Schedule K-2 (Form 1065), Partners' Distributive Share Items - International, is the Internal Revenue Service (IRS) schedule on which a partnership reports international information that is attached to Form 1065. Item C on the first page lets the partnership mark which of its 12 parts apply, and only those parts are completed and attached. On this page you can fill out the form online on FillingPDF and download or print the completed PDF; the original PDF and the instructions are published by the IRS at www.irs.gov/Form1065.
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What is Schedule K-2 (Form 1065)?
Schedule K-2 (Form 1065), Partners' Distributive Share Items - International, is the Internal Revenue Service (IRS) schedule, issued under OMB No. 1545-0123 and attached to Form 1065, on which a partnership reports foreign tax credit limitation amounts, foreign taxes and other international information.
It is a schedule of Form 1065 and is not filed on its own. The 2025 edition runs 19 pages and is organized in 12 parts:
- Part I: the partnership's other current year international information, with boxes for additional specified attachments.
- Part II: foreign tax credit limitation, with gross income (lines 1 to 24), deductions (lines 25 to 54) and net income (loss) on line 55.
- Part III: other information for preparing Form 1116 or 1118, including R&E and interest expense apportionment factors, foreign taxes and other tax information.
- Part IV: information on partners' section 250 deduction for foreign-derived intangible income (FDII), used for Form 8993.
- Parts V to VIII: distributions from foreign corporations, section 951(a)(1) and 951A inclusions, passive foreign investment companies (PFICs) and the partnership's interest in foreign corporation income (section 960).
- Part IX: information for the base erosion and anti-abuse tax (section 59A).
- Part X: foreign partners' character and source of income and deductions.
- Parts XI and XII: section 871(m) covered partnerships and the section 871(m) tax liability of a qualified derivatives dealer (QDD).
The IRS instructions are at www.irs.gov/Form1065. This schedule is not the Form 1065 return itself.
Who needs to file Schedule K-2 (Form 1065)?
The main group is partnerships that file Form 1065 and have international items to report; they attach Schedule K-2 (Form 1065) to that return. The form does not apply to every partnership in full. Item C asks, for each of Parts I to XII, whether the part applies, and you complete and attach a part only when you answer Yes.
Two questions at the top identify special statuses:
- Item A asks whether the partnership is a withholding foreign partnership and, if Yes, for its WP-EIN.
- Item B asks whether the partnership, including the home office or any branch, is a qualified derivatives dealer and, if Yes, for its QI-EIN.
Some parts serve particular situations: Part VII for PFICs, Part IX for partners' base erosion and anti-abuse tax information, Part X for foreign partners, and Part XI for a publicly traded partnership that is a covered partnership under section 871(m). The form prints no other eligibility test and says nothing about who may sign or file for someone else, so check the Instructions for Form 1065 at www.irs.gov/Form1065 to decide which parts apply to you.
When to file Schedule K-2 (Form 1065)
Schedule K-2 (Form 1065) has no due date of its own: the form says to attach it to Form 1065, so it is submitted whenever that return is. Complete it at the same time as the return, because the amounts in Parts II, III and the other parts you mark as applicable feed the information the partnership reports.
If you are correcting a schedule already submitted, check box D(1), Amended K-2, on the first page. For any deadline, extension or penalty that applies to Form 1065, see the Instructions for Form 1065 at www.irs.gov/Form1065.
Documents you need
- Form 1065: Schedule K-2 (Form 1065) is not filed alone; the form says to attach it to Form 1065.
- Each Part of Schedule K-2 you marked Yes in item C, completed and attached; the form says to complete and attach a Part when it applies.
- Description and statement for foreign tax translation: attach them when you check box 4 in Part I.
- The additional specified attachments named in the instructions for any other box you check in Part I (for example Form 5471 information, partner loan transactions or other international items).
- A statement in Part VIII when a line has more than one source country (item D).
- A separate Part VIII when you check item E (U.S. source) or item F (foreign oil related income or foreign oil and gas extraction income).
- A separate Part VI for each separate category when the income is U.S. source (line b of Part VI).
- The attachments referred to on Part III, Section 2, lines 7 and 8, for basis in stock of 10%-owned noncontrolled foreign corporations and of CFCs.
How to fill out Schedule K-2 (Form 1065)
Enter partnership name and EIN
At the top of page 1, enter the name of the partnership and its employer identification number (EIN). The same two entries repeat at the top of every page.
Answer items A and B
Item A: check Yes or No for whether the partnership is a withholding foreign partnership, and enter the WP-EIN if Yes. Item B: check Yes or No for whether it is a qualified derivatives dealer, and enter the QI-EIN if Yes.
