Schedules K-2 and K-3
|
On Thu, Feb 10, 2022 at 9:16 AM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Don't the brokerages have some degree of responsibility to accurately report those incomeitems to the clubs and the IRS through the 1099s?Peter DunkelbergerSumner Stock Selectors Investment ClubOn Thu, Feb 10, 2022 at 8:54 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
As current IRS instructions stand, you are not going to avoid these forms whether or not you have foreign investments, so that, in itself, would not be a reason to sell them.
However, foreign investments can have the potential to bring other problematic tax reporting and accounting issues for clubs. We've seen many times where such stocks have gone through reorganizations or special distributions and have not provided good guidance on the US tax implications of those things. This has led to delays in providing clubs the information they need to get their records correctly updated.
In addition, if your club owns any ETF's with exposure to foreign companies, you may have more difficulties getting the information you need to report that income on your club taxes with the new forms.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeWould the recommendation be to sell any ADRs this year to avoid these forms for next year? Too late to do anything about this for 2021 tax return.Ira,
Good clarification. The instructions are dated Sept. 2021; the form is dated Feb. 2022. Best course is to provide the detail.
Jeri
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ira smilovitz via bivio.com
Sent: Wednesday, February 9, 2022 7:56 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Jeff,
You haven't seen the revised instructions released on Jan 18. They state that partnerships, even those with no foreign activity, must provide the information unless they know for certain that their partners have no other foreign activity that would require an 1116. Penalties for failure to file are the same as those for errors/omissions on Schedule K-1 - $280 per K-2, increased to the greater of $570 or 10% of the items to be reported per K-2 in the case of intentional disregard.
Ira Smilovitz, EA
On Wed, Feb 9, 2022 at 9:58 PM Jeri Morgan via bivio.com <user*16990000001@bivio.com> wrote:
Per IRS instructions for K-2 form: The partnership need not complete this schedule if the partnership does not have items of international tax relevance (typically, international activities or foreign partners). The entire K-2 form is 19 pages long.
Jeri Morgan, Assistant treasurer
Mutual Investment Group of Cheney (WA)
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of cecelia vanderlip via bivio.com
Sent: Wednesday, February 9, 2022 5:26 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Definitely a good idea to write your representatives.
Cecelia
On Feb 9, 2022, at 2:24 PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
The IRS is only doing what Congress directed them to do as part of the 2017 Tax Cuts and Jobs Act. Congress changed the way multinational entities calculate their US tax liability to reduce their ability to eliminate US taxes with excessive foreign tax credits and/or sheltering income offshore. We are just the tiny fish caught in the net.
By all means write to your Representatives in DC and complain. It can be effective. Just this week the IRS announced that it was suspending plans to move to a facial recognition identity verification process if you wanted access to your IRS records.
Ira Smilovitz
On Wed, Feb 9, 2022 at 5:13 PM John Munn via bivio.com <user*223700001@bivio.com> wrote:
Let them choke on their paper.
On Wed, Feb 9, 2022 at 2:28 PM Leonard J Delmolino via bivio.com <user*27879700001@bivio.com> wrote:
I just saw the following posted on the Better Investing
Treasurer's discussion list. Is this true?
The IRS published new draft instructions for schedule K-2
dated
1/31/2022 on their draft forms web page. The new
instructions will
require ALL clubs to include a schedule K-2 and K-3s for
each member
with their form 1065, even if the club had no foreign
income.
ICLUBcentral is making the needed changes to the Federal tax
printer so
these schedules will be included for all clubs. Please
consider waiting
until these changes are implemented to generate your club
Federal tax
return. These schedules are LONG and will add about 220
pages to the
return of a club with 10 members. E-filing becomes an even
better option
now.
|
On Thu, Feb 10, 2022 at 9:51 AM Frank & Diane Wohletz via bivio.com <user*24347200001@bivio.com> wrote:
Does a club with less than 10 members have to file these forms?
On 2/10/2022 8:15 AM, Peter Dunkelberger via bivio.com wrote:
Don't the brokerages have some degree of responsibility to accurately report those incomeitems to the clubs and the IRS through the 1099s?
Peter DunkelbergerSumner Stock Selectors Investment Club
On Thu, Feb 10, 2022 at 8:54 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
As current IRS instructions stand, you are not going to avoid these forms whether or not you have foreign investments, so that, in itself, would not be a reason to sell them.
However, foreign investments can have the potential to bring other problematic tax reporting and accounting issues for clubs. We've seen many times where such stocks have gone through reorganizations or special distributions and have not provided good guidance on the US tax implications of those things. This has led to delays in providing clubs the information they need to get their records correctly updated.
In addition, if your club owns any ETF's with exposure to foreign companies, you may have more difficulties getting the information you need to report that income on your club taxes with the new forms.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
Would the recommendation be to sell any ADRs this year to avoid these forms for next year? Too late to do anything about this for 2021 tax return.
Ira,
Good clarification. The instructions are dated Sept. 2021; the form is dated Feb. 2022. Best course is to provide the detail.
Jeri
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ira smilovitz via bivio.com
Sent: Wednesday, February 9, 2022 7:56 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Jeff,
You haven't seen the revised instructions released on Jan 18. They state that partnerships, even those with no foreign activity, must provide the information unless they know for certain that their partners have no other foreign activity that would require an 1116. Penalties for failure to file are the same as those for errors/omissions on Schedule K-1 - $280 per K-2, increased to the greater of $570 or 10% of the items to be reported per K-2 in the case of intentional disregard.
Ira Smilovitz, EA
On Wed, Feb 9, 2022 at 9:58 PM Jeri Morgan via bivio.com <user*16990000001@bivio.com> wrote:
Per IRS instructions for K-2 form: The partnership need not complete this schedule if the partnership does not have items of international tax relevance (typically, international activities or foreign partners). The entire K-2 form is 19 pages long.
Jeri Morgan, Assistant treasurer
Mutual Investment Group of Cheney (WA)
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of cecelia vanderlip via bivio.com
Sent: Wednesday, February 9, 2022 5:26 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Definitely a good idea to write your representatives.
Cecelia
On Feb 9, 2022, at 2:24 PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
The IRS is only doing what Congress directed them to do as part of the 2017 Tax Cuts and Jobs Act. Congress changed the way multinational entities calculate their US tax liability to reduce their ability to eliminate US taxes with excessive foreign tax credits and/or sheltering income offshore. We are just the tiny fish caught in the net.
By all means write to your Representatives in DC and complain. It can be effective. Just this week the IRS announced that it was suspending plans to move to a facial recognition identity verification process if you wanted access to your IRS records.
Ira Smilovitz
On Wed, Feb 9, 2022 at 5:13 PM John Munn via bivio.com <user*223700001@bivio.com> wrote:
Let them choke on their paper.
On Wed, Feb 9, 2022 at 2:28 PM Leonard J Delmolino via bivio.com <user*27879700001@bivio.com> wrote:
I just saw the following posted on the Better Investing
Treasurer's discussion list. Is this true?
The IRS published new draft instructions for schedule K-2
dated
1/31/2022 on their draft forms web page. The new
instructions will
require ALL clubs to include a schedule K-2 and K-3s for
each member
with their form 1065, even if the club had no foreign
income.
ICLUBcentral is making the needed changes to the Federal tax
printer so
these schedules will be included for all clubs. Please
consider waiting
until these changes are implemented to generate your club
Federal tax
return. These schedules are LONG and will add about 220
pages to the
return of a club with 10 members. E-filing becomes an even
better option
now.
Showing my ignorance, but for what is RIC an abbreviation?
