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Persons With Respect to Certain Foreign Partnerships. Income Tax Return for an S Corporation and S corporations filing Form 1120-S, U.S.

The forms consist of specific Schedules K- 2 and K- 3 for: With the Schedules K- 2 and K- 3, the information is now being required in a standardized format with an additional level of detail. Although these forms contain a new level of detail, most of this information was already required to be included with previous Schedules K- 1 as white paper attachments. income tax liability when considering potential international- related deductions, credits, and miscellaneous items. The new forms will create more clarity for shareholders and partners on how to calculate their U.S. Recognizing that the detailed new schedules will create transitional challenges, the IRS announced in Notice 2021- 39 that it will provide certain penalty relief to filers who fall short of the new requirements in tax years that begin in 2021, so long as they make a good- faith effort to comply, as discussed below. The new international- related schedules will be required to be filed with 2021 partnership/S corporation returns and 2021 Schedules K- 1, Partner's Share of Income, Deductions, Credits, etc. Draft instructions for the new Schedules K- 2 and K- 3 were released on June 30, 2021. Schedule K- 2 will report the partnership/S corporation-level activity attached to a flowthrough return, while Schedule K- 3 will be provided to each partner or shareholder and report its proportionate amount for each item. Similar schedules have been released for S corporation returns, too.