TurboTax Newly added K-3 has a bug - need fixing

[mjkdad23]

I entered my data manually. I have looked through the forms and can’t figure out where to make the changes. I have put -0- in the foreign income box but it does not accept that. 

[mjkdad23]

Success!!! I went back in today and walked through the K-1 form, confirmed that Box 16 was NOT checked, and made sure there were no boxes of any kind in Box 16 that were checked, or had amounts, including -0- in them.  That seemed to take care of it for me because the Fed Review came back clean this time.  Ironically, the only box that was checked before I went in was claiming any foreign tax paid as a credit on the return.  I didn't need that, so I unchecked it and I am good to go.

Thanks for the suggestion.  

[leewilson4416]

My K-1 has box 16 checked... with only US sourced income reported on the K-3. Here's how I entered the info into Turbo Tax Premier and passed the review without any errors.

* Is box 16 checked on your K-1? [Yes]
* ...enter foreign country for which you are reporting foreign taxes paid or accrued. [(Not Applicable)]
*Enter gross income information. [my K-3 only has info in column A(US source) and G(total), but there is no entry block for A so only entered info for G. Since B-F are left empty it is implied that all of the total(G) is US Sourced.]

I hope this helps someone.

[Raydaboss]

@leewilson4416 

Thank you so much! It made sense now and solved my problem. 

[mikejstein]

Dumb question... My K-1 check box for Foreign Transactions (and a K-3) is box 14, yet this post keeps saying box 16. Did the form change or am I missing something? 

I do have the same issue where I only have US entries... which isn't an option in TurboTax. I'm hearing that I don't check this box 14--assuming the form has changed.

[Raydaboss]

I'm not sure if we are talking about the same thing. The standard K1 box 14 should be ( Self-employment earnings ) and Box 16 is a check box if you have attached a K3 form. 

[rv2]

Hi @PatriciaV  - There is another aspect to this:

I have a Windows desktop version of TT Premier - and in the step-by-step, when I come to the place of entering K-3 Part II, Sec 1, Ln 24 - i.e. the summary line, TT's column name and title do not match for (g) in my received K-3  or the IRS's website form K-3.

TT calls col (g) Foreign Gross Income - Gross Income from all sources, whereas standard IRS (and my partnership) calls it "Total", and the way the partnership has computed the value, it implies that includes Foreign and US Sourced Income.

I am sure you can appreciate the difference in the implications. 
(I just downloaded the latest version of the TT update) . 

Is this a bug? Or should I ignore entering col (g) in TT altogether? Pls advise 

Going further to the next page in the step-by-step (Enter Deduction Information) , the col names do not match for cols (IRS's) F and G. TT refers to both of them as cols F and F.  TT calls the first F Interest Expense while IRS calls it Sourced by Partner; and TT calls the 2nd F as Other, while IRS calls it Total.  Implies something very different, Right?
Unless TT forgot to say that the cols B through E are from Line 54, whereas 1st F is the total of col F in lines 39-43, and 2nd F is from Line 54 col F less the 1stF.  
If my assumption is right, the Language on this page and the Help text leaves a lot to be desired. 

Thanks 

[wolf109]

I have a relevant question. TurboTax is asking to select a Country on line 24 Section 1 Schedule K-3.

How do I enter several countries there? I have 3 lines (A, B, C) with 3 different country codes on my Schedule K-3. All of them report only one type of income (passive category income column (c) ).

Should I simply sum the numbers and select 'not applicable' in the Country selection?

[rv2]

Since you have a summary row in line 24 - you can select Various as the Country. 

[wolf109]

Same issue:

Line 24 Schedule K-3: TT calls column (g) Foreign Gross Income - Gross Income from all sources while my K-3 states (g) Total which in fact includes value from (a) U.S. source.

Should I enter the Total value from my K-3 or Does TT want only Foreign total excluding U.S. source?

@PatriciaV Please help us here

[rv2]

Hey - that's same gripe that I have and posted above! 😎

Gut feel tells me that either it is a bug or the team that does the User Interface is asleep at the wheels and no one checked the product before they pushed it out to you and I. 

Hoping @PatriciaV will get to it and guide us 

[vablanchards]

This is how I did it.  Do a first K-1 and K-3 but only list information for one country and then follow the interview.  For each of the other countries, create a new K-1 that includes the partnership info but no numbers but check box 16.  You will then be prompted for the information about the second country.  Repeat until you have provided information about all of the countries on the K-3.  It sounds like a lot of work, but it really is not--and it correctly generates the Form 1116.  One other tip--ignore the countries for which you paid no taxes.  My K-3, for example listed half a dozen countries for which I paid no tax. The whole point of the exercise is to generate Form 1116 forms to get the foreign tax credit, and you need to pay taxes to get the credit.  

[wolf109]

Yes it sounds like a lot of work creating 20 K-1s to enter 20 countries there. Would've been much easier if TT just allowed to enter multiple Countries on that page.

Also deductions on line 54 are already summarized for all countries, hence creating separate K-1s would require to find and enter deductions for each of the Country from previous lines 25-53.

Selecting 'Various' instead of listing each country sounds like much better option for me in this situation.

[KB-Tx]

@rv2, 

Thanks for the concise description. I'm experiencing the same issues (TT Premier vr 4.4.9 download on MacOS).

I'd add that on the (Enter Deduction Information) screen, not only do the TT column names not match those from the IRS, but the instructions "On your Schedule K-3, go to Part II, Section1, Line 54..." is also incorrect. Line 54 is actually in Part II, Section 2 - Deductions. 

I also observed that printing the return doesn't produce a proper Schedule K-3 document either, not even when selecting "All forms & worksheets". 

What we are clearly seeing is a buggy, incomplete and unreliable TT implementation of the Schedule K-3.

I recognize the IRS only came out with the final form (Schedule K-3, Form 1065) on March 20th, so the  implementation was necessarily rushed. Still, it would be nice if TT would just be honest and admit their software is incomplete and provide clear guidance on when a final fix will be available.

Given the unreliability of the current software, I'm considering two options:

1) Filing for an extension and waiting until TT has this issue fixed properly (?)

2) Printing the TurboTax return as is (with box 16 checked on my K-1) and swapping out any relevant TT K-3 pages with the K-3 provided by my REIT.

The second option is a bit messy and might require an amended return later on. But in my case, all of the K-1 income is US sourced, so their doesn't appear to be any bleed through to other parts of the return.

Good luck.

[dhiman halder]

I have the same question- the descriptions are not clear, does a dash means a minus or is just a separator.