Peter Dunkelberger
On Thu, Feb 10, 2022 at 9:55 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
Unfortunately it doesn't appear so. We've frequently seen disclaimers on 1099's (if they even provided any foreign source information) such as the ones below:
In this case, the RIC's they are referring to are ETF's with foreign investments. This means that for a club to get the information they need on the correct percentage of foreign source income, they need to go to the investor relations page for the ETF and find what information the company has provided there.
Sometimes there is nothing on the 1099 even though the ETF had foreign income. So you're going to need to check the company investor relations pages for all ETF's your club owns.
What you will be looking for is information like this which the Amplify funds have posted for their ETF's BATT and JGLD.
https://amplifyetfs.com/wp-content/uploads/files/Amplify_Tax_Insert_2021.pdf
You'll be able to enter this percentage when you prepare your club taxes.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeOn Thu, Feb 10, 2022 at 9:16 AM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:Don't the brokerages have some degree of responsibility to accurately report those incomeitems to the clubs and the IRS through the 1099s?Peter DunkelbergerSumner Stock Selectors Investment ClubOn Thu, Feb 10, 2022 at 8:54 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
As current IRS instructions stand, you are not going to avoid these forms whether or not you have foreign investments, so that, in itself, would not be a reason to sell them.
However, foreign investments can have the potential to bring other problematic tax reporting and accounting issues for clubs. We've seen many times where such stocks have gone through reorganizations or special distributions and have not provided good guidance on the US tax implications of those things. This has led to delays in providing clubs the information they need to get their records correctly updated.
In addition, if your club owns any ETF's with exposure to foreign companies, you may have more difficulties getting the information you need to report that income on your club taxes with the new forms.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeWould the recommendation be to sell any ADRs this year to avoid these forms for next year? Too late to do anything about this for 2021 tax return.Ira,
Good clarification. The instructions are dated Sept. 2021; the form is dated Feb. 2022. Best course is to provide the detail.
Jeri
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ira smilovitz via bivio.com
Sent: Wednesday, February 9, 2022 7:56 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Jeff,
You haven't seen the revised instructions released on Jan 18. They state that partnerships, even those with no foreign activity, must provide the information unless they know for certain that their partners have no other foreign activity that would require an 1116. Penalties for failure to file are the same as those for errors/omissions on Schedule K-1 - $280 per K-2, increased to the greater of $570 or 10% of the items to be reported per K-2 in the case of intentional disregard.
Ira Smilovitz, EA
On Wed, Feb 9, 2022 at 9:58 PM Jeri Morgan via bivio.com <user*16990000001@bivio.com> wrote:
Per IRS instructions for K-2 form: The partnership need not complete this schedule if the partnership does not have items of international tax relevance (typically, international activities or foreign partners). The entire K-2 form is 19 pages long.
Jeri Morgan, Assistant treasurer
Mutual Investment Group of Cheney (WA)
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of cecelia vanderlip via bivio.com
Sent: Wednesday, February 9, 2022 5:26 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Definitely a good idea to write your representatives.
Cecelia
On Feb 9, 2022, at 2:24 PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
The IRS is only doing what Congress directed them to do as part of the 2017 Tax Cuts and Jobs Act. Congress changed the way multinational entities calculate their US tax liability to reduce their ability to eliminate US taxes with excessive foreign tax credits and/or sheltering income offshore. We are just the tiny fish caught in the net.
By all means write to your Representatives in DC and complain. It can be effective. Just this week the IRS announced that it was suspending plans to move to a facial recognition identity verification process if you wanted access to your IRS records.
Ira Smilovitz
On Wed, Feb 9, 2022 at 5:13 PM John Munn via bivio.com <user*223700001@bivio.com> wrote:
Let them choke on their paper.
On Wed, Feb 9, 2022 at 2:28 PM Leonard J Delmolino via bivio.com <user*27879700001@bivio.com> wrote:
I just saw the following posted on the Better Investing
Treasurer's discussion list. Is this true?
The IRS published new draft instructions for schedule K-2
dated
1/31/2022 on their draft forms web page. The new
instructions will
require ALL clubs to include a schedule K-2 and K-3s for
each member
with their form 1065, even if the club had no foreign
income.
ICLUBcentral is making the needed changes to the Federal tax
printer so
these schedules will be included for all clubs. Please
consider waiting
until these changes are implemented to generate your club
Federal tax
return. These schedules are LONG and will add about 220
pages to the
return of a club with 10 members. E-filing becomes an even
better option
now.
Registered Investment Company (typically a mutual fund or ETF).
Ira Smilovitz
On Thu, Feb 10, 2022 at 10:23 AM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Showing my ignorance, but for what is RIC an abbreviation?Peter DunkelbergerOn Thu, Feb 10, 2022 at 9:55 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
Unfortunately it doesn't appear so. We've frequently seen disclaimers on 1099's (if they even provided any foreign source information) such as the ones below:
In this case, the RIC's they are referring to are ETF's with foreign investments. This means that for a club to get the information they need on the correct percentage of foreign source income, they need to go to the investor relations page for the ETF and find what information the company has provided there.
Sometimes there is nothing on the 1099 even though the ETF had foreign income. So you're going to need to check the company investor relations pages for all ETF's your club owns.
What you will be looking for is information like this which the Amplify funds have posted for their ETF's BATT and JGLD.
https://amplifyetfs.com/wp-content/uploads/files/Amplify_Tax_Insert_2021.pdf
You'll be able to enter this percentage when you prepare your club taxes.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeOn Thu, Feb 10, 2022 at 9:16 AM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:Don't the brokerages have some degree of responsibility to accurately report those incomeitems to the clubs and the IRS through the 1099s?Peter DunkelbergerSumner Stock Selectors Investment ClubOn Thu, Feb 10, 2022 at 8:54 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
As current IRS instructions stand, you are not going to avoid these forms whether or not you have foreign investments, so that, in itself, would not be a reason to sell them.
However, foreign investments can have the potential to bring other problematic tax reporting and accounting issues for clubs. We've seen many times where such stocks have gone through reorganizations or special distributions and have not provided good guidance on the US tax implications of those things. This has led to delays in providing clubs the information they need to get their records correctly updated.
In addition, if your club owns any ETF's with exposure to foreign companies, you may have more difficulties getting the information you need to report that income on your club taxes with the new forms.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeWould the recommendation be to sell any ADRs this year to avoid these forms for next year? Too late to do anything about this for 2021 tax return.Ira,
Good clarification. The instructions are dated Sept. 2021; the form is dated Feb. 2022. Best course is to provide the detail.
Jeri
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ira smilovitz via bivio.com
Sent: Wednesday, February 9, 2022 7:56 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Jeff,
You haven't seen the revised instructions released on Jan 18. They state that partnerships, even those with no foreign activity, must provide the information unless they know for certain that their partners have no other foreign activity that would require an 1116. Penalties for failure to file are the same as those for errors/omissions on Schedule K-1 - $280 per K-2, increased to the greater of $570 or 10% of the items to be reported per K-2 in the case of intentional disregard.
Ira Smilovitz, EA
On Wed, Feb 9, 2022 at 9:58 PM Jeri Morgan via bivio.com <user*16990000001@bivio.com> wrote:
Per IRS instructions for K-2 form: The partnership need not complete this schedule if the partnership does not have items of international tax relevance (typically, international activities or foreign partners). The entire K-2 form is 19 pages long.
Jeri Morgan, Assistant treasurer
Mutual Investment Group of Cheney (WA)
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of cecelia vanderlip via bivio.com
Sent: Wednesday, February 9, 2022 5:26 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Definitely a good idea to write your representatives.
