Understanding Forms K-2 and K-3

Author: Allison McLeod

Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2028 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card

Schedules K-2 and K-3 for reporting partners' income, deductions, and credits from foreign activity are now required for passthrough returns (Form 1065, 1120-S and 8858). This requirement starts with returns with a tax year that ends in 2021. This course will discuss each part of these schedules and explain these new reporting obligations in detail.

Publication Date: December 2025

Designed For
This course is suitable for Corporate tax and finance executives, directors, managers and staff, CPAs, Enrolled Agents, accountants, attorneys and business/financial advisors who work with and advise individuals or businesses. All in-house and public practice professionals involved with tax compliance and who want up-to-date information on partnership and S corporation taxation.

Topics Covered

• Overview
• Transition Relief
• 2023 Changes to the K-2/K-3 Instructions
• Domestic Filing Exception (DFE)
• 2024 Changes to the DFE
• Observations
• Other Issues
• IRS Frequently Asked Questions
• Changes to the Corporate Transparency Act (CTA)
• Additional Partnership Updates

Learning Objectives

• State the purpose of Schedule K-2 and Schedule K-3
• Identify the components of each form and the areas which will need to be completed
• Identify the new forms that affect partnerships and S Corporations
• State when they must be filed
• Determine which taxpayers need to complete these forms
• Identify the month and year the IRS initially released draft versions of Schedules K-2 and K-3

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None