Starting this year, there will be more reporting for flow through entities that have foreign partners or foreign tax items. New schedules have been added to assist the IRS in analyzing the foreign tax issues of these entities. Form K-1 is the traditional tax reporting paperwork for shareholders and partners. The new additional Forms K-2 and K-3 will be included in the tax packages for foreign partners/shareholders and the tax packages of partners/shareholders of firms that have foreign income or other foreign tax items.
If this all seems foreign to you, you may need to seek advice. If we can assist you with the new K-2 and K-3 contact us.