The US Treasury Department and the IRS, on April 30, released early release drafts of redesigned schedules K-2 and K-3 for forms 1065, 1120-S, and 8865 for tax year 2021.
The schedules are intended to better help partners and shareholders calculate their US income tax liability in regards to matters of international tax relevance, including claiming credits and deductions, the IRS said in a statement.
The drafts of the schedules preview the changes before final versions are released.
The release of an early draft of the instructions for the schedules is planned mid-year.
The updated forms will also give guidance to partnerships, S corporations, and US persons who are required to file Form 8865 with respect to controlled foreign partnerships on how to provide international tax information. The updated forms will apply to any persons required to file form 1065, 1120-S, or 8865, the IRS said, but only if the entity for which the form is being filed has matters of international tax relevance. Usually, foreign activities or foreign partners are concerned.
The changes do not apply to partnerships and S corporations with no items of international tax relevance.
Previous drafts of schedules K-2 and K-3 for form 1065 were released in July 2020, and input was sought then. Changes were made to the schedules and instructions resulting from helpful comments that were submitted following the release, the IRS said.
The Treasury Department and the IRS plan to provide certain penalty relief for the 2021 tax year in future guidance to promote compliance with the adoption of schedules K-2 and K-3 by affected pass-through entities and their partners and shareholders, the IRS said.
Be the first to comment