Form 1065 K-2

[jg31]

In Turbo Tax Business 2025 i need to complete the formK-2 for foreign tax income and taxes paid on dividends.  After completeing, the K-3 is not generating for the individual partners.  How do I get the

1) K-3 to generate and

2) report the foregin tax paid for each partner

so that form 1116 can be completed

[DaveF1006]

It depends. TurboTax Business 2025 won’t create Schedule K-3 unless certain activations are met within the K-2 workflow. This situation comes up often: you fill out the K-2, but TurboTax doesn’t flag any “reportable foreign items” for the partners, so it leaves out the K-3. Here’s how to make sure K-3 is generated and each partner’s foreign tax appears on Form 1116, if a K-3 is needed. 

TurboTax Business only produces K‑3 when all of the following are true:

 A. You have foreign gross income entered in K‑2 Part II, Section 1:

1. Foreign tax alone is not enough. TurboTax requires foreign-source income to be entered, even if it’s just passive dividends from mutual funds/ETFs. 
2. Enter the foreign dividends in Part II, Section 1.
3. Use RIC as the country if the dividends came from mutual funds (TurboTax supports RIC as a “country”).

B. You have foreign taxes paid entered in Column F of Part II

This is where you enter the foreign tax withheld on dividends.

C. You have Part III completed (Partner allocation section)

TurboTax will not generate K‑3 unless the partner‑level allocations exist in Part III.

 D. You have not checked the Domestic Filing Exception

If TurboTax thinks you qualify for the domestic filing exception, it suppresses K‑3. Make sure this box is unchecked in the K‑2/K‑3 “Applicability” section.

 E. You are in Forms Mode

TurboTax Business often requires manual entry in Forms Mode for K‑2/K‑3 if they weren't captured in the TurboTax interview section.