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Form 8986: Partner's Share of Adjustment(s) to Partnership-Related Item(s) (Required Under Sections 6226 and 6227)
IRS Form 8986 is the Partner’s Share of Adjustment(s) to Partnership‑Related Item(s) required under sections 6226 and 6227. Audited or AAR partnerships must issue it to partners and submit it to the IRS within 60 days after the partnership adjustments are finally determined.
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IRS Form 8986 - Partner's Share of Adjustment(s) to Partnership-Related Item(s) (Required Under Sections 6226 and 6227)
IRS Form 8986 is the Partner’s Share of Adjustment(s) to Partnership‑Related Item(s) required under sections 6226 and 6227. Audited or AAR partnerships must issue it to partners and submit it to the IRS within 60 days after the partnership adjustments are finally determined.
Risk Radar
Scan points- 1Missing the 60‑day filing deadline triggers IU liability for the partnership.
- 2Submitting Form 8986 later than 60 days after adjustments are finally determined.
- 3Omitting the partnership’s name or address in Part II, items A and B.
- 4Leaving required fields blank in Part I, such as the entity type checkbox.
- 5Failing to attach Form 8985 when filing Form 8986.
Plain English
Form 8986 reports each partner’s share of a partnership’s tax adjustments. The partnership that made the adjustment sends a copy to every partner and also files the form with the IRS.
Submission Date
- Filing date: 2025-01-14 22:11:59
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when an audited BBA partnership or an AAR partnership must report each partner’s share of adjustments to partnership‑related items.
- Do not use it when you are a partner who is not a pass‑through partner; such partners should use a different reporting form.
- Check Form 8978 instead when you are a non‑pass‑through partner receiving Form 8986 and need to report the adjustments on your tax return.
Form selector
Use this form or another form?
Audited BBA partnership filing its adjustment year return
Required to accompany Form 8986 for electronic submission of audited partnership adjustments
✓ Confirm electronic filing registration on IRS.gov/BBAeSubmit
Pass‑through partner receiving Form 8986 from an AAR partnership and choosing to push out adjustments
Must be filed with the IRS along with Form 8986 to transmit adjustments downstream
✓ Verify fax number 888‑981‑6982 for submission
Partner who is not a pass‑through partner receiving Form 8986
Adjustments are reported on Form 8978 attached to the partner’s tax return
✓ Ensure Form 8978 is attached to the correct reporting year return
Deadline or filing window
The filing deadline is triggered when the partnership’s adjustments are finally determined. The partnership must file Form 8986 within 60 days of that date. Corrected forms may be filed within 60 days of the original due date without IRS permission. After that period, permission is required for further corrections.
Checklist
What you need before filling it out
Adjustment year
Partnership tax year that includes the year the AAR was filed · Defined in the Definitions section of the instructions
Partner’s share of adjustments
Amounts in Part V columns (f), (g), (h) · Part V of Form 8986
Electronic submission requirement
IRS e‑file registration and electronic filing · Section on Where To Submit Form 8986
Fax submission for AAR pass‑through partners
Form 8985 faxed to 888‑981‑6982 · Pass‑through partners of an AAR partnership instructions
Reporting by other partners
Form 8978 attached to partner’s tax return · Instructions for Partners That Receive Form 8986
Before you submit
- 1Verify the form revision date is December 2024.
- 2Confirm you are an audited BBA partnership or an eligible pass‑through partner.
- 3Ensure Part V columns (f), (g), and (h) are completed with the corrected figures.
- 4Attach Form 8985 as required by the submission instructions.
- 5Submit electronically via IRS.gov/BBAeSubmit if you are an audited partnership.
- 6Fax Form 8985 to 888‑981‑6982 if you are a pass‑through partner of an AAR partnership.
- 7If you are a non‑pass‑through partner, prepare Form 8978 instead of Form 8986.
- 8Check that the extended due date of the adjustment year return is met.
- 9Retain a copy of the filed forms for your records.
- 10Sign the form if a signature line is present.
How to file this form
- 1Identify whether the partnership is an audited BBA partnership or an AAR partnership and confirm the election under section 6226 or 6227; retain the election confirmation as proof.
- 2Calculate each partner’s share of adjustments and complete Part V, including the new columns (f), (g), and (h); keep the completed Part V worksheet as proof.
- 3Prepare Form 8985 as the required transmittal and attach it to Form 8986; file the combined package for your records as proof.
- 4Submit the forms electronically via IRS.gov/BBAeSubmit if you are an audited partnership, or fax Form 8985 to 888‑981‑6982 if you are a pass‑through partner of an AAR partnership; obtain the electronic confirmation or fax receipt as proof.
- 5File any required payment using EFTPS, debit/credit card, or Direct Pay and retain the payment confirmation; this serves as proof of payment.
Known limitations
- 1Form 8986 does not apply to partnerships that have not made an election under section 6226 (i.e., non‑audited partnerships).
- 2Form 8986 does not apply to adjustments that result in an imputed underpayment (IU).
- 3Form 8986 does not apply to AAR partnerships that neither elect to push out adjustments to partners nor have adjustments that avoid an IU.
Field map
Compact field-by-field guide
Entity Info
1 items
Name and taxpayer ID of the entity claiming the credit.
Credit Info
1 items
Type of credit or incentive being claimed.
