K-1 with K-3 Box Checked

[HJJ1]

I have a MLP K-1 with box 16 checked indicating a Schedule K-3 is attached.  The K-1 indicates the K-3 will not be available until June. Do I need to file an extension and wait until the K-3 is available in June to file my taxes?

[DavidD66 · Accepted solution]

Filing an extension is one option.  Another would be to go ahead and file your tax return, and then when you receive Form K-3 determine if you need to file an amended return.  There is a good possibility that the K-3 won't report anything that requires you to file an amended return.   

[Mike9241]

did you read all of the transmittal letter that came with the K-1

maybe something like this

Beginning in tax year 2021, the Partnership will report items of international tax relevance to our partners on new Schedule K-3. As we disclose in our quarterly distribution press releases, all of our income is effectively connected with a United States trade or business. However, a limited number of unitholders (primarily foreign unitholders, unitholders computing a foreign tax credit on their tax return and certain corporate and/or partnership unitholders) may need the detailed information disclosed on Schedule K-3 for their specific reporting requirements. 

so unless you fall into one of these categories

primarily foreign unitholders, unitholders computing a foreign tax credit (there's an amount on line 21)of the K-1)  and certain corporate and/or partnership unitholders you'll be wasting your time waiting for the k-3 because there will be nothing to report. 

[HJJ1]

Thank you.  I don’t anticipate having additional items to report, but I obviously want to make sure I’m doing things correctly!

[AtIas]

Hey there, thank you for sharing your knowledge on the forums. I have the same situation as the original poster and none of my K-1s have anything reported in Box 21. However, I am claiming a $33 foreign tax credit on my return for foreign taxes that I paid on dividends paid to me by foreign stocks. Do I need to wait for the K-3s? 

Thank you in advance

[DaveF1006]

No, you do not need a k-3. You would report the dividends as income in your return under investment income>1099 DIV. once you prepare your 1099 DIV entry, there is a check box that says my form has more info than are just in these boxes. Once you check the box, your form will expand and you will record the foreign tax paid in Box 7 of the form.

[AtIas]

Thanks, you rock! This answers my question. I should add that on my all of K-1s box 16 is checked saying that K-3s are attached but I haven't received them yet and there is nothing in Box 21 for any of the K-1s. The 1099-Div part is easy, but my concern was that those foreign dividends or that foreign tax credit would cause me to be required to report the K-3s. 

[brandonpadraig]

If I choose to file now and wait to determine after recieving the K3 if I need to file an ammendment;

 do I leave box 16 on the K1 blank; 

or, do I answer that it is checked, but not fill out the following questions from turbo tax about the K3?

[PatriciaV]

Your best option is to not check Box 16 at all. Otherwise, TurboTax will ask you to complete the K-3 entries. Also, the IRS will consider the return to be incomplete.

@brandonpadraig