2022 tax filing with K-1 Part III Box 16 checked and K-3 (US source income only)

Forum|Forum|3 years ago
March 17, 2023
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I am filing my 2022 return. I am a partner in a LLC. I received my K-1 and it includes a K-3. The only income is qualified dividend from US domestic source. Income is shown in Part II Line(s) 24 and 55 in Column A (US Source). The latest update of TurboTax Premier does not seem to allow for US Source in its selections or Column A entries. It seems to require a foreign country to be entered and the pulldown list does not have United States and a selection. I talked to PWC partner and he informed me that the IRS allowed for a pass on the K-3 in the prior year, but they are required for tax year 2022. The prior discussions and Q/A responses related to this appear to be related to the prior tax year. I would appreciate any guidance that would allow me to complete the K-1 and K-3 sections in TurboTax without having a faulty filing submitted to the IRS.

Best answer by AliciaP1

If the only country you have listed is the US or if columns b, c, d, and/or e are empty, you do not need the Schedule K-3 entered on your return. The partnership must have 1 or more partners that require it to complete the Schedule but the information does not apply to you. You can simply uncheck the Box 16 in your K-1 entry to TurboTax and proceed to enter the rest of your information.

AliciaP1Answer

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17999

I assume you meant, "simply uncheck Box 14" (Schedule K-3 is attached if checked)

BrittanyS

Correct, if you do not need to report a K-3 because there is no foreign income received, you uncheck the box (Schedule K-3 is attached if checked).

@17999

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Mike9241

US Sourced income for US citizens does get reported so there is no k-3 filing. that's why TurboTax does not want column A info. with no foreign sourced income there should be nothing the other coulns and d line 21 of the k-1 should be blank.

here's part of a transmittal letter from a PTP.

The Partnership will report items of international tax relevance to our partners on Schedule K-3. All of our income is effectively
connected with a United States trade or business. A limited number of unitholders (primarily foreign unitholders, unitholders
computing a foreign tax credit on their tax return and certain corporate and/or partnership unitholders) may need the detailed
information disclosed on Schedule K-3 for their specific reporting requirements. We do not expect to report either (1) any foreign
income taxes paid or accrued on Schedule K-1, Line 21 or (2) any foreign-derived intangible income.

my experience with some tax partners is they shouldn't be allowed to even wash dishes. they're a partner because they brought in sufficient business. worked with one in a medium sized firm. his lack of tax knowledge almost got a client charged with tax evasion. and there was the Arthur Anderson scandal.