Do I need to file a K-3?

When entering my K-1 info, it asks if Box 16 is checked. It is and I DO have a K-3. However, TT states: If your Schedule K-3 has no foreign income or taxes on it, you can answer "no" to this question.

I have 2 K3's. In the corresponding K-1 forms, both have box 16 checked. However, Box 21 (Foreign taxes paid or accrued) is blank for both.

Also, on the K-3 for one of them, in Part II (Foreign Tax Credit Limitation), there are no foreign countries listed in the Description section. They all say "US".

In my second K-3, in the same Part II, there are a few sections that list both US and MX. However, the income for MX is listed as 0 everywhere.

Does this mean I can ignore the K-3 for both companies? And answer No to the question "Is box 16 checked on your K-1"?

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1 Best answer

Level 13

Jul 9, 2025 2:37:02 PM

A couple of comments:

One of the issues with the K-3 is that if a partner requests that a K-3 be issued, the partnership no longer meets the requirement that a K-3 does not need to be filed.
The filing exception has very specific guidelines. One of those is if a partner requests a K-3, then the partnership will issue one to all partners. This can be the case even if the partnership does not have foreign activity.
Even though my K-1 checked the K-3 box, the cover letter specifically indicated that all income is effectively connected with a United States trade or business; and no foreign income reported.
I chose to check the box "no" and will fight any battle that may come down the road. Additionally, I most likely will exit this investment just because of this nonsense.

Level 3

Jul 9, 2025 9:48:10 AM

Since nobody has replied to my post yet, I thought I would tag a few people who had helped me earlier on my corresponding K-1 questions. Can anyone help me with this question? My guess is that I should not have to do anything with my K-3. Thank you!

Level 13

Jul 9, 2025 2:37:02 PM

A couple of comments:

One of the issues with the K-3 is that if a partner requests that a K-3 be issued, the partnership no longer meets the requirement that a K-3 does not need to be filed.
The filing exception has very specific guidelines. One of those is if a partner requests a K-3, then the partnership will issue one to all partners. This can be the case even if the partnership does not have foreign activity.
Even though my K-1 checked the K-3 box, the cover letter specifically indicated that all income is effectively connected with a United States trade or business; and no foreign income reported.
I chose to check the box "no" and will fight any battle that may come down the road. Additionally, I most likely will exit this investment just because of this nonsense.

Level 3

Jul 10, 2025 11:23:53 AM

Thank you! I will do the same and answer "no".

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Do I need to file a K-3?