Will TT let me file my return and will the government accept it without my Schedule K-3?

[alj]

Like many people I have a Schedule K-1 with box 16 checked indicating a Schedule K-3 is attached even though the Schedule K-3 won't be available until summer of 2022. I have several questions regarding this.
Does the fact there is a K-3 indicate there were definitely foreign taxes paid?
Will TT file it  with the missing K-3 and error  message?
Will the government accept it with the missing K-3?
Should I tell TT the box is not checked to avoid the error message?

[DaveF1006]

Yes, what I recommend is filing the tax return and not claim the Foreign Tax Credit by not checking box16. Once the K3 is available, then amend the original return by checking Box 16 indicating the K3 is attached.

[alj]

Thanks. Does the fact that there is a K-3 mean there was definitely foreign tax paid or can there be other reasons for the K-3 other than foreign tax paid?

[DaveF1006]

The K3's report how varieties of foreign income transactions is distributed as well how to figure the foreign tax credit from information on the K3. It was designed to replace, supplement, and clarify reporting of certain amounts formerly reported on Form 1065, Schedule K, line 20c, Other items and amounts, and Schedule K-1, Part III, line 20, Other information.

The new schedules assist partnerships in providing partners with the information necessary for the partners to complete their returns with respect to the international tax provisions of the Internal Revenue Code.

For example, the new Schedule K-3 provides information necessary for corporate and individual partners to figure their foreign tax credit on Form 1116, Foreign Tax Credit. 

Please read these IRS instructions for reporting the K3 information. This will give you great appreciation of the hard work that entity level faces when preparing the K1's.  Also look in Part 1 of the K3 for a list of your partnership share on the variety of items listed and checked.

@alj 

[EtHashem333]

Hi Dave,

Does this advice apply to the 2022 tax year as well? 

Thank you!

[DaveF1006]

 To clarify, are you asking if the K-3 information should be reported now or should you wait? If so, you may report this now since it is available in Turbo Tax. Have you received a K-3 yet from the partnership or S-Corp?

@EtHashem333 

[EtHashem333]

No. I received a schedule k-1 for the 2022 year and am still waiting for its corresponding k-3. Is it okay to file without the K-3 this year and add it to my filed taxes for 2023?

[DaveF1006]

No. If you haven't received your K-3, you can file electronically now then amend your return when you receive your K1. You cannot report this in 2023. You will need to amend your 2022 return.

You might wish to check with the Partnership or S-Corp to see if you receive this before April 18 before filing but if you wish to file now, then you can amend when you receive your K-3.

@EtHashem333 

[Robert 61]

Should form 8275 (Disclosure) be attached to our return informing the IRS that an amended return will be filed once the K-3 is received in order to prevent fines?

[DaveF1006]

No, it is not necessary to inform the IRS of your intention to file an amended return for any reason. Form 8275 is used if you are taking a position that is contrary to a treasury regulation and you are disclosing your reasons for taking the position. 

A K-3 omission in the return does not fall under this disclosure requirement bccause you intend to file once you receive the K-3.

@Robert 61 

[Robert 61]

Wouldn't be form 8275R you are referring to?

[HopeS]

The K-1 and K-3 from 2022 should be included in your personal 2022 tax return. Otherwise, you will need to amend your 2022 return to include these forms.

@EtHashem333

[GrantS1]

Hello, I am having the exact same issue when filing my 2022 tax return. I never received my K-3. After calling the partnership they told me I wouldn't expect to see my K-3 until June of 2023. Won't the IRS penalize me for amending my 2022 returns? If I am penalized, what are the most likely penalties? What do you recommend? 

[Robert 61]

I believe the IRS will allow an amended return once you receive the K-3. I sent in Form 8082, Notice of Inconsistent Treatment with my return so they are aware you are waiting for the K-3 and to avoid any penalties as per the instructions on the IRS 8082 form.

[MAW51]

Hi,

Same problem with no K-3 when K-1 states it is  attached. Is there a problem with filing a 6 month automatic extension and then file the return when the K-3(s) arrive (supposedly early to mid summer)?  If you decide the file the return now with Form 8082 does that delay IRS processing the return especially if you are going to get a refund