Form 8886 (Rev. August 2017) — Tax Year 2017 Checklist
What This Form Does
Form 8886 requires taxpayers to report their involvement in five categories of reportable transactions during tax year 2017: listed transactions, confidential transactions, transactions with contractual protection, loss transactions meeting threshold amounts, and transactions of interest. Filers must use Form 8886 (Rev. March 2011 or later) with the August 2017 instructions, which document the current OTSA mailing address in Ogden, Utah.
Completion Steps for 2017
Step 1: Confirm Reportable Transaction Status Under 2017 Rules
You must verify the transaction falls into one of the five 2017 categories.
- Notice 2009-59 or later 2017 IRS guidance identifies the transaction as a listed transaction.
- Fees exceed $50,000 for individuals and pass-through entities or $250,000 for corporations, excluding S corporations and partnerships or trusts in which all owners or beneficiaries are corporations, excluding S corporations, in a confidential transaction.
- Contractual protection covers the transaction.
- Your return reflects a loss transaction.
- You entered into a transaction of interest after November 1, 2006.
- You must use 2017 threshold amounts only.
Step 2: Verify Section 165 Loss Thresholds for 2017 Tax Year
If the transaction qualifies as a loss transaction, you must confirm your 2017 claimed loss equals or exceeds the applicable threshold.
- At least $2 million in any single tax year or $4 million in any combination of tax years for individuals, trusts, and other pass-through entities.
- At least $10 million in any single tax year or $20 million in any combination of tax years for corporations, excluding S corporations and partnerships with only corporations excluding S corporations as partners, looking through any partners that are also partnerships.
- At least $2 million in any single tax year or $4 million in any combination of tax years for all other partnerships and S corporations.
- At least $50,000 for a single tax year if the loss arose from a section 988 transaction defined in section 988(c)(1) relating to foreign currency transactions.
Only losses claimed in the tax year that the transaction is entered into and the five succeeding tax years are combined for threshold purposes. For a transaction entered in 2017, this includes tax years 2017 through 2022.
Step 3: Complete Item A (Sequential Numbering) if Multiple 2017 Forms
If filing more than one Form 8886 with your 2017 return, you must sequentially number each form. You must enter the statement number for this Form 8886 in the format of 1 of 3.
Step 4: Enter Item B: 2017 Tax Return Form and Year
Enter the form number filed for 2017, such as Form 1040, Form 1065, or Form 1120. The tax year appears as 2017 for calendar-year returns. Fiscal-year returns ending in 2017 require MM/DD/YYYY format, such as 06/30/2017.
Step 5: Check Item C Boxes and File Initial 2017 Disclosure Copy to OTSA
If this is the first 2017 Form 8886 for this transaction, you must check “Initial year filer” and send an exact duplicate copy to OTSA at 1973 Rulon White Blvd., Ogden, Utah 84201. The protective disclosure box is optional. Both the primary return and OTSA copy must be identical, word for word.
Step 6: Complete Lines 1a–1c: Transaction Identification with 2017 Start Year
- Line 1a requires entry of the transaction name or a short description.
- Line 1b requires entry of the year you first entered the transaction in YYYY format, which may differ from 2017.
- Line 1c requires entry of any 9-digit or 11-digit reportable transaction numbers or MA-prefixed registration numbers issued to material advisors.
- You must attach a separate list when multiple names or numbers exist.
Step 7: Check Line 2: All Applicable 2017 Reportable Categories
You must check all boxes that apply.
- Listed transaction
- Confidential transaction
- Contractual protection
- Loss transaction
- Transaction of interest
Notice 2006-6 eliminated the significant book-tax difference category effective January 6, 2006, so this category does not apply to 2017 filings. Separate regulations eliminated the brief asset holding period category for transactions entered into on or after August 3, 2007. You must check the listed transaction or transaction of interest box in addition to any other applicable boxes when either of these categories applies.
Step 8: Complete Lines 3–8: Citation, Parties, Fees, Tax Benefits, and Description
- Line 3 requires citation to the 2017 or current published guidance identifying the listed or transaction-of-interest status.
- Line 4 instructs you not to combine unrelated transactions.
- Line 5 requires identification of entity type, name, EIN, and date of 2017 Schedule K-1 receipt if you participated through partnerships, S corporations, or trusts.
- Line 6 requires listing all advisors, promoters, and recommenders paid fees for 2017 participation with approximate amounts, including fees for analysis, implementation, documentation, and return preparation if unreasonable.
- Line 7a requires checking all tax benefit types, including deductions, exclusions, nonrecognition, credits, basis adjustments, tax-exempt status, or other.
- Line 7b requires describing the 2017 transaction structure, economic reasons, all steps, parties, dates, amounts, and tax result protection.
- Line 8 requires listing all individuals, tax-exempt entities, foreign entities, and related entities involved, with EINs or SSNs, addresses, and roles, plus describing relationships under IRC sections 267(b) or 707(b).
2017-Specific IRS Updates
OTSA Address
Initial-year 2017 Form 8886 copies must be mailed to 1973 Rulon White Blvd., Ogden, Utah 84201. Prior addresses are no longer valid for this filing.
Form 8886 Revision Date
The August 2017 instructions apply to 2017 filings with Form 8886 (Rev. March 2011 or later). You must continue using Form 8886 (Rev. March 2011) until the IRS issues a newer form revision.
Section 6707A Penalty Structure (2017)
Nondisclosure penalties are 75 percent of the tax reduction, with a minimum of $5,000 for individuals or $10,000 in any other case.
- The annual maximum penalty for failure to disclose a reportable transaction other than a listed transaction is $10,000 for individuals or $50,000 in any other case.
- The maximum annual penalty for failure to include information with respect to a listed transaction is $100,000 for individuals or $200,000 in any other case.
60-Day OTSA Extension for 2017 Schedule K-1 Filers
If you are a partner in a partnership, shareholder in an S corporation, or beneficiary of a trust who receives a timely 2017 Schedule K-1 less than 10 calendar days before your return due date, including extensions, and you determine that you participated in a reportable transaction based on receipt of the timely Schedule K-1, Form 8886 will not be considered late if you file Form 8886 with OTSA within 60 days after the due date of your return, including extensions.
Need Help With Your Tax Filing?
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
We offer:
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Call now before filing: (888) 260-9441
Fast transcript pull available
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
