Preparing Schedules K-2 and K-3: New Domestic Filing Exception, 2022 Revisions, Reporting Foreign Activity

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Tuesday, January 31, 2023

Recorded event now available

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Course Materials

This course will discuss required Schedules K-2 and K-3 for reporting partners' income, deductions, and credits from foreign activity. Our panel of highly experienced tax specialists will explain each part of each schedule so that tax practitioners can efficiently meet this reporting obligation and they will review the latest requirements concerning which entities are required to file these schedules.

Description

Now that practitioners have struggled through the initial preparation of Schedules K-2 and K-3, the IRS recently released instructions for the 2022 schedules which, thankfully, include many changes. First and foremost is an exception to completing Schedules K-2 and K-3 for certain domestic entities. To qualify, a partnership must have no or limited foreign activity, its partners must be U.S. citizens or resident aliens, the partnership must timely notify partners that they will not receive Schedule K-3, and no partner can request Schedule K-3 up to one month before the filing deadline--February 15th is the deadline for 2023.

The updated instructions clarify when research and experimental expense apportionment needs to be reported and add a new country code XX. Many other revisions have been made that hopefully will ease tax practitioners' reporting burden.

Listen as our panel of international tax experts explains how to complete Schedules K-2 and K-3, including the latest revisions made to these schedules.

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Outline

  1. Background
  2. Who is required to file Forms K-2 and K-3?
  3. Recent revisions to Schedule K-2 and K-3
  4. Schedule K-2: Parts I-IX
  5. Schedule K-3: Parts I-X
  6. Best practices

Benefits

The panel will review these and other key issues:

  • Preparing additional required attachments for specified international transactions in Part I
  • Which partnerships are eligible for the domestic entity filing exception?
  • Which partnerships are required to include Schedules K-2 and K-3 in returns?
  • Complexities in reporting funds and private equity investments on Schedules K-2 and K-3
  • Correctly reporting CFC income and GILTI inclusions in Part V
  • How foreign tax credits and income are recorded on the new schedules

Faculty

Dougherty, Alison
Alison N. Dougherty, CPA

Managing Member
Googolplex Tax Services

Ms. Dougherty provides U.S. tax reporting, compliance, consulting, planning, and structuring solutions to U.S. and...  |  Read More

Samtoy, John
John Samtoy

Tax Partner
Holthouse Carlin & Van Trigt

Mr. Samtoy’s practice specializes in international tax compliance and consulting services, with a focus on...  |  Read More

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