TurboTax says Schedule K-3 will be available in a future release. When will that be?

[DawnC]

Not at this time.   If your K-1 does report foreign activities, you are required to include Schedule K-3.   You have the option to uncheck the box, e-file now, and amend your return later.   Or you can file an extension and check back later in the year to see if Schedule K-3 is available to e-file.  Please note that the issuance of a K2/K3 is not a Turbo Tax issue, it is a IRS issue.   According to the IRS, these are the release dates for these forms, based on type of Business Entity.   Even after the IRS form is released, it must be integrated into the software which will take additional time.  

Schedules K-2 and K-3 Frequently Asked Questions

@raybeyond 

[raybeyond]

How can you tell if you have foreign activities on K1 form?  Thanks! @DawnC 

[MarilynG]

Examples of items of international relevance that must now be reported on Schedules K-2 and K-3 (as opposed to on Schedules K and K-1) include:

• Foreign tax credit–related information including the sourcing and basketing of income and deductions, including information related to items such as R&E expenses and interest expense.
• Interests in foreign entities or distributions from foreign corporations.
• Foreign partner's U.S.-source income and/or U.S. effectively connected income, including the distributive share of deemed sale items on the transfer of a partnership interest.

From the IRS:

"For 2021, eligible passthrough entities with no foreign activities or foreign partners/shareholders and without knowledge of partner or shareholder need for information on items of international relevance will not have to file the new schedules." 

Click this link for more detailed info on Forms K-2 and K-3.

[raybeyond]

I have “A” and “AG” on box 20 and no values on box 21 on my Schedule K1.  Are those foreign activities?  Thanks @MarilynG 

[AliciaP1]

It looks like you have a K-1 Form 1065.  If this is true, code A is Investment Income and code AG is reporting the partnerships aggregated gross receipts.  if the supplemental information that came with your K-1 does not indicate either of these represent foreign income or that the aggregation includes a foreign entity, then you are exempt from filing K-3 in 2021.  

@raybeyond

[raybeyond]

Here is the supplement info with my K1. Am I exempt filing K3 for 2021? Please advise.  Thanks @AliciaP1 

[AliciaP1]

Yes, because your Qualified Dividends and Net Capital Gain are both $0 for Foreign Sourced activities.

@raybeyond

[raybeyond]

Thanks @AliciaP1 .  I see $7 for Qualified Dividends from Foreign Source - Passive.  Did I look at the wrong place?  Please advise.

[marjoriect]

To me it appears that Form 1065 Schedule K-3 would be issued by the partnership as an attachment to Form 1065 or possibly Schedule K-1.   The partner filing his own return would copy the information from the K-3 into Turbo Tax.  The information would come from the partnership.

Since none of my investment partnerships have included Schedule K-3, but all have checked box 16 form K-1, I don't know what it is best to do.   

My inclination is to uncheck box 16, knowing full well that at least one partnership likely paid foreign taxes.  Or I may just file an extension and file in October.  

Any other ideas?

[MarilynG]

Agree with your conclusions.  Since you didn't receive K-3 info with your return, I would be inclined to uncheck Box 16 and file, and Amend later if received.   Or, extend as you suggested.

The perception is is that the preparers are also having issues preparing K-3's, so you may not receive one for 2021.  The IRS realizes this also. 

Click this link for interesting details on Form K-3.

@marjoriect

[Fiberglass72]

I am required to file a 1065 K-3 but I have a K-3 PDF that the limited partnership provided with their tax package.  If I could upload that via TurboTax, my problem would be solved.

The IRS "Availability Date" of March 20, 2022, for the K-3 form has long passed.

Is there an expected date for an update to TurboTax that will allow attaching a PDF version of the Form 1065 K-3 form?

[David723]

Would you know when TurboTax will update its software to include the K-3 form?  I have to wait until 8/31/22 for my partnership to publish its K-3 forms and then I can file an amended return to include the K-3 form from TurboTax. 

[Critter-3]

Seems like you are not required to file this form for 2021 per an IRS announcement.  This information was provided by one of our Experts @MinhT1

Most forms K-2 and K-3 forms do not need to be filed this year.

The IRS announced on Tuesday February 15, 2022 that most K2/K3 reporting for 2021 can be delayed until the 2022 tax return filing.

This is an extract of the IRS announcement:

The IRS intends to provide certain additional transition relief for this year from the Schedule K-2 and K-3 reporting for certain domestic partnerships and S corporations with no foreign activities, foreign partners or shareholders, and without knowledge of partner or shareholder need for information on items of international relevance. For 2021, these qualifying domestic partnerships and S corporations will not have to file the new schedules. We are taking this step in response to feedback we received from the tax community and our stakeholders.  The IRS will provide full details of this relief soon.

Use this link for additional information:  IRS Provides Further Guidance on K-2 and K-3 Relief

[David723]

Thanks for your input. I do have foreign income and will need to amend my return this fall. I’m aware of all the IRS statements. Just curious if anyone knows when TT will have the K-3 incorporated into the software for e-filing or printing an amended return. 

[mikeyates9]

From what I can see, the K-3 implementation is rotten with bugs.  TT says K-3 Part II Section 2 line 54 is the sum of lines 39 to 43, but the IRS form says it's the sum of 25-43.