This experience has been forwarded to our tech support for further investigation. However, other experts believe that US sourced income should not be reported on Schedule K-3. We are waiting for confirmation, but this is unlikely to be resolved before the filing deadline.
However, there is a work-around that should pass SmartCheck.
- Check the box for Box 16 and confirm that the box is checked.
- For the question "...enter foreign country for which you are reporting foreign taxes paid or accrued," choose "Not Applicable" (this is the default selection).
- In the grids for income/expenses, enter only the amount for Column G (Total). Because all other columns are empty, the default is that the income was US-sourced.