Cecelia
On Feb 9, 2022, at 2:24 PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
The IRS is only doing what Congress directed them to do as part of the 2017 Tax Cuts and Jobs Act. Congress changed the way multinational entities calculate their US tax liability to reduce their ability to eliminate US taxes with excessive foreign tax credits and/or sheltering income offshore. We are just the tiny fish caught in the net.
By all means write to your Representatives in DC and complain. It can be effective. Just this week the IRS announced that it was suspending plans to move to a facial recognition identity verification process if you wanted access to your IRS records.
Ira Smilovitz
On Wed, Feb 9, 2022 at 5:13 PM John Munn via bivio.com <user*223700001@bivio.com> wrote:
Let them choke on their paper.
On Wed, Feb 9, 2022 at 2:28 PM Leonard J Delmolino via bivio.com <user*27879700001@bivio.com> wrote:
I just saw the following posted on the Better Investing
Treasurer's discussion list. Is this true?
The IRS published new draft instructions for schedule K-2
dated
1/31/2022 on their draft forms web page. The new
instructions will
require ALL clubs to include a schedule K-2 and K-3s for
each member
with their form 1065, even if the club had no foreign
income.
ICLUBcentral is making the needed changes to the Federal tax
printer so
these schedules will be included for all clubs. Please
consider waiting
until these changes are implemented to generate your club
Federal tax
return. These schedules are LONG and will add about 220
pages to the
return of a club with 10 members. E-filing becomes an even
better option
now.
|
Registered Investment Company (typically a mutual fund or ETF).Ira SmilovitzOn Thu, Feb 10, 2022 at 10:23 AM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:Showing my ignorance, but for what is RIC an abbreviation?Peter DunkelbergerOn Thu, Feb 10, 2022 at 9:55 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
Unfortunately it doesn't appear so. We've frequently seen disclaimers on 1099's (if they even provided any foreign source information) such as the ones below:
In this case, the RIC's they are referring to are ETF's with foreign investments. This means that for a club to get the information they need on the correct percentage of foreign source income, they need to go to the investor relations page for the ETF and find what information the company has provided there.
Sometimes there is nothing on the 1099 even though the ETF had foreign income. So you're going to need to check the company investor relations pages for all ETF's your club owns.
What you will be looking for is information like this which the Amplify funds have posted for their ETF's BATT and JGLD.
https://amplifyetfs.com/wp-content/uploads/files/Amplify_Tax_Insert_2021.pdf
You'll be able to enter this percentage when you prepare your club taxes.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeOn Thu, Feb 10, 2022 at 9:16 AM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:Don't the brokerages have some degree of responsibility to accurately report those incomeitems to the clubs and the IRS through the 1099s?Peter DunkelbergerSumner Stock Selectors Investment ClubOn Thu, Feb 10, 2022 at 8:54 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
As current IRS instructions stand, you are not going to avoid these forms whether or not you have foreign investments, so that, in itself, would not be a reason to sell them.
However, foreign investments can have the potential to bring other problematic tax reporting and accounting issues for clubs. We've seen many times where such stocks have gone through reorganizations or special distributions and have not provided good guidance on the US tax implications of those things. This has led to delays in providing clubs the information they need to get their records correctly updated.
In addition, if your club owns any ETF's with exposure to foreign companies, you may have more difficulties getting the information you need to report that income on your club taxes with the new forms.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeWould the recommendation be to sell any ADRs this year to avoid these forms for next year? Too late to do anything about this for 2021 tax return.Ira,
Good clarification. The instructions are dated Sept. 2021; the form is dated Feb. 2022. Best course is to provide the detail.
Jeri
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ira smilovitz via bivio.com
Sent: Wednesday, February 9, 2022 7:56 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Jeff,
You haven't seen the revised instructions released on Jan 18. They state that partnerships, even those with no foreign activity, must provide the information unless they know for certain that their partners have no other foreign activity that would require an 1116. Penalties for failure to file are the same as those for errors/omissions on Schedule K-1 - $280 per K-2, increased to the greater of $570 or 10% of the items to be reported per K-2 in the case of intentional disregard.
Ira Smilovitz, EA
On Wed, Feb 9, 2022 at 9:58 PM Jeri Morgan via bivio.com <user*16990000001@bivio.com> wrote:
Per IRS instructions for K-2 form: The partnership need not complete this schedule if the partnership does not have items of international tax relevance (typically, international activities or foreign partners). The entire K-2 form is 19 pages long.
Jeri Morgan, Assistant treasurer
Mutual Investment Group of Cheney (WA)
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of cecelia vanderlip via bivio.com
Sent: Wednesday, February 9, 2022 5:26 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Definitely a good idea to write your representatives.
Cecelia
On Feb 9, 2022, at 2:24 PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
The IRS is only doing what Congress directed them to do as part of the 2017 Tax Cuts and Jobs Act. Congress changed the way multinational entities calculate their US tax liability to reduce their ability to eliminate US taxes with excessive foreign tax credits and/or sheltering income offshore. We are just the tiny fish caught in the net.
By all means write to your Representatives in DC and complain. It can be effective. Just this week the IRS announced that it was suspending plans to move to a facial recognition identity verification process if you wanted access to your IRS records.
Ira Smilovitz
On Wed, Feb 9, 2022 at 5:13 PM John Munn via bivio.com <user*223700001@bivio.com> wrote:
Let them choke on their paper.
On Wed, Feb 9, 2022 at 2:28 PM Leonard J Delmolino via bivio.com <user*27879700001@bivio.com> wrote:
I just saw the following posted on the Better Investing
Treasurer's discussion list. Is this true?
The IRS published new draft instructions for schedule K-2
dated
1/31/2022 on their draft forms web page. The new
instructions will
require ALL clubs to include a schedule K-2 and K-3s for
each member
with their form 1065, even if the club had no foreign
income.
ICLUBcentral is making the needed changes to the Federal tax
printer so
these schedules will be included for all clubs. Please
consider waiting
until these changes are implemented to generate your club
Federal tax
return. These schedules are LONG and will add about 220
pages to the
return of a club with 10 members. E-filing becomes an even
better option
now.
Hi Laurie,
Will this change be incorporated in the Investment Info Country field? Or will it only need to be specified when we generate our return? Currently I don't see RIC as an option for Country.
In general, will the issues with these schedules have any impact on the availability of the 2021 tax program? Do you have an estimate on how much larger the federal tax package will be in comparison with prior years? Our federal return for 2020 was 9 pages in total.
Thanks!
Len Delmolino
Massachusetts High Flyers Investment Club
On 02/10/2022 10:42 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
When you prepare your club taxes, RIC is the country code that you will enter for ETF's with foreign source income. In the past you may have entered "Various" for those investments , but that terminology is no longer allowed.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
Registered Investment Company (typically a mutual fund or ETF).
Ira Smilovitz
On Thu, Feb 10, 2022 at 10:23 AM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Showing my ignorance, but for what is RIC an abbreviation?
Peter Dunkelberger
On Thu, Feb 10, 2022 at 9:55 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
Unfortunately it doesn't appear so. We've frequently seen disclaimers on 1099's (if they even provided any foreign source information) such as the ones below:
In this case, the RIC's they are referring to are ETF's with foreign investments. This means that for a club to get the information they need on the correct percentage of foreign source income, they need to go to the investor relations page for the ETF and find what information the company has provided there.
Sometimes there is nothing on the 1099 even though the ETF had foreign income. So you're going to need to check the company investor relations pages for all ETF's your club owns.
