K-3 instructions

For most people with typical business and investment, these are the parts of the Schedule K-3 you'll want to use to derive your foreign-source income:

Do not use U.S. amounts, if listed on lines A, B, C. 

I've included both the Gross and Net Income sections, because I don't know exactly where you are in the program or which values you need. Can you say more about what specifically the question is asking? 

Note: Schedule K-3 reports numerous different types of foreign and investment disclosure situations, many of which are way too complicated for most people to worry about. However, take a look at the face of your K-3 and verify which sections have been checked "Yes" as included. Make sure you are not missing any tax return inputs from these additional reporting sections, if included. 

See also: IRS - Partner’s Instructions for Schedule K-3

I have questions on this topic, too.  I understand your screenshots.  However, the numbers that Turbotax is dealing with don’t seem to match up to the columns on my K3.  So, on the “Enter Income Detail” screen, TT has pulled in a number for me and placed it under “U.S. Source”.  That number corresponds to the total of lines 41 and 43 column F.  (Sorry, I tried to attach screenshots but kept getting an error: “Something went wrong, please check your link and try again”).  Column F does not fall under the “Foreign Source Income” header.  As your screenshots show, foreign source is columns b-e.  Furthermore, lines 41 and 43 don’t have anything in any other column.  So, I can’t tell how much of the total interest is from U.S. sources vs foreign sources.  Any help is appreciated.  And, if there is a way for me to attach files, that would be helpful.  Thanks!

This is a complicated form.

My initial thought is to take a look at the letter that should accompany the K-1 (or tax package).  Read through this commentary as it may say “…...all of our income is effectively connected with a United States trade or business.”  If that is the case, you don’t need to complete for form; just answer the question “no” when asked about the K-3 in TT.  Just because a taxpayer receives a form K-3, doesn’t mean that it applies to them.  

Your initial question seems to imply that this may be the case for your investment.

If not, this column is in most cases all U.S. sourced income.  See the instructions page 6 “…If you’re a U.S. citizen or resident, sales and gains reported in this column will generally be U.S. source income...”.  If you don’t see this language in your tax letter, I would recommend you call the investor relations group for guidance.  There is too little information for me to address in any more detail other than what has been noted.

I actually sold my investment that issued the K-3 just because I didn’t want to deal with this every year; not worth it.