Schedule K-1 says attached K-3, but not received yet. Schedule K-1 FAQ says I don't have to attach K-3 to file my taxes. IRS says I do. Any advice?

[Sunny007]

Yes - we can always do that. However you are missing the key point.

Turbotax keeps on giving error and does not allow me to file it. So I have to remove the K-3 indicator.

However if I do not select the K-3 indicator then I am not entering the correct data as provided by the company.

So to keep the form integrity - TurboTax need  to change the code such that user can select the K-3 indicator (based on K-1 form) but is not getting the error and thus submit the tax returns.

As TT knowns that K-3 is not required, they can and should remove hard error while submitting.

Thanks

[wasd]

@fulton610 

I am into the same situation and i have not yet filed the tax return. Did you already file the tax return? and if yes, was the return accepted?

[fulton610]

Yes, I filed, it was accepted and IRS paid out my refund already. 

[fulton610]

@ Sunny007 

While I understand the incompleteness/error is not ideal, I recommend you file and amend later, if it even comes to that. The very beginning expert said that IRS is not requiring you submit it for 2021 so just uncheck the box and be done with it. Otherwise, you’re stressing yourself out for nothing. 

[Sunny007]

Thanks.

Did you remove the K-3 indicator? Currently TT is giving me hard error and does not allow to go further.

[fulton610]

@Sunny007 

Yes, I "unchecked" the box indicating there's an attached K-3.

[santosh3]

The question is how easy will it be to amend? Also, I think it makes people uncomfortable about unchecking a box that is clearly checked.

Here is what I am thinking:

1. Remove the K1 from your filing entirely for now, and file without it.

2. Once the K3 is available, come back to TurboTax and file the amendment, which will be something like "I need to add a K1."

This might be the most easiest/streamlined way. If you try to amend an already filed K1 later, you have to get the SW to understand that you have filed a K1, but it was incorrect. Using my method, all you will be doing is saying "Missing a K1" and then doing everything from scratch once the K3 is available. Plus, you are not caught in a situation where you deliberately provided wrong info.

What are you guys thoughts on my approach?

[kittycat4]

I am no expert at all, so take this with a grain of salt. I think that it depends on whether K-3 is required this year for a particular partnership or not.

IRS provides further details on additional relief for certain partnerships preparing schedules K-2 a...

If K-3 is not required, then one doesn't really need to worry about it as there'll be no amendment, IMHO.

For example, my limited partnership (MMP) does not do any foreign activity. Hence, K-3 is not required this year and the partnership has no plans to provide it. I don't know why they checked the box, but in the paper copy of the instructions that I received the partnership mentioned that K-3 will not be required.

If the partnership has any foreign activity, it's a different story, I don't know what the best way is, but I believe any form in the return can be amended. 

[santosh3]

In my case, I have USO and UCO...these are oil price ETFs, dealing with futures and contracts. The document says they will send a K3 later, and a limited number may need it. I think you are right, since I am in the US and US resident for tax purposes, it should not be required for me.

This is what the document they provided says:

"Beginning in tax year 2021, items of international tax relevance are now provided by the Partnership on Schedule K-3. A limited number of
unitholders (primarily foreign unitholders as well as certain corporate and/or partnership unitholders) may need the detailed information disclosed
on Schedule K-3 for their specific reporting requirements. The IRS has recently provided additional Schedule K-3 guidance, and we will continue to
monitor any future changes impacting our partners. Accordingly, the Schedule K-3 is not included in the enclosed tax package and will be
available online at www.taxpackagesupport.com/proshares by August 31, 2022.

[Sunny007]

Thanks for the response.

My K-1 CEPQ-Preferred shares. It is 9.25% preferred shares with 8.6% yield. So it is good investment.

I received exactly same wording as a response to my question on K-3 to the company.  They also told that the K3 form will come sometime in  Aug and most people will not need it or will not have impact.

So while I am uncomfortable in unchecking K-3 indicator, I plan to do it rather than not submitting K-1 at all. Not submitting may be considered default but a correction that is unlikely to have material impact on the taxes may be much less severe.

As we see, we have one of the members here already submitted such return and got it accepted.

[kittycat4]

As I understand it, the issue is not if you are a US citizen or resident, but if the partnership that sent you K-1 has income or loss abroad. I believe the particular line on form 1065 that the IRS instructions mention is related to the foreign income.

In my case, the instructions to the K-1 clearly mentioned that the partnership doesn't do any business abroad and that the K-3 will not be required this year. I don't remember the exact wording, but that was how I understood it.

[dwenz]

Mine is MMP as well. Since they are strictly domestic, I plan to uncheck the box and proceed with filing if possible. Fingers crossed. 

[sardin3]

I will be unchecking just like you did. Although I went on live chat and apparently filing an extension may be the "right" route.

[AliciaP1]

If you did not receive the K-3 with your K-1, you can uncheck Box  16 and e-file although you may have to file an amendment when you do receive your K-3.  If you do not wish to file an amendment, you will need to file an extension and then file your return when you receive your K-3.

If you received your K-3 and have entered the information, you will need to print and mail your full return in.  When you have completed your return, TurboTax will prompt you to print your return after you have paid your fees.

K-3 information is not available for e-file yet per the IRS:

Schedules K-2 and K-3 will be available for MeF/XML filing in the following time frames.  If you electronically file your return before the time frames, submit the schedules as separate PDF files attached to the return.   Taxpayers will also be able to file their Schedules K-2 and K-3 via PDF attachments for the entire 2022 filing season.

Form 1065, Schedules K-2 and K-3                      March 20, 2022

Form 1120-S, Schedules K-2 and K-3                   Mid-June 2022

Form 8865, Schedules K-2 and K-3                       January 2023

@sardin3

[Dave Bar]

Well, it's now the 2023 tax filing season and I have received my first K1 for my 2022 tax return that I am in the process of preparing. It is for Enterprise Products Partners, L.P.
That dreaded box 16 is checked indicating that a K3 is attached. But not to anyone’s surprise, there is no K3 attached. I called them and was told that it wouldn't be available until June.
When I asked what to do in the meantime, they simply said to call a tax expert.
I purchase Turbo Tax specifically to avoid the expense of consulting with a “tax expert”
I have a substantial refund coming and would prefer not to delay filing for 3 or more months for what will amount to little to no change in my refund (I only own 400 shares).
Any ideas?