What you will be looking for is information like this which the Amplify funds have posted for their ETF's BATT and JGLD.
https://amplifyetfs.com/wp-content/uploads/files/Amplify_Tax_Insert_2021.pdf
You'll be able to enter this percentage when you prepare your club taxes.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
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Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Thu, Feb 10, 2022 at 9:16 AM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Don't the brokerages have some degree of responsibility to accurately report those incomeitems to the clubs and the IRS through the 1099s?
Peter DunkelbergerSumner Stock Selectors Investment Club
On Thu, Feb 10, 2022 at 8:54 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
As current IRS instructions stand, you are not going to avoid these forms whether or not you have foreign investments, so that, in itself, would not be a reason to sell them.
However, foreign investments can have the potential to bring other problematic tax reporting and accounting issues for clubs. We've seen many times where such stocks have gone through reorganizations or special distributions and have not provided good guidance on the US tax implications of those things. This has led to delays in providing clubs the information they need to get their records correctly updated.
In addition, if your club owns any ETF's with exposure to foreign companies, you may have more difficulties getting the information you need to report that income on your club taxes with the new forms.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
Would the recommendation be to sell any ADRs this year to avoid these forms for next year? Too late to do anything about this for 2021 tax return.
Ira,
Good clarification. The instructions are dated Sept. 2021; the form is dated Feb. 2022. Best course is to provide the detail.
Jeri
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ira smilovitz via bivio.com
Sent: Wednesday, February 9, 2022 7:56 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Jeff,
You haven't seen the revised instructions released on Jan 18. They state that partnerships, even those with no foreign activity, must provide the information unless they know for certain that their partners have no other foreign activity that would require an 1116. Penalties for failure to file are the same as those for errors/omissions on Schedule K-1 - $280 per K-2, increased to the greater of $570 or 10% of the items to be reported per K-2 in the case of intentional disregard.
Ira Smilovitz, EA
On Wed, Feb 9, 2022 at 9:58 PM Jeri Morgan via bivio.com <user*16990000001@bivio.com> wrote:
Per IRS instructions for K-2 form: The partnership need not complete this schedule if the partnership does not have items of international tax relevance (typically, international activities or foreign partners). The entire K-2 form is 19 pages long.
Jeri Morgan, Assistant treasurer
Mutual Investment Group of Cheney (WA)
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of cecelia vanderlip via bivio.com
Sent: Wednesday, February 9, 2022 5:26 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Definitely a good idea to write your representatives.
Cecelia
On Feb 9, 2022, at 2:24 PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
The IRS is only doing what Congress directed them to do as part of the 2017 Tax Cuts and Jobs Act. Congress changed the way multinational entities calculate their US tax liability to reduce their ability to eliminate US taxes with excessive foreign tax credits and/or sheltering income offshore. We are just the tiny fish caught in the net.
By all means write to your Representatives in DC and complain. It can be effective. Just this week the IRS announced that it was suspending plans to move to a facial recognition identity verification process if you wanted access to your IRS records.
Ira Smilovitz
On Wed, Feb 9, 2022 at 5:13 PM John Munn via bivio.com <user*223700001@bivio.com> wrote:
Let them choke on their paper.
On Wed, Feb 9, 2022 at 2:28 PM Leonard J Delmolino via bivio.com <user*27879700001@bivio.com> wrote:
I just saw the following posted on the Better Investing
Treasurer's discussion list. Is this true?
The IRS published new draft instructions for schedule K-2
dated
1/31/2022 on their draft forms web page. The new
instructions will
require ALL clubs to include a schedule K-2 and K-3s for
each member
with their form 1065, even if the club had no foreign
income.
ICLUBcentral is making the needed changes to the Federal tax
printer so
these schedules will be included for all clubs. Please
consider waiting
until these changes are implemented to generate your club
Federal tax
return. These schedules are LONG and will add about 220
pages to the
return of a club with 10 members. E-filing becomes an even
better option
now.
Correction on my previous post. Counting K-1's, our federal return was 15 pages in total.
Len Delmolino
On 02/10/2022 11:51 AM LEONARD DELMOLINO via bivio.com <user*27879700001@bivio.com> wrote:
Hi Laurie,
Will this change be incorporated in the Investment Info Country field? Or will it only need to be specified when we generate our return? Currently I don't see RIC as an option for Country.
In general, will the issues with these schedules have any impact on the availability of the 2021 tax program? Do you have an estimate on how much larger the federal tax package will be in comparison with prior years? Our federal return for 2020 was 9 pages in total.
Thanks!
Len Delmolino
Massachusetts High Flyers Investment Club
On 02/10/2022 10:42 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
When you prepare your club taxes, RIC is the country code that you will enter for ETF's with foreign source income. In the past you may have entered "Various" for those investments , but that terminology is no longer allowed.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
Registered Investment Company (typically a mutual fund or ETF).
Ira Smilovitz
On Thu, Feb 10, 2022 at 10:23 AM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Showing my ignorance, but for what is RIC an abbreviation?
Peter Dunkelberger
On Thu, Feb 10, 2022 at 9:55 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
Unfortunately it doesn't appear so. We've frequently seen disclaimers on 1099's (if they even provided any foreign source information) such as the ones below:
In this case, the RIC's they are referring to are ETF's with foreign investments. This means that for a club to get the information they need on the correct percentage of foreign source income, they need to go to the investor relations page for the ETF and find what information the company has provided there.
Sometimes there is nothing on the 1099 even though the ETF had foreign income. So you're going to need to check the company investor relations pages for all ETF's your club owns.
What you will be looking for is information like this which the Amplify funds have posted for their ETF's BATT and JGLD.
https://amplifyetfs.com/wp-content/uploads/files/Amplify_Tax_Insert_2021.pdf
You'll be able to enter this percentage when you prepare your club taxes.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Thu, Feb 10, 2022 at 9:16 AM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Don't the brokerages have some degree of responsibility to accurately report those incomeitems to the clubs and the IRS through the 1099s?
Peter DunkelbergerSumner Stock Selectors Investment Club
On Thu, Feb 10, 2022 at 8:54 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
As current IRS instructions stand, you are not going to avoid these forms whether or not you have foreign investments, so that, in itself, would not be a reason to sell them.
However, foreign investments can have the potential to bring other problematic tax reporting and accounting issues for clubs. We've seen many times where such stocks have gone through reorganizations or special distributions and have not provided good guidance on the US tax implications of those things. This has led to delays in providing clubs the information they need to get their records correctly updated.
In addition, if your club owns any ETF's with exposure to foreign companies, you may have more difficulties getting the information you need to report that income on your club taxes with the new forms.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
Would the recommendation be to sell any ADRs this year to avoid these forms for next year? Too late to do anything about this for 2021 tax return.
Ira,
Good clarification. The instructions are dated Sept. 2021; the form is dated Feb. 2022. Best course is to provide the detail.
Jeri
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ira smilovitz via bivio.com
Sent: Wednesday, February 9, 2022 7:56 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Jeff,
You haven't seen the revised instructions released on Jan 18. They state that partnerships, even those with no foreign activity, must provide the information unless they know for certain that their partners have no other foreign activity that would require an 1116. Penalties for failure to file are the same as those for errors/omissions on Schedule K-1 - $280 per K-2, increased to the greater of $570 or 10% of the items to be reported per K-2 in the case of intentional disregard.
Ira Smilovitz, EA
On Wed, Feb 9, 2022 at 9:58 PM Jeri Morgan via bivio.com <user*16990000001@bivio.com> wrote:
Per IRS instructions for K-2 form: The partnership need not complete this schedule if the partnership does not have items of international tax relevance (typically, international activities or foreign partners). The entire K-2 form is 19 pages long.
