For an overview of Schedules K-2 and K-3 in the S corporation return, see here.
Part IV of Schedules K-2 and K-3 is used to report the information the shareholder needs to determine if a distribution from the foreign corporation is to be treated as a dividend or whether to exclude the distribution from income due to it being attributable to the corporation's previously taxed earnings and profits (PTEP). This part also is used to report the amount of foreign currency gain or loss on the PTEP that the shareholder is required to recognize under IRC section 986(c) and report on their Form 1040.
To enter the Part IV information for Schedules K-2 and K-3 in TaxSlayer Pro, from the Main Menu of the S corp return (Form 1120-S) select;
- Schedule K
- Foreign Transactions (K-2)
- Part IV Distributions from Foreign Corporations to Corporation - Click New.
- Distributing Foreign Corporation Name - Enter the name of the foreign corporation
- EIN or
Reference ID Number - Enter the foreign corporation's EIN or alphanumeric reference ID number. - Date of Distribution - Enter the date on which the distribution was made. (It will print in the format YYYYMMDD.)
- Functional Currency of Distributing Foreign Corporation - Enter the applicable three-character code for the foreign corporation’s functional currency using the ISO 4217 standard.
- Amount of Distribution in Functional Currency - This represents the partnership's share of the amount distributed in functional currency.
- Amount of E&P Distribution in Functional Currency - This represents the partnership's share of the amount of E&P distributed in functional currency.
- Spot Rate (Functional Currency to U.S. Dollars) - Enter the exchange rate on the date of distribution used to translate the amount of the distribution in functional currency to U.S. dollars.
- Amount of Distribution in U.S. Dollars - Enter the amount of the distribution in U.S. dollars.
- Amount of E&P Distribution in U.S. Dollars - Enter the amount of E&P distributed in U.S. dollars.
- Qualified Foreign Corporation - Check this box if the distributing foreign corporation is a qualified foreign corporation, determined without regard to section 1(h)(11)(C)(iii)(I).
Additional Information: