2025 Technical, Legislative, and Agency Adjustments

2025 Technical, Legislative, and Agency Adjustments
Changes made to tax forms

Form 8865

Sch K-1 (Form 8865)

Sch K-3 (Form 8865)

Form 1045

Form 5695

Form 3800

Sch A (Form 3800)

Form 1040

IRS updated address fields and added a new line 8b. The new line
indicates that the owner of a qualified business unit (QBU) with a
functional currency different than its owner (including a foreign
disregarded entity, foreign branch, or foreign partnership) is required
to file Form 8964 and related schedules. Filers also has to identify the
number of Forms 8964 being attached.
IRS is including a new reporting requirement under Box 20, code ZZOther which include information capital gains from the sale of certain
farmland under section 1062.
We removed the checkboxes from the top of the form and added new
line F to include check boxes: (1) Final K-3 (2) Amended K-3 (3)
Reserved for future use. The reserved for future use checkbox may be
used in the future if the administrative adjustment request (AAR)
process is updated.
In Part IV, added two new lines, 3a and 3b. Line 3a is to report the
income and gain from the sale or other disposition of section 367(d)(4)
intangible property. Line 3b is to report the income and gain from the
sale or disposition of certain other property.
IRS added line 2c and a new check box to indicate Form 1045 is being
resubmitted (in response to IRS correspondence). Line 17 was
previously used for dual entries, IRS removed the excess child tax
credit (CTC). In addition, IRS added the 34 and 35 to implementen EO
14247.
IRS made significant changes to Part II to reflect the requirement that
taxpayers claiming the 25C credit for specified property placed into
service after 12/31/24 include on their return the unique qualified
product identification number (PIN) assigned to the property by a
qualified manufacturer (QM). IRC 25C(h).
New line B is added. Filers indicate if they are transferors or
transferees of credits
under section 6418. If so, they complete and attach a transfer election
statment. In Part IV. Carryovers of General Business Credits (GBCs), IRS
unshaded line 1q (Form 7218) and 1gg (Form 7211) to report
carryonver of the credits.
New Schedule A (Form 3800), Transfer Election Statement is to be
completed by transferors and transferees making credit transfer
elections under section 6418.
IRS made significant changes to Dependents section and expanded the
information being collected in one place. In addition, new checkboxes
and/or entry spaces has been added to lines 1, 3, 4, 5, 6, 7, 26 and 27.

Form 8949

Form 4562

Sch K-2 (Form 8865)

Sch 1-A (Form 1040)

Sch 2 (Form 1040)

Sch 3 (Form 1040)

Part I, IRS added boxes G, H, and I to indentify short-term transactions
reported on Form 1099-DA. Box C will now be used for short-tem
transaction not reported on Form 1099-B or 1099-DA.
Part II, IRS added boxes J, K, and L to indentify long-term transactions
reported on Form 1099-DA. Box F will now be used for short-tem
transaction not reported on Form 1099-B or 1099-DA.
IRS added multiple lines to increase compliance and awareness of
reporting requirements.
* New line 19h to report 50-year property.
* New line 20e to report 50-year property.
* New line 23a to enter the portion of the basis attributable to
capitalized interest costs under section 263A(f). New line to enter all
other Section 263A(f) costs other than the capitalized interest cost
under under section 263A(f).
* new line 24c with checkboxes for taxpayers to report whether the
aircraft is owned, leased, or chartered.
IRS added new line "B" for two check boxes:(1) [ ] Amended K-2 and (2)
[ ] Reserved for future use.
In Part IV, IRS added two new lines, 3a and 3b. Line 3a is to report the
income and gain from the sale or other disposition of section 367(d)(4)
intangible property. Line 3b is to report the income and gain from the
sale or disposition of certain other property.
P.L. 119-21 created four new deductions that both itemizers and nonitemizers can take. These new deductions include No Tax on Tips
(sec.70201), No Tax on Overtime (sec.70202), No Tax on Car Loan
Interest (sec. 70203), and the Enhanced Senior Deduction (sec.70103).
This is a new form created to capture these new deductions.
Modifications to Part II: Line 4: Added checkboxes to eliminate the
write-ins for Forms 4361 and 4029. We added a third checkbox and
entry space for the write-ins for "Exempt-Notary," "Exempt
Community Income," and "Exempt-See Attached Statement."
Line 10: Reserved for future use. Removed Repayment of the First
Time Homebuyer Credit. The repayment period ended in 2024.
P.L. 119-21, SEC. 70437, for tax year 2025, fiscal year Form 1040 filers
will report the current year tax payment installment, the taxpayer will
enter the 25% installment payment from Form 1062 using Schedule 2,
line 17z. Taxpayers will enter the amount of the installment payment
on Schedule 2, line 17z and enter “1062I” to indicate the payment of
the installment.
For tax year 2025, fiscal year Form 1040 filers will report the 100% of
deferred tax/net tax liability from Form 1062 using Schedule 3, line
13z. Taxpayers will enter the full amount of the deferral/net tax
liability on Schedule 3, line 13z and enter “1062NL” to indicate the
deferral (P.L. 119-21, SEC. 70437)

