First year filling taxes for US multi member LLC with foreign members with no ID No. creates error on Form 1065

[apparelbodega]

Our US multi member LLC has 2 US citizens members and 2 foreign partners. When filling form 1065 we get an error on the foreign partners ID No. Since they don't have social security number nor ITIN. What should I put on schedule K-1 form 1065 Part II. E to be able to finish filling our company taxes? 

From what I understand, the foreign partners need to apply for an ITIN number using form W-7 and in order to apply for this, they need to include the tax return that needs the number and a valid identification for the person needing the number.

[ThomasM125 · Accepted solution]

You will not be able to e-file the tax return without the identification numbers. You can complete the return without the numbers and give a copy to the members so they can use it to get a ITIN. 

If you cannot secure the number by the due date of the tax return (3rd month after close of tax year for 2020), you can file for an extension of time to file by filing form 7004.

[apparelbodega]

In order for the foreign partners to submit form W7 requesting the ITIN number, do they need to submit the Scheduke K-1 from form 1065 OR their personal tax return 1040NR?

[gloriah5200]

You should be checking line h for reason to file W-7 and then use Exception 1 for:

• Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc

For additional information please refer to the:

Instructions for Form W-7