Jeri Morgan, Assistant treasurer
Mutual Investment Group of Cheney (WA)
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of cecelia vanderlip via bivio.com
Sent: Wednesday, February 9, 2022 5:26 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Definitely a good idea to write your representatives.
Cecelia
On Feb 9, 2022, at 2:24 PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
The IRS is only doing what Congress directed them to do as part of the 2017 Tax Cuts and Jobs Act. Congress changed the way multinational entities calculate their US tax liability to reduce their ability to eliminate US taxes with excessive foreign tax credits and/or sheltering income offshore. We are just the tiny fish caught in the net.
By all means write to your Representatives in DC and complain. It can be effective. Just this week the IRS announced that it was suspending plans to move to a facial recognition identity verification process if you wanted access to your IRS records.
Ira Smilovitz
On Wed, Feb 9, 2022 at 5:13 PM John Munn via bivio.com <user*223700001@bivio.com> wrote:
Let them choke on their paper.
On Wed, Feb 9, 2022 at 2:28 PM Leonard J Delmolino via bivio.com <user*27879700001@bivio.com> wrote:
I just saw the following posted on the Better Investing
Treasurer's discussion list. Is this true?
The IRS published new draft instructions for schedule K-2
dated
1/31/2022 on their draft forms web page. The new
instructions will
require ALL clubs to include a schedule K-2 and K-3s for
each member
with their form 1065, even if the club had no foreign
income.
ICLUBcentral is making the needed changes to the Federal tax
printer so
these schedules will be included for all clubs. Please
consider waiting
until these changes are implemented to generate your club
Federal tax
return. These schedules are LONG and will add about 220
pages to the
return of a club with 10 members. E-filing becomes an even
better option
now.
Hi Ira, our club has no dividends from foreign companies or foreign taxes withheld.
Do I still need to file the new schedules? We are 16 members which means about 400 blank pages.
Another question: I normally do my taxes manually, we don't buy the tax program Is there a way to file electronically in case I need to file K-2 & K-3?
Thanks, Lily Navon
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ira smilovitz via bivio.com
Sent: Wednesday, February 9, 2022 10:56 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Jeff,
You haven't seen the revised instructions released on Jan 18. They state that partnerships, even those with no foreign activity, must provide the information unless they know for certain that their partners have no other foreign activity that would require an 1116. Penalties for failure to file are the same as those for errors/omissions on Schedule K-1 - $280 per K-2, increased to the greater of $570 or 10% of the items to be reported per K-2 in the case of intentional disregard.
Ira Smilovitz, EA
On Wed, Feb 9, 2022 at 9:58 PM Jeri Morgan via bivio.com <user*16990000001@bivio.com> wrote:
Per IRS instructions for K-2 form: The partnership need not complete this schedule if the partnership does not have items of international tax relevance (typically, international activities or foreign partners). The entire K-2 form is 19 pages long.
Jeri Morgan, Assistant treasurer
Mutual Investment Group of Cheney (WA)
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of cecelia vanderlip via bivio.com
Sent: Wednesday, February 9, 2022 5:26 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Definitely a good idea to write your representatives.
Cecelia
On Feb 9, 2022, at 2:24 PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
The IRS is only doing what Congress directed them to do as part of the 2017 Tax Cuts and Jobs Act. Congress changed the way multinational entities calculate their US tax liability to reduce their ability to eliminate US taxes with excessive foreign tax credits and/or sheltering income offshore. We are just the tiny fish caught in the net.
By all means write to your Representatives in DC and complain. It can be effective. Just this week the IRS announced that it was suspending plans to move to a facial recognition identity verification process if you wanted access to your IRS records.
Ira Smilovitz
On Wed, Feb 9, 2022 at 5:13 PM John Munn via bivio.com <user*223700001@bivio.com> wrote:
Let them choke on their paper.
On Wed, Feb 9, 2022 at 2:28 PM Leonard J Delmolino via bivio.com <user*27879700001@bivio.com> wrote:
I just saw the following posted on the Better Investing
Treasurer's discussion list. Is this true?
The IRS published new draft instructions for schedule K-2
dated
1/31/2022 on their draft forms web page. The new
instructions will
require ALL clubs to include a schedule K-2 and K-3s for
each member
with their form 1065, even if the club had no foreign
income.
ICLUBcentral is making the needed changes to the Federal tax
printer so
these schedules will be included for all clubs. Please
consider waiting
until these changes are implemented to generate your club
Federal tax
return. These schedules are LONG and will add about 220
pages to the
return of a club with 10 members. E-filing becomes an even
better option
now.
|
Hi Ira, our club has no dividends from foreign companies or foreign taxes withheld.
Do I still need to file the new schedules? We are 16 members which means about 400 blank pages.
Another question: I normally do my taxes manually, we don't buy the tax program Is there a way to file electronically in case I need to file K-2 & K-3?
Thanks, Lily Navon
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ira smilovitz via bivio.com
Sent: Wednesday, February 9, 2022 10:56 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Jeff,
You haven't seen the revised instructions released on Jan 18. They state that partnerships, even those with no foreign activity, must provide the information unless they know for certain that their partners have no other foreign activity that would require an 1116. Penalties for failure to file are the same as those for errors/omissions on Schedule K-1 - $280 per K-2, increased to the greater of $570 or 10% of the items to be reported per K-2 in the case of intentional disregard.
Ira Smilovitz, EA
On Wed, Feb 9, 2022 at 9:58 PM Jeri Morgan via bivio.com <user*16990000001@bivio.com> wrote:
Per IRS instructions for K-2 form: The partnership need not complete this schedule if the partnership does not have items of international tax relevance (typically, international activities or foreign partners). The entire K-2 form is 19 pages long.
Jeri Morgan, Assistant treasurer
Mutual Investment Group of Cheney (WA)
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of cecelia vanderlip via bivio.com
Sent: Wednesday, February 9, 2022 5:26 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Definitely a good idea to write your representatives.
Cecelia
On Feb 9, 2022, at 2:24 PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
The IRS is only doing what Congress directed them to do as part of the 2017 Tax Cuts and Jobs Act. Congress changed the way multinational entities calculate their US tax liability to reduce their ability to eliminate US taxes with excessive foreign tax credits and/or sheltering income offshore. We are just the tiny fish caught in the net.
By all means write to your Representatives in DC and complain. It can be effective. Just this week the IRS announced that it was suspending plans to move to a facial recognition identity verification process if you wanted access to your IRS records.
Ira Smilovitz
On Wed, Feb 9, 2022 at 5:13 PM John Munn via bivio.com <user*223700001@bivio.com> wrote:
Let them choke on their paper.
On Wed, Feb 9, 2022 at 2:28 PM Leonard J Delmolino via bivio.com <user*27879700001@bivio.com> wrote:
I just saw the following posted on the Better Investing
Treasurer's discussion list. Is this true?
The IRS published new draft instructions for schedule K-2
dated
1/31/2022 on their draft forms web page. The new
instructions will
require ALL clubs to include a schedule K-2 and K-3s for
each member
with their form 1065, even if the club had no foreign
income.
ICLUBcentral is making the needed changes to the Federal tax
printer so
these schedules will be included for all clubs. Please
consider waiting
until these changes are implemented to generate your club
Federal tax
return. These schedules are LONG and will add about 220
pages to the
return of a club with 10 members. E-filing becomes an even
better option
now.
Can these forms be printed on a duplex (double sided) printer? We have 21 members and I am thinking about a full ream of paper for this.
