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Schedule K-3 from a partnership

S Corporations should enter the Schedule K-3 data in the
K3
 screens in the
K1 1065, 1041
 input screen folder. UltraTax/1120 includes the data entered in the
K3
 screens in the Schedule K-2.
C Corporations should enter the Schedule K-3 data in the
1118
 and
1118-2
 screens in the
K1 1065, 1041
 input screen folder. The following is a guide for entering data from the Schedule K-3 to the
1118
 and
1118-2
 screens.

Schedule K-3 (Form 1065) Part II. Foreign Tax Credit Limitation

Column (a) U.S. Source
  • Don't report amounts in this column on Form 1118 unless you elect to resource such income under a U.S. income tax treaty.
Column (f) Sourced by shareholder
  • Determine the source and separate category of the income reported in this column.
Section 1, Gross Income Lines 1 through 20
Form 1118, Schedule A, requires a corporation to separately report certain types of gross income by source and separate category. Schedule K-3, Part II, lines 1 through 20, generally follow the separately reported types of gross income on Schedule A.
Section 1 - Gross Income
Form 1118, Schedule A
Line 1. Sales
Column 7. Sales
Line 2. Gross income from performance of services
Column 8. Gross Income From Performance of Services
Lines 3, 4, and 10. Rental income, royalties, and license fees
Column 6. Gross Rents, Royalties, and License Fees
Line 5. Guaranteed payments
Column 11. Other
Line 6. Interest income
Column 5. Interest
Lines 7 and 8. Ordinary dividends and qualified dividends
Column 4. Dividends
Lines 11 through 15. Capital gains
Column 11. Other
Line 16. Section 986(c) gain
Column 9. Currency Gain
Line 17. Section 987 gain
Column 9. Currency Gain
Line 18. Section 988 gain
Column 9. Currency Gain
Line 19. Section 951(a) inclusions
Column 3(a). Inclusion Under Sections 951(a)(1) and 951A - Exclude Gross-Up
Line 20. Other income
Column 11. Other
Section 2, Deductions Lines 25 through 54
Form 1118, Schedule A, requires a corporation to separately report certain types of deductions and losses by source and separate category.
Section 2 - Deductions
Form 1118, Schedule A
Line 25. Expenses allocable to sales income
Column 13(f). Expenses Allocable to Sales Income
Line 26. Expenses allocable to gross income from performance of services
Column 13(g). Expenses Allocable to Gross Income From Performance of Services
Lines 27 through 30. Capital losses
Column 13(j). Other Allocable Deductions or Form 1118, Schedule H, Part II, column (c)
Lines 31, 37 and 44 through 45. Other deduction
Column 13(j). Other Allocable Deductions or Form 1118, Schedule H, Part II, column (c)
Lines 33 and 35. Allocable rental, royalty, and licensing expenses
Column 13(d). Depreciation, Depletion, and Amortization
Lines 34 and 36. Allocable rental, royalty, and licensing expenses
Column 13(e). Other Allocable Expenses
Line 38. Charitable contributions
Not reported on Form 1118. Charitable contributions are allocable to U.S. source income
Line 45. Foreign taxes deductible, but not creditable
Not reported on Form 1118. You may claim a deduction for foreign taxes deductible.
Line 46. Section 986(c) loss
Column 13(h). Currency Loss or Form 1118, Schedule H, Part II, column (c)
Line 47. Section 987 loss
Column 13(h). Currency Loss or Form 1118, Schedule H, Part II, column (c)
Line 48. Section 988 loss
Column 13(h). Currency Loss or Form 1118, Schedule H, Part II, column (c)
Line 49. Other allocable deductions
Column 13(j). Other Allocable Deductions

Schedule K-3 (Form 1065) Part III. Other Information for Preparation of Form 1116 or 1118

Section 4, Foreign Taxes
This section reports your share of the foreign taxes paid or accrued by the partnership by separate category and source.
Section 1 - Foreign Taxes
Form 1118, Schedule B
Line 1.
Part I Foreign Taxes Paid, Accrued, and Deemed Paid
Line 2.
Part II, line 3 Reductions of taxes paid, accrued, or deemed paid

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