I must admit that I'm partial for these new schedules because they do contain information that was technically required for F.1116 but were previously not available. Even if the partnership or S-corp has no foreign partners, no foreign source income, no assets generating foreign-source income, and no foreign taxes paid or accrued, information from column (a) U.S. source would still be needed for the preparation of and computation on F.1116.  Nevertheless, for a majority of the domestic taxpayers who may only have small amounts of foreign-source income and foreign tax from investments/PTE's, this would really be an overkill.

In ProConnect Tax and Lacerte, there is a checkbox for "Compute U.S. source gross income and deduction (if no foreign activity)", which would then prompt the system to prepare K-2 and K-3 without allocation to foreign countries.  Sounds like ProSeries has a similar feature too except it's not currently working.

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@Love2Cruise wrote:

"Beginning in the tax year 2021, the Partnership is required to report items of international tax relevance on Schedule K-3. This new schedule provides information for the partners to complete their tax return with respect to the international tax provisions. The Schedule K-3 is provided for all partners; however, only 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 information reported on the Schedule K-3."

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@Terry53029 wrote:

One reason items other than income should be reported on it. as far as what country in the dropdown box, the first line is "not applicable" which I assume to mean only US income, but when you click on it, the box just stays blank which Intuit needs to fix. Maybe @Anonymous can look into this for us.

 

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