marctu
Employee Tax Expert

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I fully understand your follow up question regarding it not being apparent.  To help I am attaching the columns a-g from the first six lines of the K-3:

 

K-3.png

So what then is Column f, which is your concern.   Sourced by Partner only shows up twice in the IRS instructions for the K-3 1065 Instructions This is the one that has an actual instruction though:

 

Column (f). Sourced by partner. You must determine the source and separate category of the income reported in this column. The income in this column will generally be with respect to sale of personal property other than inventory, depreciable property, and certain intangible property sourced under section 865. This column might also include foreign currency gain on a section 988 transaction. If you're a U.S. citizen or resident, sales and gains reported in this column will generally be U.S. source income and not reported on Form 1116 or 1118 unless you elect to re-source such income under an applicable income tax treaty. There are certain exceptions, for example, a U.S. citizen or resident with a tax home (as defined in section 911(d)(3)) in another country is treated as a nonresident if an income tax of at least 10% is imposed by and paid to a foreign country regarding such sale. See the instructions for box 1 of Part I, earlier. Also, the source of foreign currency gain or loss on section 988 transactions may be determined by reference to the residence of the QBU on whose books the asset, liability, or item of income or expense is properly reflected. See the Instructions for Form 1118 and Pub. 514 for additional details.

 

So the answer to your question is that unless there are any numbers in columns b-e, you would be safe unchecking the box as recommended by @Alicia65  since there is unlikely any foreign source income or expenses.   It is also unlikely that any of the items in Column f are foreign either based upon the single instance that the K-3 instructions have any detail on Column f.  


Thank you for your question @Javitch 

 

All the best,

 

Marc T.

TurboTax Live Tax Expert

27 Years of Experience Helping Clients

 

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