One stock I traded in 2021 mailed me the 1065 form, and schedule-K3 box was checked.
Since Schedule K-3 is new this year and not available right now, IRS says as long as the partnership has no foreign income tax paid / foreign income, it is okay to file tax return without Schedule-K this year.
My question is the foreign income tax/income defined here is related to the partnership of the stock I traded , right?
I will file joint returning with my wife. She had some foreign tax paid from her 1099-DIV (on her name) which was nothing related to the stock/partnership I was involved in.
I quoted IRS rules here:
The IRS is providing an additional exception for tax year 2021 to filing the Schedules K-2 and K-3 for certain domestic partnerships and S corporations. To qualify for this exception, the following must be met:
- In tax year 2021, the direct partners in the domestic partnership are not foreign partnerships, foreign corporations, foreign individuals, foreign estates or foreign trusts.
- In tax year 2021, the domestic partnership or S corporation has no foreign activity, including foreign taxes paid or accrued or ownership of assets that generate, have generated or may reasonably expected to generate foreign source income (see section 1.861-9(g)(3)).
