On April 30, 2021 we posted Draft Schedules K-2 And K-3 Released To Enhance Reporting Of International Tax Matters By Pass-Through Entities where we discussed that the Treasury and the IRS released on April 30, 2021 updated early drafts of new Schedules K-2 and K-3 for Forms 1065, 1120-S, and 8865 for tax year 2021 (filing season 2022). The schedules are designed to provide greater clarity for partners and shareholders on how to compute their U.S. income tax liability with respect to items of international tax relevance, including claiming deductions and credits.
Schedule K-2 is an extension of Schedule K of Form 1065 and is used to report items of international tax relevance from the operation of a partnership. Schedule K-3 is an extension of Schedule K-1 (Form 1065) and is generally used to report to partners their share of the items reported on Schedule K-2.
The FAQ Now Includes Eight New Question-And-Answers, Including Whether Two Parts Of The New Schedules Must Be Completed For Dormant Foreign Corporations.
The FAQ also includes information on whether a filer who qualifies for an exception to a requirement to file Forms 5471, 8865 or 8858 must still do so because of the instructions for the new schedules.
Read more at: Tax Times blog