Schedule K-2 is a new 14-page form with 8 total parts. It is filed as part of your Form 8865, Foreign Partnership Return, within your individual tax return. It is basically an expansion of the Form 8865 Schedule K to provide greater detail on items of international tax relevance from the operation of the partnership. The Schedule K-2 may also include certain international informational forms, such as Forms 5471, 926, 8621, and 8992. Many of these forms have a $10,000 penalty for failure to file.
Schedule K-3 is a new 15-page form with 8 total parts. Like Schedules K-1, Schedules K-3 are filed along with your Form 8865 and are provided to certain partners to provide information on those partners’ shares of pass-through items from the foreign partnership. In this case, they provide details on the partners’ share of international items reported on Schedule K-2. They also provide the pass-through data needed for any international informational forms (such as Forms 5471, 926, 8621, and 8992) that must be filed as part of each partner’s Form 1040, Individual Income Tax Return.
