Yes, you will need to attach Schedule K-3 to report your foreign tax credit. This is required if you are reporting a foreign tax credit to be distributed to your partners. Here is how you may get started. I must warn you that this form requires quite a bit of information. You may wish to receive help from a CPA this year so that you can get an idea how to report it in subsequent years. To get started.
- Go to the Forms section of your Business return
- Up at the top of the return, select open form.
- Type in K-3 in the search bar.
- Select K-3 page 1
- After entering this section, select Quick Zoom to page 2
- After entering information in this section go to Quick Zoom page 3 and continue to do this until all pages in the K-3 have been completed.
- You may not have data for all of these entries but complete this with your very best effort.
- On the K-1 partner worksheet. Make sure you checked Box 16 to indicate there is K-3 attached.
This year, the IRS is requiring more transparency than in the past when claiming the foreign tax credit. It has made the reporting of this credit much more difficult than in the past. Please read the link I included below for more detailed information.
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