Reporting foreign tax paid on Form 1065.

After entering your K-1 information, since the Estate paid foreign taxes, be sure to go through the foreign tax credit section of TurboTax:

1. Click on Federal Taxes > Deductions & Credits.
2. In the Estimates and Other Taxes Paid section, click on the Start/Revisit box next to Foreign Taxes.  
3. On the Foreign Tax Credit screen, click Yes.
4. When you come to the screen, Do You Want the Deduction or the Credit?  you can select either, but it is usually more beneficial to take the credit. 

If the Foreign Income was from interest or dividends, you can enter it as if you had a 1099-Div or 1099-Int (the amounts will then transfer to the Foreign Tax Credit section).

Or, just enter the total Foreign passive income in the FTC section when you are reporting Foreign Tax paid. 

Click this link for more info on Claiming the Foreign Tax Credit.

Thank you for your detailed answer.  It sounds as though you are telling me how to claim the foreign tax in TurboTax for Form1040 (individuals).  My question stated that the problem arose when using TurboTax Business to file form 1065 (partnership).   This was not a K-1 from an estate.   My problem is that TurboTax Business does not include Forms K-2 and K-3, necessary for reporting all the foreign tax data needed for partners to claim the credit on their Form 1040.   I have resolved this dilemma through information received directly from the IRS.   (Are you sure you were answering my question; perhaps it was actually that of some one else.)

You are correct; I was giving info on how to enter K-1 in a personal return.

The latest info I could find for K-2 and K-3 is:

"If you are required to file forms K-2 and/or K-3 they must still be filed, but cannot be e-filed at this time.

Per the IRS:

Schedules K-2 and K-3 will be available for MeF/XML filing in the following time frames.  If you electronically file your return before the time frames, submit the schedules as separate PDF files attached to the return.   Taxpayers will also be able to file their Schedules K-2 and K-3 via PDF attachments for the entire 2022 filing season.

Form 1065, Schedules K-2 and K-3             March 20, 2022

Form 1120-S, Schedules K-2 and K-3          Mid-June 2022

Form 8865, Schedules K-2 and K-3              January 2023"

Yes, I found that same message from the IRS.  What I have not found, however, is the address to which to send the PDF files, which apparently both 1065 and 1040 filers will need.  Do you have any information on this?

Sorry, I misread your reply.  What I learned from the IRS was that if you filed electronically you had to send the pdf files separately.  I have already filed the 1065.  Should I send the pdfs separately, and if so, where?  Or should I file the 1065 electronically as an amended return with the pdf files attached?  

Is TT going to tell the 1040 filers how to handle this new wrinkle?

Thanks for your help.

Per Expert @MinhT1:

"Most forms K-2 and K-3 forms do not need to be filed this year.

The IRS announced on Tuesday February 15, 2022 that most K2/K3 reporting for 2021 can be delayed until the 2022 tax return filing.

This is an extract of the IRS announcement:

The IRS intends to provide certain additional transition relief for this year from the Schedule K-2 and K-3 reporting for certain domestic partnerships and S corporations with no foreign activities, foreign partners or shareholders, and without knowledge of partner or shareholder need for information on items of international relevance. For 2021, these qualifying domestic partnerships and S corporations will not have to file the new schedules. We are taking this step in response to feedback we received from the tax community and our stakeholders.  The IRS will provide full details of this relief soon."

Here's a link with IRS K-2 and K-3 FAQs. 

On Form 1065, which part of the K-2 and K-3 (of the parts I through XII) is used to report foreign tax paid?  There are twelve parts on the K-2.  The foreign tax was paid on ordinary dividends where the tax was withheld by the brokerage account.

@jg31  Part III, section 4 of the 1065 K-2 is where foreign taxes paid are reported on the 1065.

Thank you for that information.  Is Part II of the K-2, the Foreign Tax Credit Limitation, not needed with Part III? 

Why is the foreign tax paid reported on K-2 Part III section 4 not transferring to member K-1's line 21?  

Only a portion is.  Is the foreign tax paid limited on the partnership level?

Thank you

Where do I enter the foreign tax paid on Form 1065?