At the time of this blog post, the IRS was still making changes to its approach to Schedules K-2 and K-3 in response to push-back from tax professionals and other parties. In particular, the American Institute of Certified Public Accountants (AICPA) and other organizations [...]
If your prior-year Schedules K-1 mentioned foreign items in lines 16 and 20c (1065) or lines 14 and 17d (1120-S), or in the accompanying statements, you should receive a Schedule K-3 for 2021. If you do not receive a 2021 Schedule K-3, then you [...]
You should expect to receive a Schedule K-3 this year with organized, detailed information on the items formerly covered in Schedule K-1 (1065), lines 16 and 20c, or Schedule K-1 (1120-S), lines 14 and 17d, and the accompanying statements. Schedule K-3 will provide details [...]
In most cases, yes. However, if you must file Form 8865 to report your ownership in a foreign partnership, then you may need to paper file your 2021 individual income tax returns. The IRS has announced that Form 8865 will not be available for [...]
We don’t advise this. You must sign your tax return under penalties of perjury to attest that the return is complete and accurate to the best of your knowledge. Signing under false pretenses constitutes fraud and can subject you to penalties and prison time. [...]
Probably not. The IRS’s FAQs on Schedules K-2 and K-3, released in mid-February 2022, clarified that many partnerships and S corporations, including those that do not have foreign assets or operations, may need to file the new forms: “In many instances, a partnership or [...]
The timing of your Schedules K-1 (and K-3, if applicable) will depend on how quickly your partnership or S corporation can finalize its business returns and issue you the Schedules K-1 and K-3. Right now, these forms are somewhat of a moving target. As [...]
Maybe, but don’t count on it. Be prepared to file an extension. The IRS has already informed partnerships and S corporations that any of their returns with Schedules K-2 and K-3 will likely need to be filed on extension. This means it’s unlikely that [...]
You will likely see two main differences this year: More detailed information will be provided to you for the preparation of your individual income tax filings. Your K-1s (and K-3s, if applicable) may arrive later this year. This may delay your individual tax filings. [...]
Formerly, Schedule K (on the business tax return) and Schedule K-1 (issued to you) did not require any specific format to provide international information. As a result, many details needed for the accurate preparation of your individual income tax returns were either lumped together [...]
