How do I prepare Schedule K-2 and K-3(s) to print as blank with page 1 Item C, lines 1-7 as No, in an 1120S return in CCH Axcess™ Tax and CCH® ProSystem fx® Tax?

  • Article Type:
  • How To
  • Last Modified:
  • 03/08/2022

Objectives

Prepare both Schedule K-2 and all Schedule K-3(s) when not required.

Environment

  • CCH ProSystem fx Tax
  • CCH Axcess
  • CCH Axcess Tax
  • 1120S
  • Schedule K-2
  • Schedule K-3

Procedure

There is not currently a 'one-stop' option to generate both the Sch K-2 and the K-3(s) when the passthrough does not have to report any "items of international relevance." 

As a workaround, we can prepare a relatively blank K-2 and K-3s by making a Schedule K-2, Part II, Section 1 - Income, Row Code input with a zero in U.S. Source.
  1. Go to Shareholders > Schedule K-2 - Distributive Share Items - International Parts I-IV worksheet.
  2. Expand Section 2 - Schedule K-2 Part II Section 1 Income.
  3. Select Detail (Interview Form Schedule K-2 > KF-2, boxes 30, 32, and 33).
  4. In Line 1 - Row code, select F4 Lookup value and choose an option from the list.
    • The selection is arbitrary as the input will not flow anywhere, but we can even select Reserved options 9 and 22-24.
  5. In Line 5 - Country Code, select OC.
  6. In Line 6 - U.S. Source, input a zero.
  7. Calculate the return.

Note

  • This method selects Yes to the first two boxes of K-2, page 1, item C and prepares Schedule K-2, pages 1-5, so to complete parts 1, 2 and 3.
Input is available designed to force prepare only the Schedule K-3 for all partners or specific partners:
  1. Go to General > Return Options worksheet.
  2. Expand Section 1 - Processing Options.
  3. In Line 16 (Interview Form 2, box 67) - Code to produce the Schedule K-3, select F4 Lookup Value and choose from the following two options:
    1. Produce for all shareholders (Default).
    2. Produce for only selected shareholders.
  4. Go to Shareholders > Shareholder Information worksheet (or if selecting to 'produce for all shareholders,' then skip to step 8).
  5. Select Detail.
  6. Expand Section 2 - Options.
  7. In Line 6 (Interview Form K-2, boxes 30-60 and 180-186) - Schedule K-3 print code option, select Yes or No.
  8. Calculate the return.

Note

  • Schedule K-2 will not be prepared using this method.

Additional Information

  • The development team is considering enhancement request KL22108L to add a single input to prepare blank Sch K-2 and K-3(s) even when not required.
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