Notice 2018-29, 2018-16 I.R.B. 495, available at

IRS.gov/irb/2018-16_IRB#NOT-2018-29, provides interim guidance regarding withholding of U.S. tax related to transfers of interests in partnerships, other than PTPs, under section 1446(f). It also temporarily suspended withholding under section 1446(f)(4).

On May 7, 2019, the Department of the Treasury and the IRS issued proposed regulations under section 1446(f) (84 FR 21198) for transfers of both non-PTP and PTP interests. During the period that Notice 2018-29 applies, instead of applying the rules described in the Notice, taxpayers and other affected persons may choose to apply Regulations sections 1.1446(f)-1, 1.1446(f)-2, and 1.1446(f)-5 of the proposed regulations in their entirety to all transfers as if they were final regulations.

On November 30, 2020, the Department of the Treasury and the IRS issued final regulations under section 1446(f) in T.D. 9926 (85 FR 76910) for transfers of both non-PTP and PTP interests. The final regulations require any transferee to withhold 10% of the amount realized on

Publication 515 (2026) 67

any transfer of a partnership interest (other than certain PTP interests) under section 1446(f)(1), unless an exception to withholding applies. These regulations generally apply to transfers that occur on or after January 29, 2021. However, in accordance with Notice 2021-51, 2021-36 I.R.B. 361, available at IRS.gov/irb/ 2021-36_IRB#NOT-2021-51 , the rules related to withhold- ing under section 1446(f)(4) and to transfers of PTP inter- ests apply to transfers occurring on or after January 1, 2023. Additionally, the final regulations revised certain provisions in Regulations section 1.1446-4 for withholding under section 1446(a) on PTP distributions. Also, in accordance with Notice 2021-51, these revisions apply to PTP distributions made on or after January 1, 2023. Notices 2018-08 and 2018-29 apply to transfers that occur before the effective date of the final regulations or, as previously described, taxpayers may apply the proposed regulations to transfers of non-PTP interests during this time. For additional guidance to brokers required to withhold on transfers of PTP interests, see Notice 2023-8, 2023-2 I.R.B. 344, available at IRS.gov/irb/ 2023-02_IRB#NOT-2023-8 .