Form 7220

Form 5471

Form 1040-NR

Form 1040-SS
Form 8908

Form 8933

Form 7207

Form 8864

Form 8939

Form 1040X

New Form 7220, Prevailing Wage and Apprenticeship (PWA)
Verification and Corrections. The purpose of the form is to allow the
IRS to verify that taxpayers meet the recordkeeping requirements for
claiming the increase credits under PWA. The form will also allow
taxpayers to calculate PWA correction penalties.
IRS updated address fields and added a new line 3b, Schedule G. The
new line indicates that if the corporation is required to file Form 8964.
Filers also has to identify the number of Forms 8964 being attached.
* We revised line 13c to capture the total from new Schedule 1-A
(Additional Deductions).
* Line 30 will now capture the refundable portion of the adoption
credit from Form 8839.
* We revised line 32 to capture the refundable portion of the adoption
credit from Form 8839, in addition to the additional child tax credit
from Schedule 8812 (Form 1040), the credit for amount paid with
Form 1040-C, and the amount from Schedule 3 (Form 1040), line 15.
IRS made significant changes to Dependents section. In addition, new
checkboxes and/or entry spaces has been added to lines 1, 6, 8, and
10.
IRS added three new questions, questions A, B and C before Part I and
a new Part III, Qualified Homes' Addresses.
In Part III, IRS added new lines 3g and 3h after 3f for displacement
factor (DF) consideration. Also added new lines 4, 5, and 6 for credit
before reduction, credit reduction for tax-exempt
bonds, and credit after reduction.
Part II of Form 7207 has been updated to include new Line 6b for
reporting the new critical mineral "metallurgical coal," effective for tax
years beginning after July 4, 2025.
Form 8864 was revised to incorporate the changes that restored the
qualified agri-biodiesel production credit according to P.L. 119-21,
Section 70521(j). The qualified agri-biodiesel production credit was
extended through 2026.
Line 11 was split into 3 sublines. Line 11a is the total adoption credit
available for the year per child. Line 11b figures how much of the total
credit is refundable, per child. Line 11c is the total refundable credit
available to the taxpayer for the current year. This amount will be
reported on line 13 and then carried over to Form 1040, 1040-SR, and
1040-NR line 30.
We added a bullet list. The first bullet requires filers to attach to their
Form 1040-X a completed Form 1040, 1040-SR, or 1040-NR with their
changes. The second bullet requires taxpayers to attach supporting
documents and new or changed forms to their Form 1040-X. We make
it clear that the completion of Part II is required.

Form 8990

Form 6261

Form 1062

Sch A (Form 1062)

Form 8839

Form 1116

P.L. 119-21, section 70303(a) restored the deduction allowable for
depreciation, amortization, or depletion attributable to a trade or
business as an addition to tentative taxable income in calculating
adjusted taxable income for purposes of the limitation on business
interest expense under section 163(j). We are using line 11 (which was
previously reserved) to report the allowable deductions for
depreciation, amortization, or depletion
Line 1 has been split into Line 1a and Line 1b. Line 1b subtracts all
below-the-line deductions except the senior deduction from AGI (P.L.
119-21 sec.70103, IRC 56(b)(1)(D)).
New Form 1062 is being created to allow taxpayers to elect under
section 1062 to defer the net income tax attributable to the gain on
the sale or exchange of qualified farmland property during the tax
year. Form 1062 provides information to figure net 1062 tax liability.
We are creating a new Schedule A (Form 1062) for taxpayers to file for
each qualified sale or exchange of qualified farmland for purposes of
the section 1062 election.
Line 11 was split into 3 sublines. Line 11a is the total adoption credit
available for the year per child. Line 11b figures how much of the total
credit is refundable, per child. Line 11c is the total refundable credit
available to the taxpayer for the current year. This amount will be
reported on line 13 and then carried over to Form 1040, 1040-SR, and
1040-NR line 30.
Line 18. We revised line 18 to reflect recent legislative changes. Per IRC
904(b)(1) the taxable income reported on Form 1116, line 18, is
computed without any deduction for personal exemptions under
section 151. Section 70103 of P.L. 119-21 modifies section 151 to allow
for a deduction for seniors from 2025 through 2028. This new
deduction for seniors is considered a "personal exemption" as the term
is used in IRC 904(b)(1); therefore, this exemption must be added back
when reporting taxable income on Form 1116, line 18. We have
modified line 18 accordingly.

Sch A (Form 8825)

IRS develop new Schedule A (Form 8825), Rental Real Estate Other
Deductions, with the purpose to decrease the amount of white paper
attachments and provide a standard reporting structure for taxpayers.

Form8964-ELE

New Form 8964-ELE, Section 987 Elections. IRS develop Form 8964-ELE
to make or revoke elections under the section 987 regulations.