On Thu, Feb 10, 2022 at 11:07 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
Yes. You will need to file these forms.
They will not be blank since your club income also needs to be reported on them.
Club members may have other foreign tax reporting they need to address on their personal income tax forms. They will need the information on the club forms to complete forms they need to personally file. It would be very difficult for clubs to determine the details of each members personal tax situations to effectively determine who may or may not need the forms.
Due to the large penalty you'd be assessed if you didn't provide forms that you should have, we feel the best way to proceed with this is for you to provide the forms to all club members.
You will probably have 7 to 8 additional pages for the single K-2 that you'll need to file and then 7 to 8 additional pages for the K-3 forms that each member will receive.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeHi Ira, our club has no dividends from foreign companies or foreign taxes withheld.
Do I still need to file the new schedules? We are 16 members which means about 400 blank pages.
Another question: I normally do my taxes manually, we don't buy the tax program Is there a way to file electronically in case I need to file K-2 & K-3?
Thanks, Lily Navon
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ira smilovitz via bivio.com
Sent: Wednesday, February 9, 2022 10:56 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Jeff,
You haven't seen the revised instructions released on Jan 18. They state that partnerships, even those with no foreign activity, must provide the information unless they know for certain that their partners have no other foreign activity that would require an 1116. Penalties for failure to file are the same as those for errors/omissions on Schedule K-1 - $280 per K-2, increased to the greater of $570 or 10% of the items to be reported per K-2 in the case of intentional disregard.
Ira Smilovitz, EA
On Wed, Feb 9, 2022 at 9:58 PM Jeri Morgan via bivio.com <user*16990000001@bivio.com> wrote:
Per IRS instructions for K-2 form: The partnership need not complete this schedule if the partnership does not have items of international tax relevance (typically, international activities or foreign partners). The entire K-2 form is 19 pages long.
Jeri Morgan, Assistant treasurer
Mutual Investment Group of Cheney (WA)
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of cecelia vanderlip via bivio.com
Sent: Wednesday, February 9, 2022 5:26 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Definitely a good idea to write your representatives.
Cecelia
On Feb 9, 2022, at 2:24 PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
The IRS is only doing what Congress directed them to do as part of the 2017 Tax Cuts and Jobs Act. Congress changed the way multinational entities calculate their US tax liability to reduce their ability to eliminate US taxes with excessive foreign tax credits and/or sheltering income offshore. We are just the tiny fish caught in the net.
By all means write to your Representatives in DC and complain. It can be effective. Just this week the IRS announced that it was suspending plans to move to a facial recognition identity verification process if you wanted access to your IRS records.
Ira Smilovitz
On Wed, Feb 9, 2022 at 5:13 PM John Munn via bivio.com <user*223700001@bivio.com> wrote:
Let them choke on their paper.
On Wed, Feb 9, 2022 at 2:28 PM Leonard J Delmolino via bivio.com <user*27879700001@bivio.com> wrote:
I just saw the following posted on the Better Investing
Treasurer's discussion list. Is this true?
The IRS published new draft instructions for schedule K-2
dated
1/31/2022 on their draft forms web page. The new
instructions will
require ALL clubs to include a schedule K-2 and K-3s for
each member
with their form 1065, even if the club had no foreign
income.
ICLUBcentral is making the needed changes to the Federal tax
printer so
these schedules will be included for all clubs. Please
consider waiting
until these changes are implemented to generate your club
Federal tax
return. These schedules are LONG and will add about 220
pages to the
return of a club with 10 members. E-filing becomes an even
better option
now.
I cannot see how members foreign tax reporting would be affected, if we have $0.00 in both foreign dividends and foreign tax paid.
Can these Schedules be printed both sides?
Thanks, Lily
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Laurie Frederiksen
Sent: Thursday, February 10, 2022 2:07 PM
To: The Club Cafe <club_cafe@bivio.com>
Subject: Re: [club_cafe] Schedules K-2 and K-3
|
On Thu, Feb 10, 2022 at 1:21 PM Lily Navon via bivio.com <user*37485900001@bivio.com> wrote:
Hi Ira, our club has no dividends from foreign companies or foreign taxes withheld.
Do I still need to file the new schedules? We are 16 members which means about 400 blank pages.
Another question: I normally do my taxes manually, we don't buy the tax program Is there a way to file electronically in case I need to file K-2 & K-3?
Thanks, Lily Navon
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ira smilovitz via bivio.com
Sent: Wednesday, February 9, 2022 10:56 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Jeff,
You haven't seen the revised instructions released on Jan 18. They state that partnerships, even those with no foreign activity, must provide the information unless they know for certain that their partners have no other foreign activity that would require an 1116. Penalties for failure to file are the same as those for errors/omissions on Schedule K-1 - $280 per K-2, increased to the greater of $570 or 10% of the items to be reported per K-2 in the case of intentional disregard.
Ira Smilovitz, EA
On Wed, Feb 9, 2022 at 9:58 PM Jeri Morgan via bivio.com <user*16990000001@bivio.com> wrote:
Per IRS instructions for K-2 form: The partnership need not complete this schedule if the partnership does not have items of international tax relevance (typically, international activities or foreign partners). The entire K-2 form is 19 pages long.
Jeri Morgan, Assistant treasurer
Mutual Investment Group of Cheney (WA)
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of cecelia vanderlip via bivio.com
Sent: Wednesday, February 9, 2022 5:26 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Definitely a good idea to write your representatives.
Cecelia
On Feb 9, 2022, at 2:24 PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
The IRS is only doing what Congress directed them to do as part of the 2017 Tax Cuts and Jobs Act. Congress changed the way multinational entities calculate their US tax liability to reduce their ability to eliminate US taxes with excessive foreign tax credits and/or sheltering income offshore. We are just the tiny fish caught in the net.
By all means write to your Representatives in DC and complain. It can be effective. Just this week the IRS announced that it was suspending plans to move to a facial recognition identity verification process if you wanted access to your IRS records.
Ira Smilovitz
On Wed, Feb 9, 2022 at 5:13 PM John Munn via bivio.com <user*223700001@bivio.com> wrote:
Let them choke on their paper.
On Wed, Feb 9, 2022 at 2:28 PM Leonard J Delmolino via bivio.com <user*27879700001@bivio.com> wrote:
I just saw the following posted on the Better Investing
Treasurer's discussion list. Is this true?
The IRS published new draft instructions for schedule K-2
dated
1/31/2022 on their draft forms web page. The new
instructions will
require ALL clubs to include a schedule K-2 and K-3s for
each member
with their form 1065, even if the club had no foreign
income.
ICLUBcentral is making the needed changes to the Federal tax
printer so
these schedules will be included for all clubs. Please
consider waiting
until these changes are implemented to generate your club
Federal tax
return. These schedules are LONG and will add about 220
pages to the
return of a club with 10 members. E-filing becomes an even
better option
now.
|
I cannot see how members foreign tax reporting would be affected, if we have $0.00 in both foreign dividends and foreign tax paid.
Can these Schedules be printed both sides?
Thanks, Lily
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Laurie Frederiksen
Sent: Thursday, February 10, 2022 2:07 PM
To: The Club Cafe <club_cafe@bivio.com>
Subject: Re: [club_cafe] Schedules K-2 and K-3
Yes. You will need to file these forms.
They will not be blank since your club income also needs to be reported on them.
Club members may have other foreign tax reporting they need to address on their personal income tax forms. They will need the information on the club forms to complete forms they need to personally file. It would be very difficult for clubs to determine the details of each members personal tax situations to effectively determine who may or may not need the forms.
