed during the tax year (line 6a) and events such as acceleration, termination, successor, tax disposition of a partnership interest or section 367 transfer events.
The schedule itself does not say who is required to file Form 8865 or who may sign for someone else. The Instructions for Form 8865, at www.irs.gov/Form8865, answer those questions.
When to file Schedule G (Form 8865)
Schedule G (Form 8865) is filed whenever you file the Form 8865 it is attached to, so it has no separate due date printed on it. Check the Instructions for Form 8865 at www.irs.gov/Form8865 for the deadline that applies to that form.
The schedule is built around a tax year. Part V asks about events that occurred during the tax year, line 6a asks about property contributed during that year, and the heading asks for the filing year and the tax year of the gain deferral contribution, with an Annual reporting entry. Prepare it with the figures for the year covered by the Form 8865 you are filing. The form also directs you to the instructions for how to complete the filing year entry.
Documents you need
- Form 8865, to which Schedule G is attached; the form directs you to attach it and to see the Instructions for Form 8865.
- Schedule H, if you answer "Yes" to any question 1 through 6b in Part V.
- Schedule O, if you answer "Yes" on line 6a because additional section 721(c) property was contributed during the tax year.
- Additional statement(s) for Part I, if you list more section 721(c) property than the four rows allow; Part II totals must include amounts on an attached statement.
How to fill out Schedule G (Form 8865)
Enter filer and partnership details
At the top, enter the name of the person filing Form 8865 and that person's identification number, then the name of the partnership, its EIN (if any) and the Reference ID number (see instructions).
Complete the transferor and year entries
Enter the name of the U.S. transferor, the filing year and the tax year of gain deferral contribution, and complete the Annual reporting entry, following the Instructions for Form 8865. Check Successor partnership or Successor U.S. transferor if either applies.
List section 721(c) property in Part I
On lines 1 through 4, enter for each property the tax year of contribution (column 1), a description (column 2), the recovery period (column 3), and whether it is section 197(f)(9) property (column 4) or effectively connected income property (column 5). Use additional statement(s) for more properties.
Enter values at contribution
In Part I, column 6, enter the fair market value (a), basis (b) and built-in gain (c) on the date of contribution for each property.
Record events and answer line 4a
In column 7, report any acceleration event (including partial acceleration event), termination, successor, tax disposition of a portion of a partnership interest, or section 367 transfer. Then answer line 4a on the tiered partnership rules, Yes or No.
Complete Part II built-in gain
For each Part I line number, enter remaining built-in gain at the beginning (a) and end (b) of the tax year, remedial income allocated to the U.S. transferor (c), and gain recognized due to an acceleration event (d) or a section 367 transfer (e). Include attached-statement amounts in the Total row.
Enter Part III percentages
For each line, enter percentages of income, gain, deduction and loss allocated to the U.S. transferor, related domestic partners and related foreign partners, in the columns provided.
Enter Part IV allocations
For each Part I line number, enter the book and tax amounts of income, gain, deduction and loss allocated to the U.S. transferor.
Answer the Part V questions
Check Yes or No for lines 1 through 6a, then lines 6b, 7a and 7b where they apply. A Yes to any of lines 1 through 6b requires Schedule H, and a Yes on line 6a requires Schedule O.
Add supplemental information
In Part VI, enter any supplemental information the Instructions for Form 8865 call for.
Review and download the completed PDF
Check that Part I line numbers match across Parts II–IV and that totals are complete. Download or print the completed PDF from FillingPDF and attach it to Form 8865, as described under How to submit.
How to submit Schedule G (Form 8865)
Schedule G (Form 8865) is submitted as an attachment to Form 8865; it has no mailing address, portal or appointment rule of its own.
- With Form 8865: attach the completed schedule to Form 8865 and send the package through the channels given in the Instructions for Form 8865.
- With related schedules: if you answer "Yes" to any question 1 through 6b in Part V, complete Schedule H as well, and if you answer "Yes" on line 6a, complete Schedule O. Include them in the same package.
- Additional statements: if you list more property than the four rows of Part I allow, the form refers to additional statement(s); include them with the schedule, and include in the Part II total any amounts shown on an attached statement.
- Instructions and updates: the form directs you to www.irs.gov/Form8865 for instructions and the latest information.
FillingPDF lets you fill out and download the PDF; submission follows the channels above.
Common mistakes to avoid
- Filing the schedule on its own instead of attaching it to Form 8865, as the form directs.
- Answering "Yes" to any question 1 through 6b in Part V without completing Schedule H.
- Answering "Yes" on line 6a without completing Schedule O, listing the new property in Part I and entering its information in Parts II–IV.
- Leaving the new property off Parts II–IV after contributing it; the Part I line number is what links each row across the parts.
- Entering Part II totals that leave out amounts shown on an attached statement; the total must include them.
- Answering line 7b when line 7a is "No"; line 7b is completed only if the answer to 7a is "Yes".
- Skipping the Successor partnership or Successor U.S. transferor box when the entity named on the form is one.
- Entering the filing year without checking the Instructions for Form 8865, which the form cites for it.
Frequently asked questions
What is Schedule G (Form 8865)?
Schedule G (Form 8865) is the IRS Statement of Application of the Gain Deferral Method Under Section 721(c). You attach it to Form 8865 to report section 721(c) property, remaining built-in gain, partner allocation percentages and events that occurred during the tax year.
Is Schedule G filed separately from Form 8865?
No. The form says to attach it to Form 8865 and to see the Instructions for Form 8865. It has no separate address or due date printed on it, so it is submitted with Form 8865.
When do I also need Schedule H or Schedule O with Schedule G?
Complete Schedule H if you answer "Yes" to any question 1 through 6b in Part V. Complete Schedule O if you answer "Yes" to line 6a, meaning additional section 721(c) property was contributed during the tax year.
What goes in Part I of Schedule G (Form 8865)?
Part I lists each section 721(c) property. For each one you enter the tax year of contribution, a description, the recovery period, fair market value, basis and built-in gain on the contribution date, and any events in column 7. Extra properties go on additional statements.
What if I have more than four properties?
Part I has four numbered lines plus a line for amounts from additional statement(s). List the rest on an attached statement, and make sure the Part II Total includes any amounts shown on that statement.
Where can I find the instructions for Schedule G?
The form refers you to the Instructions for Form 8865, published by the IRS at www.irs.gov/Form8865 along with the latest information. The instructions explain entries such as the Reference ID number, the U.S. transferor and the filing year.
Can I fill out Schedule G (Form 8865) online?
Yes, you can fill out the fillable PDF online on FillingPDF and download or print it. FillingPDF is an independent service and does not file the form with the IRS; you submit it with Form 8865 through the IRS channels.
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