K-2 and K-3 questionnaire

[ILLMAS]

Does anyone one have a questionnaire to give to clients to see if they meet the requirements to file K-2 and K-3's?

Thanks

 

[Lion EA]

Compass Tax FREE on-demand course by Tom Gorczynski includes sample letters.

Marc Dombrowski also presented something on this issue, but I can't find it now.

[Lion EA]

Email me and I'll attach the one I'm using for you. (Too large, it tells me, to upload here. And, it loses its formatting if I just copy the text.) If I can find the other one which is shorter, I'll include that, too. RitaLewis @DollarsSense.com

[Lion EA]

FOUND THE OTHER VERSION I HAD FROM ANOTHER CLASS. DON'T KNOW IF THIS WAS MARC'S.

Schedules K-2 and K-3 Client Statement

Owner Name:-----------------------------------------------Owner SSN:

Partnership Name:__________________________ Partnership FEIN:

The IRS has instituted 2 new form requirements (K-2 and K-3) comprising 39 pages of disclosures that could double or even triple your company’s tax preparation fee. These forms are not required if your partnership or S-corporation has no foreign activities and if the individual partners or shareholders are exempt from filing IRS Form 1116 (Foreign Tax Credit) with their 2021 individual Form 1040.

I you do not acknowledge that you are exempt from filing Form 1116 with your 2021 Form 1040, we are required to complete these new forms and your fee will increase dramatically. IRS Notice 2021-39 allows us to rely on a good faith safe harbor of your statement that you do not personally have to file IRS Form 1116 with your 2021 individual Federal income tax form. If you are not required to file Form 1113 with your 2021 individual Federal income tax return, please sign below. Please reproduce and have all other owners individually sign as well in order to avoid our required filing of Schedule K-2 and K-3.

“I confirm that I am not personally subject to filing Form 1116 (Foreign Tax Credit) with my 2021 individual Federal income tax return Form 1040.”

Signature of above individual:___________________

[Lion EA]

Tom's class is about 15 minutes with two of them discussing the Forms K-2 and K-3. Then, when the most recent Notice came out, he/they did a 10 minute update. Look for the links at the Compass site: https://on-demand.compasstaxeducators.com/

[jklcpa]

I'm curious if you would still require the partners to sign this at the partnership level if you also prepare all of the partners' individual returns.

[Lion EA]

I asked for them all. I have only 4 partnerships and S-corps and prepare the personal returns for 2 of those businesses that are H/W only and work closely with the personal preparer for a single owner S-corp and know the H/W for the 4th, but don't prepare their personal returns. I did NOT have the 2021 personal information for any of the individuals when I began the biz returns. I knew at least 3 out of the 4 businesses (suspect all 4) had owners with foreign taxes paid in 2020 &/or 2019, but not over $600; but did not know their 2021 personal situations at the time I needed to start the biz returns. I gave the double-letter forms from Compass Tax Educators (biz version plus individual version) to each biz and asked them to survey their owners (themselves) and touched base with individual preparers for those where we work as a team. All 4 businesses returned signed letters from the biz and from each partner or shareholder. I did begin the biz returns prior to the most recent notice. Don't know how I'll feel next year. But this year I wanted to cover my butt, and those businesses, owners, and personal preparers, too.

[Lion EA]

I have NOT taken this instructor's classes, but for anyone frantically trying to get 1065s and 1120Ss out the door in the next 11 days...

Expanded from 1 to 2 Hours.  March 8, 2022 - 3PM ET
Live 2-hour Webinar:

Schedules K-2 and K-3
Knock 2021 Form 1065 Out of Orbit

How to Prepare (or Not) K-2 and K-3 for 99% of Clients

Presenter:  Bradley Burnett, J.D., L.L.M.

https://accountantsaccelerator.com/schedules-k2-k3-cpe-course/

NASBA
Sandra L. Leyva, Inc. is registered with the National Association of the State Boards of Accountancy (NASBA) as a sponsor of continuing education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit.  Our NASBA sponsor number is 112525.