Form 8865: Reporting Interests in Foreign Partnerships

US persons who own a 10% or more interest in a foreign partnership — or who control a foreign partnership — must file Form 8865, the Return of US Persons With Respect to Certain Foreign Partnerships. Like Form 5471 for foreign corporations, Form 8865 requires detailed disclosure of the partnership's income, deductions, and transactions with US persons. The form must be filed with your annual US tax return, and the penalty for non-filing is $10,000 per year, rising to $50,000 if not corrected after IRS notice. Even if you're a limited partner in a foreign fund or partnership with a small ownership share, you may have filing obligations if you meet the 10% threshold. Expats who participate in foreign real estate partnerships, venture funds, or private equity vehicles should confirm whether Form 8865 applies to their situation.