My K-1 has box 16 checked saying K-3 is attached, but the support package states it will be available before 8/31/2022.

[poncho_mike]

I own a couple of MLPs that report information on a K-1.  This year there is a box 16 that states whether form K-3 is attached.  None of the MLPs include the K-3, and instructions state it will be provided before Aug 31.   I live in NC, and Turbotax is asking for information from a form D-403 NC K-1.  None of the companies provided this information in the support package.  Does that mean none of the companies did business in NC?  Or do I need to go to the partnerships and request more information?

[Mike9241]

the IRS has waived k-3 reporting for 2021. the problem comes about if that k-3 reports foreign tax credits. there really isn't a way to claim those credits without the form. however, in many cases, there will be no FTC. your options are to file by 4/18/2022 and amend if there is FTC or file an extension and wait for the partnership to provide the k-3 info. To file now uncheck the k-3 box on the Turbotax k-1 form

most info will transfer from entering the federal k-1.

if there was NC reporting it would have been included with the K-1 package probably on a page for state tax information. most of the time this info is only needed to file non-resident returns.

the NC D-403 k-1 is only needed for adjusyement to federal income and NC credits. since nothing was reported with your k-1's unchecking the  k-3 box on the federal should get rid of the need to filing out the nC form

[poncho_mike]

@Mike9241

Thanks for the reply.  I expect one of the MLPs will report foreign taxes for Canada.

Since this information only affects foreign tax paid, am I correct in assuming that the amount of tax owned will be the worst case maximum if I uncheck box 16?  It appears I am currently getting a small refund, and I am OK with filing an extension but I want to make sure my taxes don't go up as a result of this information.

[AliciaP1]

If you did not receive the K-3 with your K-1, you can uncheck Box  16 and e-file although you may have to file an amendment when you do receive your K-3.  If you do not wish to file an amendment, you will need to file an extension and then file your return when you receive your K-3.

If you received your K-3 and have entered the information, you will need to print and mail your full return in.  When you have completed your return, TurboTax will prompt you to print your return after you have paid your fees.

K-3 information is not available for e-file yet 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

@poncho_mike

[poncho_mike]

@Mike9241 , @nexchap 

I'm a little confused on my K-1s.  I keep getting an error that says " Box 20 Code Z has been selected but no Section 199A income has been entered on Statement A".

There is another thread on this error, and the suggestions have been to leave the box blank on Code Z and enter the values somewhere else, or removing the Code Z altogether.

First off, what is Statement A?  Is that the page where it asks "Any Qualified Business Income (QBI) carryovers?  If so, what value goes here?

Theer is also a second screen where it asks "We need some information about your 199A Income?  Is that for QBI?  What do I do at this screen?

[AliciaP1]

Section 199A income is QBI.  You should have received a Statement A - QBI Pass-through Entity with your K-1.  If you did not receive the statement specifically you will have received some sort of statement that shows QBI (or Statement A or Section 199S) showing QBI Ordinary business income (loss), Rental income (loss), Royalty income(loss), and other reportable items for the QBI Deduction.

To correct your error you need to leave the amount box blank when you enter the description for Box 20 on your K-1 and enter the information from that Statement into the "Wee need some information about your 199A income" screen.  Mark each box for the line you have amounts on your statement and enter the amount as shown (negative numbers on the statement should be negative in TurboTax).

@poncho_mike

[poncho_mike]

I'm a little confused here.  I own a rental house.  I was told a couple of years ago the only way for the profit from that to be considered QBI was for me to spend 250 hours a year on it.  I thought passive investments didn't qualify for QBI at all.  

[AliciaP1]

The QBI is afforded to the business, not the investor.  If you have a passive interest in a business with QBI, then you have passive QBI from that business.  If you enter your K-1s as reported TurboTax will determine the correct treatment of any income or losses reported.

@poncho_mike