IRS Offers Limited Relief for Incomplete 2024 Form 8308

Running a partnership is more than just managing day-to-day operations—it also means staying compliant with tax regulations. One important form that partnerships must be aware of is Form 8308, also known as the Report of a Sale or Exchange of Certain Partnership Interests.

Generally, partnerships report certain exchanges of a partnership interests, Section 751(a) exchange, to the IRS on Form 8308. A copy of the form must be provided to the transferor and transferee involved in the exchange by January 31 of the year following the calendar year in which the exchange occurred, or 30 days after the partnership has received notice of the exchange, whichever is later.

The IRS is aware many partnerships lack the information needed to comply with the reporting requirements and has provided penalty relief (Notice 2025-02) allowing partnerships until the due date on their return to furnish Part IV of Form 8308 for Section 751(a) exchanges occurring in 2024 if certain requirements are met:

1. The partnership timely and correctly furnishes to the transferor and transferee a copy of Form 8308, Parts I to III, or a statement that includes the same information, by the later of [a] January 31, 2025, or [b] 30 days after the partnership is notified of the Section 751(a) exchange
2. The partnership furnishes to the transferor and transferee a copy of the complete Form 8308, including Part IV, or a statement that includes the same information, by the later of [a] the due date of the partnership’s Form 1065 (including extensions), or [b] 30 days after the partnership is notified of the Section 751(a) exchange.

The penalty relief does not apply to a transferor partner’s failure to provide a partnership notification or failure to file correct information returns.

If you have any questions regarding how this may impact you, please contact your accountant.