Can a K3 be ignored if the K1 box 21 (foreign taxes) is blank?

Forum|Forum|3 years ago
March 18, 2023
2 replies
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I have received my K1, and for the first time, a K3. It seems that the K3 can be ignored if the K1 shows no foreign taxes being paid or accrued (K1, box 21 is blank). So, can I just uncheck the K3 box in TurboTax and proceed with the K1? Thanks!

MAK70

Yes if there is no reportable information you can uncheck the K3 box so that you can file your tax return.

Jasmith63

but MaryK4 why won’t TT explicitly say this/fix this instead of making us come to the comments to find it buried in a reply. many of us have wasted day/weeks (and some, money, to consult an independent tax professional after paying for TT)..

LindaS5247

If you have no other foreign income or foreign tax credits to report on your return you do not have to include the K-3. Keep it with your tax records.

Otherwise, you will have to enter your Form K-3.

To enter, switch to "Forms Mode", Type "K-3" in the box (top left). You will see this:

Click "Next" and you will see this:

Click "Finish" and you will see this:

Depending which version of TurboTax you have you can also try this to enter the K-3:

Open the Schedule K-1 Worksheet.
Scroll down to the Foreign Transactions line: For partners, this is line 16. For shareholders, this is line 14.
Check the Schedule K-3 is attached if checked box.
Enter the Name of Country or U.S. Possession.
Complete lines B through AI based on the K-3 received.

If this does not help please feel free to come back to TurboTax Community with additional questions or click here for information on Turbo Tax Support. You can connect with a Live TurboTax Agent and share your screen.

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LindaS5247

Last year, for 2021, the IRS did not require K-3's to be reported as it was a new requirement, and they granted relief for 2021 only, in guidance provided January 18, 2022 for the 2021 tax year only. This was done after filing season started, so it created a lot of confusion for last years tax returns and that is what you are seeing in the 2022 posts in Community.

"The instructions and the January 18, 2022 updates provide certain exceptions to completing Schedules K-2 and K-3. For example:

As stated in the instructions, the partnership need not complete Schedules K-2 and K-3, Parts II and III if it knows that it has no direct or indirect partners eligible to claim a foreign tax credit. A similar exception applies with respect to S corporations." This applied to 2021 only.

What my post said was that "if you do not have any foreign income or foreign tax credits to report on your tax return" you do not need to include Schedule K-3. This is one of the IRS exceptions.

If there is no reportable information, you can uncheck the K3 box so that you can file your tax return.

The Form K-3 was developed for the purposes of international reporting requirements which used to be part of a K-1. So, if you don't have anything of an international nature to report, just leave it alone. See HERE #2 for more detail.

I also suggested that you "contact TurboTax Support for additional help". They have the ability to share your screen and help guide you through the entries. We do not have that ability here in Community.

"If this does not help please feel free to come back to TurboTax Community with additional questions or click here for information on Turbo Tax Support. You can connect with a Live TurboTax Agent and share your screen."

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"