Updated October 18, 2026. Quick answer: Questions 25 to 33 close out Schedule B: opportunity funds, foreign partner transfers, digital assets, an election out of subchapter K, and the audit regime election. Below them the form asks for the partnership representative. Most answers are yes or no, a count, or a percentage, and the instructions say when to attach a form or statement.
Question 25: qualified opportunity fund
The form asks “Does the partnership intend to self-certify as a qualified opportunity fund?”. The instructions say “To be certified as a QOF, the partnership must file Form 1065 and attach Form 8996, even if the partnership had no income or expenses to report.” For the dollar line they say “enter the amount from Form 8996, Part III, line 15”.
Questions 26 and 27: section 864(c)(8) transfers and section 707 disclosures
Question 26 reads “Enter the number of foreign partners subject to section 864(c)(8) as a result of transferring all or a portion of an interest in the partnership or of receiving a distribution from the partnership”. The instructions say “The partnership should include in its response any transfer for which it has received notification or otherwise knows about.” and “the partnership must complete Schedule K-3 (Form 1065), Part XIII, for each foreign partner subject to section 864(c)(8) on a transfer or distribution”.
Question 27 reads “At any time during the tax year, were there any transfers between the partnership and its partners subject to the disclosure requirements of Regulations section 1.707-8?” On where the disclosure goes, the instructions say “The disclosure must be made on the transferor partner’s return using Form 8275, Disclosure Statement, or on an attached statement providing the same information.”
Questions 28 and 29: foreign acquirers and Form 7208
Question 28 asks “Since December 22, 2017, did a foreign corporation directly or indirectly acquire substantially all of the properties constituting a trade or business of your partnership”. The instructions say “The information must be reported even if you conclude that section 7874 doesn’t apply.” For more than one acquisition, “If there are multiple acquisitions that must be reported, list on the lines for question 28 the ownership percentage by vote and value for the most recent acquisition.” They continue: “Attach a statement reporting the ownership percentage by vote and value for the other acquisitions.”
Question 29 reads “Is the partnership required to file Form 7208, Excise Tax on Repurchase of Corporate Stock”, and below it the form says to “complete Form 7208”. The instructions say “the partnership may be required to file Form 7208, Excise Tax on Repurchase of Corporate Stock, and pay the stock repurchase excise tax”.
Questions 30 and 31: digital assets
Question 30 reads “At any time during this tax year, did the partnership (a) receive (as a reward, award, or payment for property or services); or (b) sell, exchange, or otherwise dispose of a digital asset (or financial interest in a digital asset)?” The instructions say “Don’t leave the question unanswered.” and that you answer “by checking the appropriate box.”
“The following actions or transactions in 2025, alone, generally don’t require the partnership to answer” yes. The first two bullets are “Holding a digital asset in a wallet or account.” and “Transferring a digital asset from one wallet or account it owns or controls to another wallet or account that it owns or controls.”
Question 31 is printed as “Reserved for future use”. The instructions have no separate paragraph for it.
Questions 32 and 33: leaving subchapter K or the centralized audit regime
Question 32 reads “Check this box if an election out of subchapter K under section 761 is being made.” The instructions say “A qualifying syndicate, pool, joint venture, or similar organization may elect under section 761(a) not to be treated as a partnership for federal income tax purposes” and “attach a statement that contains” the items listed there. On timing, they say “For calendar-year organizations, Form 1065 must be filed by March 15 following the close of the first calendar year for which the section 761(a) election is being made.” The next sentence is “These dates are subject to filing extensions.” See the Form 1065 due date guide and Form 7004.
Question 33 reads “Is the partnership electing out of the centralized partnership audit regime under section 6221(b)?”. The form adds “the partnership must complete Schedule B-2 (Form 1065)” and, for a no, to “complete Designation of Partnership Representative below”. The instructions say “An election out of the centralized partnership audit regime can only be made on a timely filed return (including extensions).” and “A partnership is an eligible partnership for the tax year if it has 100 or fewer eligible partners in that year.” They define the group: “Eligible partners are individuals, C corporations, S corporations, foreign entities that would be C corporations if they were domestic entities, and estates of deceased partners.”
The partnership representative block
Below question 33 the form says “Enter below the information for the partnership representative”. The instructions say “each partnership must designate, in the manner prescribed by the Secretary, a partner or other person with a substantial presence in the United States as the PR who shall have the sole authority to act on behalf of the partnership”, and that you “provide the name, address, and phone number of the PR”.
For an entity PR, “If an entity is designated as the PR, the partnership must also appoint an individual to act on the entity’s behalf (a DI).” On timing, “A designation of a PR must be made for each respective year on the partnership’s Form 1065.” Changes go through another form: “The partnership can revoke a designation of a PR or DI, and the PR or DI can resign, by submitting Form 8979, Partnership Representative Designation or Resignation.”
On what substantial presence means, the instructions say “they must make themselves available to meet in person with the IRS in the United States at a reasonable time and place as determined by the IRS, and must have a street address in the United States, a U.S. TIN, and a telephone number with a U.S. area code”.
Where the number comes from
The percentages in question 28 and the amount in question 25 are not calculated on this page of the return. The instructions point to the regulations and to Form 8996 for them, and the counts come from the schedules you attach. The earlier questions are on the questions 13 to 24 page, and the whole return is walked through at Form 1065.
Where it goes next
Schedule K follows on the next page of the return, starting with lines 1 to 4. The schedule begins “Partners’ Distributive Share Items”.
Edition and line numbers
This page reads the 2025 Form 1065 and its 2025 instructions, the current files irs.gov served on 2026-10-18. They are the files for the tax year 2025 return, filed in 2026. Form 1065 has no attach-to caption, so check the form’s own title and header instead. The title line reads “U.S. Return of Partnership Income” and the header reads “For calendar year 2025, or tax year beginning”. Check the tax year printed on the form you are filling in and use that year’s line numbers, because a different year’s form can number or word its lines differently.
Common mistakes
- Leaving question 30 blank. The instructions say “Don’t leave the question unanswered.”
- Dropping a section 7874 answer because the rule may not apply. The instructions say “The information must be reported even if you conclude that section 7874 doesn’t apply.”
- Electing out of the audit regime with an ineligible partner. The instructions say “A partnership isn’t eligible to elect out of the centralized partnership audit regime if it’s required to issue a Schedule K-1 to any of the following partners.”
Related: Form 1065, the Form 1065 due date guide, Form 7004, Schedule K-1 (Form 1065) boxes explained, and Form 8865.
Sources
- Instructions for Form 1065, U.S. Return of Partnership Income (2025): https://www.irs.gov/pub/irs-pdf/i1065.pdf
- Form 1065, U.S. Return of Partnership Income (2025): https://www.irs.gov/pub/irs-pdf/f1065.pdf
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.