IRS releases draft instructions for forms K-2 and K-3

On June 29, 2021, the IRS released draft instructions of forms K-2 and K-3, after receiving feedback on the initial instructions that were released in July 2020. These new draft instructions may be found here https://www.irs.gov/pub/irs-dft/i1065s23–dft.pdf. The new forms will be effective for the 2021 tax year. Don’t miss: What are duty free zones? Forms …

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What are duty free zones?

If you’ve caught a flight in an international airport, you’ve likely seen shops in the airport marketing that they are “Duty Free Zones”. While most people may assume this means that goods purchased there are free from some type of tax, have you ever stopped to wonder what a duty is, and why these shops …

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They said what? Funny tax season water cooler moments.

It’s the end of tax season…sort of. Since our world these days seems to be a mixture of online and in person, this annual blog on the things we have heard is along similar lines. A new IT guy when faced with the dilemma of the high powered scanner not working properly. “Why don’t you …

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Changes to 2020 form 5471- US owners of foreign corporations

The IRS released the draft form 5471 and instructions for 2020, which show a myriad of updates to the form. Don’t miss: Gift tax FAQs New Categories Categories 1 and 5 have been expanded to 1a, 1b, 1c, 5a, 5b and 5c in order to separate those filers who are under some relief and may …

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New law bans anonymous shell companies

Part of the newly passed National Defense Authorization Act, known as the Corporate Transparency Act, includes a ban on anonymous shell companies in the United States. Historically, the U.S. has been one of the top countries for criminals seeking financial secrecy and hiding large amounts of money. This new law attempts to close loopholes and …

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New form 8858 filing requirements for foreign rentals and businesses

Effective beginning in 2018, the IRS expanded the scope of those U.S. persons required to file a Form 8858 with their tax return.  In addition to reporting foreign disregarded entities (FDEs), foreign branches (FBs) must now be reported on the 8858. Don’t miss: Planning for stimulus What is considered a foreign branch for purposes of …

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Are you choosing the best tax preparer?

It is in the taxpayer’s best interest to choose a tax preparer that best suits their needs. After all, responsibility does fall on the taxpayer for the information disclosed on their tax return, not the tax preparer. There is a large assortment of tax preparers available to assist you with your 2020 taxes, but are …

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More clarity for partnership international reporting

Are you invested in a partnership that provides you with an enormous number of documents attached to the K-1? Well the recent form changes are meant to extract some of the long narratives to describe the type of foreign income items being allocated to you and streamline such disclosures to specific Schedules on the K-1. …

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