\ninvolving so-called “hot assets” like unrealized
\nreceivables or inventory items \u2014 have faced mounting reporting complexity<\/a> over the past
\nseveral years. Form 8308<\/a>, which must be furnished to
\ntransferor and transferee partners in these exchanges, was
\nsignificantly expanded in late 2023. But in 2025, the IRS proposed
\nregulations offering targeted relief that streamlines these
\nreporting obligations.<\/p>\n
Private companies<\/a> operating through
The Burden of Expanded Form 8308 Reporting<\/p>\n The revised Form 8308, released in October 2023, introduced new
Under earlier rules, partnerships were expected to furnish the
Recognizing the compliance challenges, the IRS offered temporary
What the Proposed Regulations Change<\/p>\n In August 2025, the IRS issued proposed regulations that address
Under the proposal:<\/p>\n
This distinction is important: the IRS still wants complete
When the Changes Apply<\/p>\n
\npartnerships should understand what has changed, what is still
\nneeded, and how to remain compliant.<\/p>\n
\nParts III and IV, significantly increasing the reporting burden for
\npartnerships involved in Section 751(a) exchanges. These exchanges
\noccur when a partner transfers their interest, and some of the
\nproceeds relate to unrealized receivables or inventory \u2014
\nassets that trigger ordinary income treatment rather than capital
\ngain.<\/p>\n
\nfull form \u2014 including detailed breakdowns of ordinary income,
\ncollectible gains, and unrecaptured Section 1250 gain \u2014 by
\nJanuary 31 following the year of the transfer. In many cases,
\npartnerships lacked the data needed to complete Part IV by that
\ndeadline, especially when notice of the transaction came late or
\ndata from transferor partners was incomplete.<\/p>\n
\nrelief through Notice 2024-19<\/a> and Notice 2025-02<\/a>. But that relief was short-term,
\nand uncertainty stayed.<\/p>\n
\nthe most problematic aspect of the expanded Form 8308: the deadline
\nfor furnishing Part IV to transferors and transferees.<\/p>\n![\"1745540a.jpg\"\/](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/02\/1745540a.jpg\")
<\/p>\n
\nPartnerships no longer need to offer Part IV to partners by
\nJanuary 31 (or within 30 days of receiving transaction
\nnotice).
<\/p>\n
\nThey still must give Parts I, II, and III to the transferor and
\ntransferee within the standard timeline.
<\/p>\n
\nPart IV must still be completed and attached to the partnership
\nForm 1065 for the tax year that includes the exchange.
<\/p>\n
\ninformation, but the burden of giving it directly to partners under
\ntight deadlines has been lifted \u2014 at least for now.<\/p>\n