Each transferor and transferee that is a party to a sale or exchange of an interest in a partnership (or portion thereof) involving unrealized receivables and inventory (§751 property) must receive IRS Form 8308, Report of a Sale or Exchange of Certain Partnership Interests, from the partnership by the later of:
- January 31 of the year following the calendar year in which the transaction occurred; or
- 30 days after the partnership has received notice of the exchange.
Partnerships that fail to timely furnish Form 8308 to parties involved in the sale are subject to penalties under IRC §6722 for failure to furnish correct payee statements (up to $250 per statement).
Recent changes made to Form 8308 have raised concerns that partnerships may not be able to acquire all information necessary to properly report Form 8308 by January 31, 2025, for transactions occurring in 2024.
Due to these concerns, the IRS has announced that it will not charge penalties under IRC §6722 to partnerships that are required to furnish Form 8308 for transactions occurring in 2024 as long as the partnerships:
- File Form 8308 with Parts I, II, and III completed by the later of:
- January 31, 2025; or
- 30 days after the partnership has received notice of the exchange; and
- File Form 8308 with Part IV completed by the later of:
- The due date of the partnership’s 2024 Form 1065 (including extensions); or
- 30 days after the partnership has received notice of the exchange.
(IRS Notice 2025-2)
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