Good Day. My questions apply to my 2021 tax returns.
I’ve recently received the K-3 that supplements my K-1 for a MLP I’ve invested in. I have extensions for my returns in place and have filled completed my Federal and state returns ~ well almost ~ answering all the questions asked about the K-1 and since Box-16 was checked, I answered all the questions TurboTax asked me. I go thru the review the following error keeps appearing:
Sch K-1 Wks-Partnership (SUN) -- Sch K-1 Additional Info 1: Foreign interest expense allocated at the partnership level is listed but no foreign source of income at the individual level has been listed on the Additional Information worksheet Line 1. A careful review of the K-3 shows no sources in income of taxes however TurboTax won’t let me proceed till I answer it.
Also since my K-1 has fields Box 1 and Box 2 of Part III filled in, TurboTax is asking for the City and State of the real estate. I addressed the info on Box 1 as one K-1 and Box 2 as a separate K-1. This method was successful on my 2020 return and these questions did not appear. I don’t know how to address this question.
Any assistance would be greatly appreciated.
this is from k-3 instruction from a publically traded partnership
In addition, a limited number of unitholders (primarily foreign unitholders as well as certain corporate and/or partnership unitholders) may
need the detailed information disclosed on Schedule K-3 for their specific reporting requirements. The IRS has recently provided
additional Schedule K-3 guidance, and we will continue to monitor any future changes impacting our partners. Accordingly, the Schedule
we encourage you to review the information contained on this form when available and refer to the appropriate federal laws and
guidance or consult with your tax advisor.
the other situations where entering the k-3 data and completing form 8865 foreign partnership return for US taxpayer may be required
1) there was pass through foreign tax credit (which would show on line 21 of k-1). but the foreign partnership reporting form 8865 is generally for those with a 10% or more interest in a foreign partnership (
2) for US taxpayers generally having more than a 10% interest in a foreign partnership and no FTC
note that the k-3 is 20 pages. TurboTax does not prepare 8865 and I would suspect that taxpayers that have a foreign partnership reporting would not be using Turbotax
turbotax only allows for input of items A-R and many of these items go nowhere.
about the only time completing the k-3 would be required
if there is a pass-thru ftc then the following lines on the k-3 would need to be entered A, C,I, J, P and Q. then there would be supplemental FTC info that would need to be provided to link the FTC data to the 1116