I increased my stake in a foreign partnership from 9% to 11%. Does crossing 10% alone trigger Category 4 filing?
I am a U.S. person investing in a foreign venture partnership. My direct interest was about 9% and I bought a small additional piece that took me to roughly 11%. Nothing else changed operationally, and I am not a controlling partner. I had assumed the filing rules only got serious at 50% control.
Now I am hearing that a move from below 10% to above 10% can itself create Category 4 filing under Form 8865. If that is correct, I need to know whether the threshold crossing alone is enough or whether the IRS is looking for some larger control or transfer event.
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