Calculation
2 items
The base amount used to calculate the credit.
Calculated credit amount after applying formulas and limitations.
Certification
1 items
Detailed breakdown supporting the credit calculation.
Signatures
1 items
Sign and date the form.
Almost done reviewing the fields?
Fillable formOpen in Editor->The form is the December 2024 revision; the instructions point to IRS.gov/Form8986 for the latest information and note that Part V column headings have been changed and an "as corrected" column added.
What changed or needs a fresh check
- Edition date — confirm the revision reads December 2024
- Fee — Not stated in the official source
- Mailing address — Not stated in the official source
- Signature — Not stated in the official source
Quick Facts
Downloads
After you file
- 1Retain copies of Form 8986 and any accompanying Form 8985 for future reference.
- 2Keep all books or records related to Form 8986 as long as they may become material to IRS administration.
- 3Submit Forms 8985 and 8986 electronically via IRS.gov/BBAeSubmit for audited BBA partnerships and their pass‑through partners.
- 4Pass‑through partners of an AAR partnership may submit Form 8985 (and Form 8986 if applicable) by fax to 888-981-6982.
- 5Treat all information on Form 8986 as confidential under section 6103.
Sources
- SRCInstructions p.1 — Form 8986 is used by BBA partnerships to furnish each partner’s share of adjustments.
- SRCInstructions p.1 — Audited partnership definition includes election under section 6226.
- SRCInstructions p.2 — Audited partnerships that have made an election under section 6226 must submit Forms 8985 and 8986 electronically.
- SRCInstructions p.2 — AAR partnerships that elect to push out adjustments must include Form 8985 with their AAR along with Forms 8986.
- SRCInstructions p.2 — Pass‑through partners of an AAR partnership must submit Form 8985 by fax at 888-981-6982, with or without Forms 8986.
- SRCInstructions p.2 — Forms 8805 are filed for the calendar year (if filing Forms 1042/1042‑S) or tax year (if filing Forms 8804/8805) that includes the date Form 8986 was furnished.
- SRCInstructions p.7 — Books or records relating to a form must be retained as long as their contents may become material in IRS administration.
- SRCInstructions p.7 — Tax returns and return information are confidential, as required by section 6103.
- SRCInstructions p.1 — Adjustments that do not result in an IU are defined; adjustments that result in an IU are excluded.
- SRCInstructions p.1 — Definition of AAR partnership and affected partner.
Common confusion points
Do I have to submit Form 8986 electronically?
Audited partnerships are required to file electronically, but AAR pass‑through partners may fax.
→ Verify the submission method on IRS.gov/BBAeSubmit or use fax number 888-981-6982 for AAR pass‑through.
Do I need to attach Form 8985 when filing Form 8986?
The instructions list both forms together for audited and AAR partnerships.
→ Ensure Form 8985 is included with Form 8986 before submission.
Are adjustments that create an imputed underpayment reported on Form 8986?
The source only defines adjustments that do NOT result in an IU for reporting.
→ Exclude any adjustment that results in an IU from Form 8986.
Is Form 8986 required for foreign partners?
The source discusses Forms 8805 and withholding but does not state a filing requirement for foreign partners.
→ Confirm foreign‑partner filing obligations on the IRS website.
How long must I keep records related to Form 8986?
Instructions state records must be retained as long as they may become material.
→ Retain all related books and records indefinitely or until they are no longer material.
Is the information I provide on Form 8986 confidential?
Section 6103 confidentiality is mentioned for tax returns and return information.
→ Treat all Form 8986 data as confidential per section 6103.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Form 1042/1042‑S – Used when filing Forms 8805 for foreign partners, indicating the calendar year filing path.
Questions about IRS Form 8986
What is IRS Form 8986 used for?
Form 8986 reports each partner’s share of a partnership’s tax adjustments. The partnership that made the adjustment sends a copy to every partner and also files the form with the IRS.
Who must file IRS Form 8986?
An audited partnership that elected under section 6226, or an AAR partnership filing a BBA adjustment request, must prepare and submit Form 8986.
What information does IRS Form 8986 require?
The form gathers the submitting entity’s details, the partnership’s name and address, the pass‑through partner’s information, the receiving partner’s data, the partner’s total reviewed‑year income, gains, losses, deductions, credits and other items, and required statements.
When is IRS Form 8986 due?
It is due no later than 60 days after the date the partnership adjustments are finally determined.
How do I complete IRS Form 8986?
Complete Part I to identify the entity issuing the form, then fill Part II with the partnership’s name and address. Enter the pass‑through partner’s data in Part III and the receiving partner’s data in Part IV. Report the partner’s reviewed‑year amounts in Part V and any required statements in Part VI. Submit the completed Form 8986 together with Form 8985 to the IRS.
What happens if IRS Form 8986 is filed incorrectly?
Failure to furnish and submit by the due date may result in the audited partnership being liable for the IU.
Do I have to submit Form 8986 electronically?
Audited partnerships are required to file electronically, but AAR pass‑through partners may fax. Verify the submission method on IRS.gov/BBAeSubmit or use fax number 888-981-6982 for AAR pass‑through.
Do I need to attach Form 8985 when filing Form 8986?
The instructions list both forms together for audited and AAR partnerships. Ensure Form 8985 is included with Form 8986 before submission.
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