Due to the large penalty you'd be assessed if you didn't provide forms that you should have, we feel the best way to proceed with this is for you to provide the forms to all club members.
You will probably have 7 to 8 additional pages for the single K-2 that you'll need to file and then 7 to 8 additional pages for the K-3 forms that each member will receive.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Thu, Feb 10, 2022 at 1:21 PM Lily Navon via bivio.com <user*37485900001@bivio.com> wrote:
Hi Ira, our club has no dividends from foreign companies or foreign taxes withheld.
Do I still need to file the new schedules? We are 16 members which means about 400 blank pages.
Another question: I normally do my taxes manually, we don't buy the tax program Is there a way to file electronically in case I need to file K-2 & K-3?
Thanks, Lily Navon
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ira smilovitz via bivio.com
Sent: Wednesday, February 9, 2022 10:56 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Jeff,
You haven't seen the revised instructions released on Jan 18. They state that partnerships, even those with no foreign activity, must provide the information unless they know for certain that their partners have no other foreign activity that would require an 1116. Penalties for failure to file are the same as those for errors/omissions on Schedule K-1 - $280 per K-2, increased to the greater of $570 or 10% of the items to be reported per K-2 in the case of intentional disregard.
Ira Smilovitz, EA
On Wed, Feb 9, 2022 at 9:58 PM Jeri Morgan via bivio.com <user*16990000001@bivio.com> wrote:
Per IRS instructions for K-2 form: The partnership need not complete this schedule if the partnership does not have items of international tax relevance (typically, international activities or foreign partners). The entire K-2 form is 19 pages long.
Jeri Morgan, Assistant treasurer
Mutual Investment Group of Cheney (WA)
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of cecelia vanderlip via bivio.com
Sent: Wednesday, February 9, 2022 5:26 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Definitely a good idea to write your representatives.
Cecelia
On Feb 9, 2022, at 2:24 PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
The IRS is only doing what Congress directed them to do as part of the 2017 Tax Cuts and Jobs Act. Congress changed the way multinational entities calculate their US tax liability to reduce their ability to eliminate US taxes with excessive foreign tax credits and/or sheltering income offshore. We are just the tiny fish caught in the net.
By all means write to your Representatives in DC and complain. It can be effective. Just this week the IRS announced that it was suspending plans to move to a facial recognition identity verification process if you wanted access to your IRS records.
Ira Smilovitz
On Wed, Feb 9, 2022 at 5:13 PM John Munn via bivio.com <user*223700001@bivio.com> wrote:
Let them choke on their paper.
On Wed, Feb 9, 2022 at 2:28 PM Leonard J Delmolino via bivio.com <user*27879700001@bivio.com> wrote:
I just saw the following posted on the Better Investing
Treasurer's discussion list. Is this true?
The IRS published new draft instructions for schedule K-2
dated
1/31/2022 on their draft forms web page. The new
instructions will
require ALL clubs to include a schedule K-2 and K-3s for
each member
with their form 1065, even if the club had no foreign
income.
ICLUBcentral is making the needed changes to the Federal tax
printer so
these schedules will be included for all clubs. Please
consider waiting
until these changes are implemented to generate your club
Federal tax
return. These schedules are LONG and will add about 220
pages to the
return of a club with 10 members. E-filing becomes an even
better option
now.
Will the Bivio Tax Software generate these new forms K-2, K-3??
On Thursday, February 10, 2022, 03:27:28 PM EST, Laurie Frederiksen <laurie@bivio.biz> wrote:
|
I cannot see how members foreign tax reporting would be affected, if we have $0.00 in both foreign dividends and foreign tax paid.
Can these Schedules be printed both sides?
Thanks, Lily
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Laurie Frederiksen
Sent: Thursday, February 10, 2022 2:07 PM
To: The Club Cafe <club_cafe@bivio.com>
Subject: Re: [club_cafe] Schedules K-2 and K-3
Yes. You will need to file these forms.
They will not be blank since your club income also needs to be reported on them.
Club members may have other foreign tax reporting they need to address on their personal income tax forms. They will need the information on the club forms to complete forms they need to personally file. It would be very difficult for clubs to determine the details of each members personal tax situations to effectively determine who may or may not need the forms.
Due to the large penalty you'd be assessed if you didn't provide forms that you should have, we feel the best way to proceed with this is for you to provide the forms to all club members.
You will probably have 7 to 8 additional pages for the single K-2 that you'll need to file and then 7 to 8 additional pages for the K-3 forms that each member will receive.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe
On Thu, Feb 10, 2022 at 1:21 PM Lily Navon via bivio.com <user*37485900001@bivio.com> wrote:
Hi Ira, our club has no dividends from foreign companies or foreign taxes withheld.
Do I still need to file the new schedules? We are 16 members which means about 400 blank pages.
Another question: I normally do my taxes manually, we don't buy the tax program Is there a way to file electronically in case I need to file K-2 & K-3?
Thanks, Lily Navon
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ira smilovitz via bivio.com
Sent: Wednesday, February 9, 2022 10:56 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Jeff,
You haven't seen the revised instructions released on Jan 18. They state that partnerships, even those with no foreign activity, must provide the information unless they know for certain that their partners have no other foreign activity that would require an 1116. Penalties for failure to file are the same as those for errors/omissions on Schedule K-1 - $280 per K-2, increased to the greater of $570 or 10% of the items to be reported per K-2 in the case of intentional disregard.
Ira Smilovitz, EA
On Wed, Feb 9, 2022 at 9:58 PM Jeri Morgan via bivio.com <user*16990000001@bivio.com> wrote:
Per IRS instructions for K-2 form: The partnership need not complete this schedule if the partnership does not have items of international tax relevance (typically, international activities or foreign partners). The entire K-2 form is 19 pages long.
Jeri Morgan, Assistant treasurer
Mutual Investment Group of Cheney (WA)
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of cecelia vanderlip via bivio.com
Sent: Wednesday, February 9, 2022 5:26 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Definitely a good idea to write your representatives.
Cecelia
On Feb 9, 2022, at 2:24 PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
The IRS is only doing what Congress directed them to do as part of the 2017 Tax Cuts and Jobs Act. Congress changed the way multinational entities calculate their US tax liability to reduce their ability to eliminate US taxes with excessive foreign tax credits and/or sheltering income offshore. We are just the tiny fish caught in the net.
By all means write to your Representatives in DC and complain. It can be effective. Just this week the IRS announced that it was suspending plans to move to a facial recognition identity verification process if you wanted access to your IRS records.
Ira Smilovitz
On Wed, Feb 9, 2022 at 5:13 PM John Munn via bivio.com <user*223700001@bivio.com> wrote:
Let them choke on their paper.
On Wed, Feb 9, 2022 at 2:28 PM Leonard J Delmolino via bivio.com <user*27879700001@bivio.com> wrote:
I just saw the following posted on the Better Investing
Treasurer's discussion list. Is this true?
The IRS published new draft instructions for schedule K-2
dated
1/31/2022 on their draft forms web page. The new
instructions will
require ALL clubs to include a schedule K-2 and K-3s for
each member
with their form 1065, even if the club had no foreign
income.
ICLUBcentral is making the needed changes to the Federal tax
printer so
these schedules will be included for all clubs. Please
consider waiting
until these changes are implemented to generate your club
Federal tax
return. These schedules are LONG and will add about 220
pages to the
return of a club with 10 members. E-filing becomes an even
better option
now.
Bivio prepares our Federal tax return, may I presume that you will prepare the K2 & K3? Or did I miss something in this conversation?
