Our foreign-owned upper-tier partnership received Form 8805 from a lower-tier partnership. Do we just keep it, or does it affect our own withholding return?
We are an upper-tier partnership with foreign partners, and one lower-tier U.S. partnership already withheld under section 1446 and sent us Form 8805. My first instinct was that the form was only for the partner tax files, but our preparer says it also matters for our partnership's own withholding mechanics. That is the part I am trying to understand.
If the lower-tier withholding flows into our own Form 8804 and then has to be passed through to our partners, the file is more layered than I expected. I want to know whether Form 8805 is just informational at our level or whether it changes our own reporting and credit calculations.
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