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Schedule K-3

About Entering Foreign Tax Information Reported on Schedule K-3

Beginning in 2021, many partnerships and S-Corporations began to provide Schedule K-3 (Partner’s or Shareholder’s Share of Income, Deductions, Credits, etc.-International) to their owners.
With respect to the information necessary to determine the foreign tax credit, the layout for the partnership and S-Corporation entry pages in ONESOURCE Trust Tax is similar to the layout of the Schedule K-3. No material changes were made to the foreign tax information on the Trust/Estate entry page.
Information included on Schedule K-3 that is not related to foreign taxes must be entered elsewhere in ONESOURCE Trust Tax. For example, if a 1065 Schedule K-3 includes information in Part VII regarding Passive Foreign Investment Companies (PFICs), then that information must be entered on the Form 8621 PFIC/QEF Summary page. To access this page from the account binder, select
Additional Information and Tax Forms
 then
Form 8621 - Return of a PFIC/QEF
.
Much of the information reported on Schedule K-3 with respect to foreign taxes is either unnecessary for completion of Form 1116 or is not currently used in ONESOURCE Trust Tax computations.
Enter all amounts as positive values unless indicated otherwise in the document.
Typically, you will need to enter only the following information:
  • Part II (Foreign Tax Credit Limitation), Section 1 - Gross Income
     - Add a row for each country or line item being reported.
    • Total gross income (line 24)
    • Qualified dividends (line 8 if present)
  • Amounts are reported in the four income categories (Foreign Branch, Passive, General or Other).
  • Part II (Foreign Tax Credit Limitation), Section 2 - Deductions
     - As necessary, enter information in the fields for lines 25 through 38 and 40 through 50 in the fields provided.
  • Amounts are reported in the four income categories (Foreign Branch, Passive, General, Other).
  • Part III (Other Information for Preparation of Form 1116 or 1118), Section 4 - Foreign Taxes (or Section 3 for an 1120-S Schedule K-3), line 1
     - Add a row for each country being reported.
    • Foreign tax paid is reported in the Foreign column.
  • Amounts are reported in the Foreign column of the appropriate income category.

This article applies to:

  • PRODUCT: ONESOURCE Trust Tax