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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Preparer

Date & Time
  • event Date

    Tuesday, September 26, 2023

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

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

$197.00
CPE
ALL

This course will discuss the required Schedules K-2 and K-3 for reporting partners' income, deductions, and credits from foreign activity. Our panel of highly experienced tax specialists will explain each part of each schedule so that tax practitioners can efficiently meet this reporting obligation and review the latest requirements concerning which entities are required to file the new schedules.

Faculty

Andre Benayoun
Managing Director
CBIZ

Mr. Benayoun is a Managing Director who specializes in consulting around international taxation for inbound and outbound multinational corporations, S corporations, partnerships, and individuals and families. He has more than 10 years of business consulting experience in international taxation with Big Four firms. Mr. Benayoun's experience includes consulting around international tax reform issues from the Tax Cuts and Jobs Act as well as structuring mergers and acquisitions as well as liquidations. He has worked extensively with clients on repatriation planning; foreign-derived intangible income (FDII) planning; treaty analysis; and foreign currency issues; and U.S. CFC and anti-deferral regimes, such as Subpart F/§956/GILTI. Mr. Benayoun is well versed tax provision work (FIN 48/FAS 109), OFL/ODL analysis, debt vs. equity analysis, FTC limitation analysis and planning, tax efficient debt financing, Permanent Establishment (“PE”) risk assessment, entity rationalization planning, and inbound work including ECI, FDAP income, withholding, treaty analysis (e.g., LOB Article, PE Article, etc.), and branch profits tax issues.

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Alison N. Dougherty
Managing Member
Googolplex Tax, LLC

Ms. Dougherty provides U.S. tax reporting, compliance, consulting, planning, and structuring solutions to U.S. and foreign corporations, partnerships, LLCs, individuals, and trusts. She specializes in U.S. international tax reporting and compliance with the preparation and review of the U.S. federal Forms 5471, 926, 8992, 8993, 5472, 8865, 8858, 8621, 8804, 8805, Schedules K-2 and K-3, 1116, 1118, 1042, 1042-T, 1042-S, 8832, 8833, 2555, 3520, 3520-A, 5713, 1120-F, 1040-NR, 8288, 8288-A, 8288-B, 8233, 8840, 8843, 8854, 8938, and FBAR. Ms. Dougherty has extensive experience working with U.S. businesses and individuals with outbound activities in foreign countries. She has also worked with foreign companies and nonresident individuals with inbound activities in the United States. Ms. Dougherty has significant experience with U.S. nonresident withholding tax, foreign partnership withholding tax, and FIRPTA withholding tax. She has managed U.S. tax compliance and advisory client engagements for U.S. C corporations, S corporations, partnerships, LLCs, U.S. individuals, U.S. trusts, foreign corporations, foreign partnerships, foreign LLCs, nonresident individuals, and foreign  trusts. 





Ms. Dougherty is a CPA and a tax attorney with more than 15 years of combined experience in public accounting, the practice of law, and corporate industry. She was previously a tax partner in a large regional public accounting firm in the Washington, DC area. Ms. Dougherty has served clients in various industries including technology, U.S. government contracting, commercial services, telecommunications, real estate, investment partnerships, commodities, high net worth individuals, and family offices. She has also served as a technical resource to other CPAs, accountants, tax professionals, public accounting firms, attorneys, and law firms.  

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Description

Designed before the 2017 Tax Act, the current Schedule K-1 has only one line for reporting all foreign transactions. This requires practitioners to attach narratives and supplemental schedules explaining foreign reportable items that partners must interpret and report on their individual income tax returns. The IRS must manually review these same attachments.

The lack of consistency in reporting foreign items creates confusion for all. For partnerships, Schedules K-2 and K-3 were to compensate. Schedule K-2 is similar to the current Schedule K, and Schedule K-3 is similar to the current Schedule K-1, but both include foreign reportable items.

Schedule K-2 now has 11 parts, while Schedule K-3 has 13. These parts contain the partnership's share of current international transactions, foreign tax credit limitation information, IRC Section 250 deduction for FDII, GILTI inclusions, and other essential information needed to properly report foreign income, credits, and deductions on partners' returns. These schedules will also allow the IRS to easily match the same items to the individual partners' individual income tax returns. For this reason, international tax practitioners must understand how to complete these new mandated schedules correctly.

Perhaps the greatest complexity with Schedules K-2 and K-3 is determining which partnerships are required to file the new schedules. The IRS has purportedly eased filing requirements including offering penalty relief for taxpayers who make a good faith effort to comply (IRS Notice 2021-19). However, even under the latest guidance tax practitioners are required to provide Schedules K-2 and K-3 when requested by any partner or shareholder.

Listen as our panel of international tax experts explains how to complete Schedules K-2 and K-3, including advice on preparing for this reporting obligation.

Outline

  1. Background
  2. Who is required to file Forms K-2 and K-3?
  3. Current year updates to Schedules K-2 and K-3
  4. Schedule K-2
  5. Schedule K-3
  6. Best practices

Benefits

The panel will review these and other key issues:

  • Preparing additional required attachments for specified international transactions in Part I
  • Current year updates to Schedules K-2 and K-3
  • Which partnerships are required to include Schedules K-2 and K-3 in returns?
  • Complexities in reporting funds and private equity investments on Schedules K-2 and K-3
  • Correctly reporting CFC income and GILTI inclusions in Part V
  • How foreign tax credits and income are recorded on the new schedules

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Understand the reporting requirements for Schedules K-2 and K-3
  • Identify the partnership audit changes made in the Bipartisan Budget Act of 2015
  • Determine which partnerships are required to include Schedules K-2 and K-3 in returns
  • Ascertain the steps needed to prepare for reporting international activity on Schedules K-2 and K-3
  • Verify that Schedules K-2 and K-3 are correctly completed
  • Recognize the penalties applicable for filing noncompliance

  • 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).