Tax Year 2022

1. Go to Shareholders > Schedule K-2 - Distributive Share Items - International Parts I-IV worksheet. 
2. Expand Section 1 - Schedule K-2 General Information and Part I.
3. In Line 5 - Print a blank page 1 Schedule K-2/K-3 when no other input for the Schedule K-2 exists, select the checkbox. 
   • Interview Form Schedule K-2 > KF-1, Box 34.
4. Calculate the return.

Note

• When using the above input, or the below input, development has added efile diagnostics 62423 and 62424 to prevent electronic filing because the IRS has added e-File Business rules F1120S-273 and SK1-F1120S-005 with release 2022.03010, March 19th, 2023.

Tax Year 2021

2021 Tax Software does not have 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 - Schedule K-3 print code option, select Yes or No.
   • (Interview Form K-2, boxes 30-60 and 180-186)
8. Calculate the return.

Note

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