Starting in tax year 2021 the IRS updated the Schedule K-1 to include Schedule K-2 and Schedule K-3 to show International Transactions. This K-2 replaces the inputs prior tax years. See Generating the Schedules K-2 and K-3 in Lacerte for information on completing these new Schedules.
Follow these steps to enter foreign taxes for Schedule K, line 16f:
- Go to Screen 27, Other Schedule K Items.
- Scroll down to the Items Affecting Shareholder Basis section.
- Enter the amount of Foreign taxes paid or accrued.
The S corporation must complete Schedule K-2, Parts II and III. See How to generate the K-2 and K-3 in Lacerte for instructions.
To enter transactions for tax year 2020 and prior returns:
- Go to Screen 27, Other Schedule K Items.
- Locate the Foreign Transactions section.
- Select the Foreign country from the drop down menu. (Schedule K, line 14a)
- Complete all applicable information:
- Gross income from all sources (Schedule K, line 14b)
- Gross income sourced at shareholder level (Schedule K, line 14c)
- Foreign Gross Income Sources at Corporate Level subsection (Schedule K, line 14d-14f)
- Deductions Allocated & Apportioned at Shareholder Level subsection (Schedule K, line 14g-14h)
- Deductions Allocated & Apportioned at Corporate Level subsection (Schedule K, line 14i-14k)
- Foreign taxes paid (Schedule K, line 14l)
View the results on the Schedule K, Line 14a-q.
Verify the allocations to each shareholder on the Schedule K-1, box 14.
Note: The Lacerte program only allows input for one foreign country. If the S Corporation had income from, or paid or accrued taxes to, more than one country or U.S. possession, a statement is required to be attached. In order to correctly file the return, enter the aggregate amounts of all foreign transactions in Screen 27, Other Schedule K Items with the country as Various Then manually create separate statements for the Schedule K (use Screen 39,Notes) and each Schedule K-1 (use Screen 34,Supplemental Info. (per S/H)).
