Complex Issues With Schedule K-2 and K-3 Reporting: Tiered Partnerships, GILTI HTE, FDII

Now that practitioners have handled the initial reporting of the new Schedules K-2 and K-3, questions have arisen as to how to properly report the most complex aspects of the new forms. Although the requirements to report these complexities have always been in place, it is probable that in years past, these requirements were not fully met on the attached notes included by practitioners.

Aside from the necessary burden of including voluminous information to simply report foreign taxes withheld on interest and dividends, lower-tiered partnerships must report information to upper-tiered partnerships. Deduction eligible income (DEI), qualified business asset investment (QBAI), FDII, and GILTI must be reported in the recently added Section of Part IV of Schedule K-2.

Failure to properly report the required information can trigger penalties of up to $10,000 per entity. Fortunately, the IRS has anticipated the difficulties of the new reporting requirements and has provided transition relief for oversights meeting specific guidelines. International tax practitioners need to thoroughly understand the complex reporting requirements of these recently added schedules.

Listen as our panel of international tax reporting experts walks you through reporting examples of foreign reporting requirements on Schedules K-2 and K-3.

1. Complex K-2 and K-3 reporting
2. Reporting challenges
   1. PFIC information for qualified electing funds
   2. Dual-consolidated losses
   3. FDII
   4. GILTI and GILTI high-tax exclusion
   5. Tiered partnerships
   6. Section 863(b) sales and treaty sourcing
   7. Other
3. Other reporting matters
   1. Interaction with BBA
   2. Electronic filing requirements
   3. Other

The panel will cover these and other critical issues:

• Reporting the GILTI HTE on Schedule K-2
• Tiered partnership reporting on new Schedule K-3 and K-2
• How the Section 250 FDII deduction is reported on Schedule K-2
• Simplifying reporting of foreign tax withholding on interest and dividends

Learning Objectives

After completing this course, you will be able to:

• Identify significant reporting challenges practitioners face with Schedule K-2 and K-3 reporting requirements
• Determine how the Section 250 deduction is reported
• Decide how the GILTI HTE is reported on Schedule K-2
• Ascertain recent changes made to schedules K-2 and K-3

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of international taxation including residency determination, foreign entity classifications, application of treaty benefits, as well as GILTI, Subpart F, and the related Section 250 deductions.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).