Schedule K-1 (form 1065) & Schedule K-3

Forum|Forum|3 years ago
March 13, 2023
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I already filed my 2022 tax, then I received a Schedule K-1 (form 1065). Box 16 indicated that Schedule K-3 is attached if checked but I didn’t receive K-3 form.

1/ I want to file an Amend Tax Return to include the Schedule K-1 form this week but I don’t have the K-3 form. What should I do? Can I answer ‘No’ to ‘Is your Box 16 checked?’ If so, will it show an error in IRS when they compare the K-1 form? Do I have to file another Amend Tax Return when I receive form K-3?

2/ What is the deadline to amend Tax Return for 2022? When is the deadline for business to send out form K-3? Will Turbo Tax support Schedule K-3?

3/ Schedule K-1 form: box 13 Other Deductions, code = W, amt = $280. When TT ask me about code W. I don’t know which one to answer. It’s NOT: Early Withdrawal Penalty, Taxes and State Income Tax Withheld. Other details are: Investment Interest Expense, Misc Itemized Deductions, Nonpassive Deductions to be Reported on Sch E, Section 754 Depreciation, I have Another Description Item. Where do I find out the information?

Thank you so much!

Best answer by AliciaP1

No, I do not advise you to file the return without the K-3 information unless you are certain it will be blank. The Foreign Taxes paid or accrued box being empty does not guarantee the K-3 will be blank. If you received a letter with wording resembling what Mike9241 posted, then you could be confident it would be blank.

The Domestic Partner/Foreign Partner refers to your relationship with the partnership, so since you are both based in the US you are a Domestic Partner.

If you have not filed the return and do not have key indicators to file your return without the K-3 I recommend filing for an extension and completing your return when you receive it. If you have already filed, you should wait until you receive the K-3 and then amend your return. As Mike9241 posted you have until 4/15/26 to amend your 2022 returns.

Box 13 code W from a natural gas partnership should actually be classified as Investment Interest Expense (per the IRS instructions for Form 1065 Schedule K-1).

@bmwermuth

@prettyspring

M

Mike9241

Level 15

assuming this is a publicly traded (PTP) or master limited (MLP) partnership traded on a stock exchange the cover letter may contain language like the following. "The Partnership will report items of international tax relevance to our partners on Schedule K-3. All of our income is effectively connected with a United States trade or business. A limited number of unitholders (primarily foreign unitholders, unitholders computing a foreign tax credit on their tax return and certain corporate and/or partnership unitholders) may need the detailed information disclosed on Schedule K-3 for their specific reporting requirements. We do not expect to report either (1) any foreign income taxes paid or accrued on Schedule K-1, Line 21 or (2) any foreign-derived intangible income. in other words if you are a US citizen, there will be nothing to report if line 21 does not have an amount so you don't check box 16 on the Turbiotax k-1. if there is an amount on line 21 you can uncheck box 16 to amend and be able to e-file but then you'll have to leave line 21 blank and amend a second time to get the foreign tax credit if you want it.

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as for when to file an amended return you must wait until the original is fully processed then if it will result in a refund you have until 4/15/2026 to file. if you owe there is no deadline to file but filing after 4/18/2023 will result in penalties and interest for late payment.

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look in box 20 or any supplemental schedule for an explanation of 13W - only the partnership can tell you what it's for

P

prettyspringAuthor

Level 4

Hi Mike9241,
The Partnership is ‘UNL 2022 United States 12 Month Natural Gas Fund LP’.
1/ My Schedule K-1:
box H1 Domestic Partner is checked and Foreign Partner = blank
box 5 Interest Income = 95
box 6a Ordinary Dividends = 768
box 11, code = C (Sec. 1256 contracts and straddles) and amt = a loss
box 21 Foreign Taxes paid or accrued = blank
I am a US citizen.
My 2022 Income Tax has not been processed yet and the result is a refund. I called the Partnership and was told that Schedule K-3 will be available by the end of June 2023. When I tried to enter my K-1 in TT as a test, the result is also a refund. If I file an Amend Tax Return in July 2023 to include both K-1 and K-3, I should be OK, right?
2/ Box 13: code = W (Other Deductions), amt = $280.
Box 20: code A (Investment Income), amt = $863. The Rep at UNL told me that box 13 is the deduction that Partnership UNL can pass to the investor. Should I select ‘Miscellaneous Itemized Deductions’?

Thank you so much for your help!

P