Form 1065 K3

[ewoldde]

1. I received 'K3 Information' from an MLP/PTP with a note saying 'do not file'..

2. I downloaded the K3 form (20 pages) and instructions (34 pages) from IRS.gov. The information document has section & line notes such that I can complete the IRS form.

3. However, In TT when I go to 'Forms View' the K3 WS does not seem to match up (at least not in an obvious way). HELP!!

4. One of the Help Center replies included a link (https://care-cdn.prodsupportsite.a.intuit.com/forms-availability/turbotaxbusiness_fed_windows_partne...) to a table of Forms Availability that showed K3 forms are supported in printed form. How do I do this?

5. IRS says that for electronic filing, the K3 can be attached as a PDF. Can I do that? (Note that item #3 above is needed, first.)

6. I am sure that we users would appreciate some information about your plans for handling the K3 forms.

[PatriciaV]

If you have a Form 1065 Schedule K-1 for the MLP/PTP, we recommend working through the K-1 interview in TurboTax to complete Schedule K-3. As you have seen, this is a complicated form and several sub-forms were implemented within TurboTax to assist in completing the entries. For this reason, the interview is both easier and more accurate.

With regard to other versions of Schedule K3: According to the IRS, these are the release dates for these forms, based on type of Business Entity. Even after the IRS form is released, it must be integrated into the software, which can take several days.

Form 1120-S                     Mid-June 2022

Form 8865                        January 2023

For more info, see this IRS link.

[ewoldde]

Thanks. 

Apparently, at the time I entered the K1 information, the K3 dialog was not there.

I made a quick pass through it and found some of the items on the information sheet I received did not match--I think I need to complete the IRS K3 Form to complete it.

Two questions:  1) the K3 information shows two countries--how do I enter the second?  2)  Will I need to complete the IRS PDF in order to file?

[PatriciaV]

Please clarify which version of TurboTax you are using - Online or Desktop?

[ewoldde]

Desk-top

[PatriciaV]

You can access Schedule K-3 using Forms mode in TurboTax for desktop. This will allow you to enter the additional information from the K-3 you received.

1. Open your return and click on the Forms icon in the TurboTax header.
2. Look for K-1 Partner for the related Schedule K-1 in the left column.
3. Click the form name to open it in the large window.
4. Scroll down below Box 16 for the Schedule K-3 Worksheet.
5. Enter the information from the Schedule K-3 you received on the appropriate lines of the worksheet.
   Note those with asterisks do not flow to other tax forms; you'll need to enter this information manually in what form is appropriate. Also note the QuickZoom link for Foreign Tax information.

If you need additional assistance completing your entries, please contact the company that provided Schedule K-1 and K-3.

[ewoldde]

Yes, I had already found the K3 WS, but I went there again and did what I could to fill in what the dialog did not cover, even though the descriptions and line numbers do not match the K3 Form.  Then I noticed that many of the items had an asterisk indicating, according to the footnote, that the item is not covered by the program and had to be manually entered in the appropriate document.  For the foreign tax information I updated the K1 Add'l info WS and the WS for Form 1116--as best I could figure it out.

However, the K3 WS items for Section 59a, which were not covered by the dialog are a problem.  There is a single field for each of the four years' data, while the K3 has each year broken into ECI and non-ECI amounts.  Again, these items are marked indicating they are not handled by the program.  Since the instructions for the K3 where this data is entered say this information flows to Form 8991 for the Base Erosion and Anti-Abuse Tax (BEAT) calculation on Form 8991, I tried to generate that form in TT by entering tentative amounts in those items in the K3 WS, but I could not come up with that form.

IRS says that taxes can be e-filed with a PDF  attached containing the K3.  Since the K3 has the data for the 8991, I assume that would be enough.  Will TT support e-filing with a K3 PDF attachment?  Otherwise, it appears I will have to file a paper return with a lot of pages.

[DB Olive]

I've had the same problem as one of the other commenters above -- My K-3 lists 12 countries, but the TT implementation of the K-3 only allows you to enter one country.  I can't figure out how to fill this out separately for EACH of the countries.  (Do we have to pretend that we got 12 separate K-1s, one for each country, and try to allocate all of the data among the foreign countries?  Seems like an awful headache, and recipe for error.)  I'm somewhat inclined to file on paper, which would let me work around this, BUT my state requires electronic filing, so not really viable.  

Would be useful to know whether TT is planning to address this, which would allow me to file for an extension and then wait to see what happens.

[ewoldde]

I can only tell you what  I did to get thru and file my taxes.

My 'K-3 Information' from the PTP  had only 2 countries, but the K-3 Wks in TT provided only 1 selection, so I entered one country along with as much of the data as I could (including section 1.59a data).  Then I looked for the forms that were created and found the K-1 Add'l Info Wks at Box 16 showed a link to a Form 1116 and some other worksheets.  (Note, also, there is a Quick-Link button but I did not try it.).  On the Foreign Tax Wks I found I could enter data for up to three countries.  You will probably have to create 3 more copies of Form 1116 to cover the 12 countries you have--either that Quick-Link button or some other way to add a new form.

Finally, by K-3 Information included section 1.59a data, which is marked with an asterisk on the K-3 Wks in TT.  The K-3 instructions from IRS.gov indicated this flows to Form 8991.  But when I downloaded that form & instructions from IRS and started trying to enter the numbers, I found that Line 1g says that if your 4-year average receipts are less  that $500,000 stop and don't complete the rest of the form.  That  left me out so I ignored that data.

When I completed my e-filing (despite a state program bug that I reported last year that is still not fixed), I noted that no K-3 form was generated by TT, if you have other K-3 data besides foreign taxes (Form 1116) and section 1.59a data (Form 8991), you may have other problems.

[Fiberglass72]

Is there any update on @ewoldde's questions?  I have the same problem.

I have a K-3 PDF that the limited partnership provided with their tax package.  If I could upload that via TurboTax, my problem would be solved.

The IRS "Availability Date" of March 20, 2022, for the K-3 form has long passed.

Is there an expected date for an update to TurboTax that will allow attaching a PDF version of the Form 1065 K-3 form?

[SweetieJean]

Schedules K-2 and K-3 e-file capability postponed for S corporations - Journal of Accountancy

[ewoldde]

This does not seem  to have anything to do with the 1065 K3.

[47acre94]

I'm using TT (Home and Business) in September and it appears that they have added a note to the bottom of the K-1 input form for box 16 (Schedule K-3) that states "You must enter separate K-1 worksheets if you have more than one type of foreign deduction in columns (b), (c), (d), and/or (e). I believe your nightmare is coming true... Hopefully TT will fix this next year. I don't have this issue personally, but I can see how this would be a nightmare. I presume all the other boxes would be zero and you would only enter this box 16 information repeatedly for each foreign country, but I don't know that for fact. 

[fplischke]

instructions for k3?

[patrissimo]

I have a Schedule K-3 from my partnership tax documents. How do I enter it into TurboTax desktop? I only get the K-3 worksheet which, as the OP says, looks nothing at all like an actual K-3. I have absolutely no idea how to proceed.

The worksheet says "See Tax Help on how to make entries below from a Schedule K-3" - great, sounds like exactly what I need - but where is that help? All I see is an article that says to use the worksheet.