Peter Dunkelberger
On Thu, Feb 10, 2022 at 2:07 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
Yes. You will need to file these forms.
They will not be blank since your club income also needs to be reported on them.
Club members may have other foreign tax reporting they need to address on their personal income tax forms. They will need the information on the club forms to complete forms they need to personally file. It would be very difficult for clubs to determine the details of each members personal tax situations to effectively determine who may or may not need the forms.
Due to the large penalty you'd be assessed if you didn't provide forms that you should have, we feel the best way to proceed with this is for you to provide the forms to all club members.
You will probably have 7 to 8 additional pages for the single K-2 that you'll need to file and then 7 to 8 additional pages for the K-3 forms that each member will receive.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeHi Ira, our club has no dividends from foreign companies or foreign taxes withheld.
Do I still need to file the new schedules? We are 16 members which means about 400 blank pages.
Another question: I normally do my taxes manually, we don't buy the tax program Is there a way to file electronically in case I need to file K-2 & K-3?
Thanks, Lily Navon
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ira smilovitz via bivio.com
Sent: Wednesday, February 9, 2022 10:56 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Jeff,
You haven't seen the revised instructions released on Jan 18. They state that partnerships, even those with no foreign activity, must provide the information unless they know for certain that their partners have no other foreign activity that would require an 1116. Penalties for failure to file are the same as those for errors/omissions on Schedule K-1 - $280 per K-2, increased to the greater of $570 or 10% of the items to be reported per K-2 in the case of intentional disregard.
Ira Smilovitz, EA
On Wed, Feb 9, 2022 at 9:58 PM Jeri Morgan via bivio.com <user*16990000001@bivio.com> wrote:
Per IRS instructions for K-2 form: The partnership need not complete this schedule if the partnership does not have items of international tax relevance (typically, international activities or foreign partners). The entire K-2 form is 19 pages long.
Jeri Morgan, Assistant treasurer
Mutual Investment Group of Cheney (WA)
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of cecelia vanderlip via bivio.com
Sent: Wednesday, February 9, 2022 5:26 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Definitely a good idea to write your representatives.
Cecelia
On Feb 9, 2022, at 2:24 PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
The IRS is only doing what Congress directed them to do as part of the 2017 Tax Cuts and Jobs Act. Congress changed the way multinational entities calculate their US tax liability to reduce their ability to eliminate US taxes with excessive foreign tax credits and/or sheltering income offshore. We are just the tiny fish caught in the net.
By all means write to your Representatives in DC and complain. It can be effective. Just this week the IRS announced that it was suspending plans to move to a facial recognition identity verification process if you wanted access to your IRS records.
Ira Smilovitz
On Wed, Feb 9, 2022 at 5:13 PM John Munn via bivio.com <user*223700001@bivio.com> wrote:
Let them choke on their paper.
On Wed, Feb 9, 2022 at 2:28 PM Leonard J Delmolino via bivio.com <user*27879700001@bivio.com> wrote:
I just saw the following posted on the Better Investing
Treasurer's discussion list. Is this true?
The IRS published new draft instructions for schedule K-2
dated
1/31/2022 on their draft forms web page. The new
instructions will
require ALL clubs to include a schedule K-2 and K-3s for
each member
with their form 1065, even if the club had no foreign
income.
ICLUBcentral is making the needed changes to the Federal tax
printer so
these schedules will be included for all clubs. Please
consider waiting
until these changes are implemented to generate your club
Federal tax
return. These schedules are LONG and will add about 220
pages to the
return of a club with 10 members. E-filing becomes an even
better option
now.
|
On Thu, Feb 10, 2022 at 5:00 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:
Bivio prepares our Federal tax return, may I presume that you will prepare the K2 & K3? Or did I miss something in this conversation?Peter DunkelbergerOn Thu, Feb 10, 2022 at 2:07 PM Laurie Frederiksen <laurie@bivio.biz> wrote:
Yes. You will need to file these forms.
They will not be blank since your club income also needs to be reported on them.
Club members may have other foreign tax reporting they need to address on their personal income tax forms. They will need the information on the club forms to complete forms they need to personally file. It would be very difficult for clubs to determine the details of each members personal tax situations to effectively determine who may or may not need the forms.
Due to the large penalty you'd be assessed if you didn't provide forms that you should have, we feel the best way to proceed with this is for you to provide the forms to all club members.
You will probably have 7 to 8 additional pages for the single K-2 that you'll need to file and then 7 to 8 additional pages for the K-3 forms that each member will receive.
Laurie Frederiksen
Invest with your friends!
www.bivio.com
Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+
Click here to Subscribe to the Club Cafe email list. Click here to UnsubscribeHi Ira, our club has no dividends from foreign companies or foreign taxes withheld.
Do I still need to file the new schedules? We are 16 members which means about 400 blank pages.
Another question: I normally do my taxes manually, we don't buy the tax program Is there a way to file electronically in case I need to file K-2 & K-3?
Thanks, Lily Navon
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of ira smilovitz via bivio.com
Sent: Wednesday, February 9, 2022 10:56 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Jeff,
You haven't seen the revised instructions released on Jan 18. They state that partnerships, even those with no foreign activity, must provide the information unless they know for certain that their partners have no other foreign activity that would require an 1116. Penalties for failure to file are the same as those for errors/omissions on Schedule K-1 - $280 per K-2, increased to the greater of $570 or 10% of the items to be reported per K-2 in the case of intentional disregard.
Ira Smilovitz, EA
On Wed, Feb 9, 2022 at 9:58 PM Jeri Morgan via bivio.com <user*16990000001@bivio.com> wrote:
Per IRS instructions for K-2 form: The partnership need not complete this schedule if the partnership does not have items of international tax relevance (typically, international activities or foreign partners). The entire K-2 form is 19 pages long.
Jeri Morgan, Assistant treasurer
Mutual Investment Group of Cheney (WA)
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of cecelia vanderlip via bivio.com
Sent: Wednesday, February 9, 2022 5:26 PM
To: club_cafe@bivio.com
Subject: Re: [club_cafe] Schedules K-2 and K-3
Definitely a good idea to write your representatives.
Cecelia
On Feb 9, 2022, at 2:24 PM, ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote:
The IRS is only doing what Congress directed them to do as part of the 2017 Tax Cuts and Jobs Act. Congress changed the way multinational entities calculate their US tax liability to reduce their ability to eliminate US taxes with excessive foreign tax credits and/or sheltering income offshore. We are just the tiny fish caught in the net.
By all means write to your Representatives in DC and complain. It can be effective. Just this week the IRS announced that it was suspending plans to move to a facial recognition identity verification process if you wanted access to your IRS records.
Ira Smilovitz
On Wed, Feb 9, 2022 at 5:13 PM John Munn via bivio.com <user*223700001@bivio.com> wrote:
Let them choke on their paper.
On Wed, Feb 9, 2022 at 2:28 PM Leonard J Delmolino via bivio.com <user*27879700001@bivio.com> wrote:
I just saw the following posted on the Better Investing
Treasurer's discussion list. Is this true?
The IRS published new draft instructions for schedule K-2
dated
1/31/2022 on their draft forms web page. The new
instructions will
require ALL clubs to include a schedule K-2 and K-3s for
each member
with their form 1065, even if the club had no foreign
income.
ICLUBcentral is making the needed changes to the Federal tax
printer so
these schedules will be included for all clubs. Please
consider waiting
until these changes are implemented to generate your club
Federal tax
return. These schedules are LONG and will add about 220
pages to the
return of a club with 10 members. E-filing becomes an even
better option
now.