Schedule B-2 (Form 1065): Election Out of the Centralized Partnership Audit Regime

Schedule B-2 (Form 1065), Election Out of the Centralized Partnership Audit Regime, is attached to Form 1065 or Form 1066. The schedule says certain partnerships with 100 or fewer partners can elect out of the centralized partnership audit regime if each partner is an individual, a C corporation, a foreign entity that would be treated as a C corporation were it domestic, an S corporation, or an estate of a deceased partner.

The schedule lists each eligible partner with a type code and TIN, and the shareholders of each S corporation partner, because the schedule says those shareholders count toward the 100-partner limit. Part III totals the Schedules K-1 required to be issued. By completing Part I, the schedule says, the partnership makes an affirmative statement that all of its partners are eligible partners under section 6221(b)(1)(C). The schedule points to www.irs.gov/Form1065 for instructions.

This page hosts the December 2018 edition. You can fill it out free in your browser on this page and download it without an account.

What's on Schedule B-2 (Form 1065)

Header and eligibility statement

The name of the partnership and its employer identification number (EIN) on each page, and a statement of who can elect out and what completing Part I affirms.

Part I: List of Eligible Partners

Rows 1 to 15 for each partner's name, taxpayer identification number (TIN) and type code.

Part II: List of S Corporation Shareholders

The S corporation partner's name and TIN, then rows 1 to 12 for each shareholder's name, TIN and type code.

Part III: Total Number of Schedules K-1

Line 1 counts Schedules K-1 from Part I and all Parts IV, line 2 counts those from Part II and all Parts V issued by S corporation partners, and line 3 adds them.

Parts IV and V: continuations

Part IV continues the eligible partner list on rows 16 to 100. Part V continues the S corporation shareholder list on rows 13 to 98.

How to fill out Schedule B-2 (Form 1065)

1
Partnership name and EIN
Enter the partnership's name and EIN at the top of each page used.
2
Part I
List each eligible partner with name, TIN and code: I for individual, C for corporation, E for estate of deceased partner, F for eligible foreign entity, S for S corporation. Continue on Part IV after row 15.
3
Part II for each S corporation partner
Enter the S corporation partner's name and TIN, then each shareholder with name, TIN and code I, E, T or O. Use a separate Part II, and Part V if needed, for each S corporation partner.
4
Part III totals
Enter on line 1 the Schedules K-1 required to be issued by the partnership, on line 2 those required to be issued by any S corporation partners, and add them on line 3.
5
Check the 100 limit
Compare line 3 with 100. The note on the schedule says that if line 3 is more than 100, the partnership cannot make the election under section 6221(b).

Why fill Form 1065 Sch. B-2 on indox

You get the real form, filled in a browser tab, with nothing standing between you and the finished PDF.

Fill the form right in your browser, no software to install
Free to fill and free to download, with no account
The official blank straight from the IRS, not a copy someone retyped
Works on a phone, tablet or computer

Where it goes and what it states

Where it goes

The schedule says to attach it to Form 1065 or Form 1066.

Instructions

The schedule says to go to www.irs.gov/Form1065 for instructions and the latest information. Its Paperwork Reduction Act Notice is in the Instructions for Form 1065.

Affirmative statement

By completing Part I, the schedule says, the partnership states that all partners are eligible partners under section 6221(b)(1)(C) and that it has provided all of the information on the schedule.

Who files Schedule B-2 (Form 1065)?

Partnerships with 100 or fewer partners
The schedule says certain partnerships with 100 or fewer partners can elect out, and that all shareholders of any S corporation partner are counted toward that number.
Eligible partners
Part I uses codes for individuals (I), corporations (C), estates of deceased partners (E), eligible foreign entities (F) and S corporations (S).
S corporation partners
Each S corporation partner gets its own Part II, and Part V if needed, listing its shareholders as individual (I), estate of deceased shareholder (E), trust (T) or other (O).
REMICs filing Form 1066
The schedule attaches to Form 1065 or Form 1066 and refers to the instructions for the treatment of real estate mortgage investment conduits (REMICs).
More than 100 Schedules K-1
The schedule's note says that if Part III, line 3 is more than 100, the partnership cannot make the election under section 6221(b).

The schedule is completed by the partnership making the election and attached to its Form 1065 or Form 1066.

Official sources and the blank

Official IRS form page
The agency’s own page for Form 1065 Sch. B-2.
Blank PDF
The official blank form, to print or fill by hand.

Do it all with indox

View all 123 tools

Questions about Form 1065 Sch. B-2

Is Schedule B-2 filed on its own?

No. The schedule says to attach it to Form 1065 or Form 1066.

Which partners are eligible?

The schedule lists individuals, C corporations, foreign entities that would be treated as C corporations were they domestic, S corporations, and estates of deceased partners.

Do S corporation shareholders count toward 100?

Yes. The schedule says the partnership includes all shareholders of any S corporation partner when determining whether it has 100 or fewer partners.

What if Part III, line 3 is more than 100?

The note on the schedule says the partnership cannot make the election under section 6221(b).

Where are the instructions for Schedule B-2?

The schedule points to www.irs.gov/Form1065 and to the Instructions for Form 1065.

Schedule B-2 (Form 1065): Election Out of the Centralized Partnership Audit Regime