Form 8308: Reporting a Sale of Certain Partnership Interests
Published November 8, 2026
Form 8308 is the partnership's report of a sale or exchange of a partnership interest when the money or property received is attributable to unrealized receivables or inventory items. The IRS calls this a section 751(a) exchange. The form is filed by the partnership, not by the selling partner.
This post is general information from the IRS form and its instructions. It does not say how any particular sale should be reported.
When the form is needed
A partnership files a separate Form 8308 for each section 751(a) exchange of an interest in that partnership. The partnership must file once it has notice of the exchange. It has notice when the transferor gives written notice with the names and addresses of both parties, the identifying numbers, and the date. It also has notice when it knows of a transfer and had unrealized receivables or inventory items at the time.
The form is not needed when Form 1099-B must be filed for the same sale under section 6045. A transfer that is a gift for federal income tax purposes is not a section 751(a) exchange. A partnership may rely on a written statement from the transferor that the transfer was not a section 751(a) exchange, unless it knows otherwise.
If a partnership is in doubt whether its property includes unrealized receivables or inventory items, or whether a transfer is a section 751(a) exchange, the instructions say it may file Form 8308 to avoid the risk of a penalty for failure to file.
Timing
Generally, the completed form, Parts I through IV, is attached to Form 1065 for the partnership tax year that includes the last day of the calendar year in which the exchange took place. The form is due when the partnership return is due, including extensions.
The partnership must still give the transferor and transferee the Parts I, II, and III information by January 31 of the following year. The instructions say that Part IV no longer has to be furnished by that date.
What the form asks
Part I identifies the transferor, the beneficial owner just before the transfer. Part II identifies the transferee, the beneficial owner just after the transfer. Part III gives the date of the sale or exchange and the type of interest transferred: capital, preferred, profits, or other.
Part IV shows each partner's share of gain or loss under sections 751(a), 1(h)(5), and 1(h)(6). Column (c) amounts are reported to the selling partner on Schedule K-1, box 20, using codes AB, AC, and AD. For more on that schedule, see Schedule K-1 From a Partnership: The Basics.
Who gives notice
The transferor must notify the partnership of the exchange, unless Form 1099-B is required for the sale. A transferor in a section 751(a) exchange must treat part of the gain as ordinary income. The instructions say the transferor must attach a statement relating to the sale to its return.
Penalties
The instructions describe penalties for failing to file a correct form by the due date, for including incorrect information, and for failing to furnish a copy when due. A penalty may be waived if the failure was due to reasonable cause and not willful neglect. Intentional disregard can lead to higher penalties.
Edition note
The form is marked Rev. October 2024. The instructions are marked Rev. November 2025 and say they are used with the October 2024 form. Recheck both before each filing season.
Mistakes to avoid
- Filing nothing after the partnership has notice of a section 751(a) exchange.
- Treating a gift of a partnership interest as a section 751(a) exchange.
- Reporting different amounts on Form 8308 and on the partner's Schedule K-1.
- Missing the January 31 statement to the transferor and transferee.
Sources: Sources: IRS, Form 8308, Report of a Sale or Exchange of Certain Partnership Interests (Rev. October 2024) (https://www.irs.gov/pub/irs-pdf/f8308.pdf); Instructions for Form 8308 (Rev. November 2025) (https://www.irs.gov/pub/irs-pdf/i8308.pdf) This is general information, not advice about your specific return.
More guides on: Investments, interest and capital gains