Mark the parts that apply
In item C, answer Yes or No for each of Parts I through XII (lines 1 to 12). Complete and attach only the Parts you answer Yes.
Check the amended box if needed
In item D, check box (1) Amended K-2 if this schedule corrects one already submitted. Box (2) is reserved for future use.
Complete Part I
Check each box for additional specified attachments that applies, such as gain on personal property sale, foreign oil and gas taxes, Form 5471 information or other international items. For box 4, foreign tax translation, attach a description and statement.
Report gross income in Part II
In Section 1, lines 1 to 23, enter each type of income by column: (a) U.S. source, (b) foreign branch category income, (c) passive category income, (d) general category income, (e) other, (f) sourced by partner and (g) total. Line 24 totals lines 1 through 23.
Report deductions and net income
In Part II, Section 2, enter expenses and losses on lines 25 to 53 in the same columns; line 54 totals lines 25 through 53. Line 55 is net income (loss): subtract line 54 from line 24.
Complete Part III for Form 1116 or 1118
Enter R&E expense and interest expense apportionment factors, the FDII deduction apportionment factors, the foreign taxes in Section 4 and the section 743(b) adjustments in Section 5, as the Part III lines ask.
Complete Parts IV and V
Part IV gives the information for Form 8993 on deduction eligible income (DEI), qualified business asset investment (QBAI) and foreign-derived deduction eligible income (FDDEI). Part V lists each distributing foreign corporation with its distribution date, currency, amounts and spot rate.
Complete Parts VI to VIII
Part VI reports section 951(a)(1) and 951A inclusions by CFC under a separate category code; Part VII covers each PFIC, with its elections; Part VIII covers the partnership's interest in foreign corporation income under section 960, in the foreign corporation's functional currency unless noted.
Complete Parts IX to XII if they apply
Part IX gives base erosion and anti-abuse tax information (gross receipts, payments, tax benefits); Part X shows the character and source of income and deductions for foreign partners; Part XI covers section 871(m) covered partnerships; Part XII covers a QDD's section 871(m) tax liability.
Review, download and attach
Check every total, the Parts marked in item C and any statements required. Download or print the completed PDF from FillingPDF and attach it to Form 1065 as described under How to submit.
How to submit Schedule K-2 (Form 1065)
Schedule K-2 (Form 1065) is submitted as an attachment to Form 1065. The form prints no separate mailing address, portal or appointment rule of its own.
- With Form 1065: attach the completed schedule, including every Part you marked Yes in item C and any statements or additional copies of Part VI or Part VIII the form calls for, to the partnership's Form 1065.
- Filing channel: use the channel and address that apply to Form 1065. The form refers to the Instructions for Form 1065 for the Paperwork Reduction Act Notice, and directs you to www.irs.gov/Form1065 for instructions and the latest information.
- Check before you send: confirm that the name of the partnership and its employer identification number (EIN) appear at the top of each page, and that no Part marked Yes is missing.
FillingPDF lets you fill out and download the PDF; submission follows the IRS channels that apply to Form 1065.
Common mistakes to avoid
- Marking Yes for a Part in item C without completing and attaching that Part; the form says to complete and attach it.
- Filing the schedule on its own instead of attaching it to Form 1065.
- Entering amounts in U.S. dollars in Part VIII where the form asks for the foreign corporation's functional currency; only the column for current year foreign taxes is in U.S. dollars.
- Skipping the statement in Part VIII when a line has more than one source country, or the separate Part VIII for U.S. source or foreign oil related income.
- Leaving out the separate Part VI by separate category when the income is U.S. source.
- Computing totals incorrectly: line 24 combines lines 1 through 23, line 54 combines lines 25 through 53, and line 55 is line 24 minus line 54.
- Using the wrong lines for the Part IX total: line 19 subtracts the sum of lines 17 and 18 from the sum of lines 7 through 16.
- Entering amounts on lines marked Reserved for future use.
- Submitting an amended schedule without checking box D(1), Amended K-2.
- Omitting the PFIC election and summary details in Part VII, or entering PAS in Part VIII item B without the grouping in item C.
Frequently asked questions
What is Schedule K-2 (Form 1065)?
Schedule K-2 (Form 1065), Partners' Distributive Share Items - International, is an IRS schedule attached to Form 1065. The partnership uses it to report international information, such as foreign tax credit limitation amounts, foreign taxes, PFICs and section 960 income of foreign corporations.
Is Schedule K-2 (Form 1065) filed separately from Form 1065?
No. The form says to attach it to Form 1065, and it prints no separate address or due date. It is submitted with the partnership's Form 1065 through the channels that apply to that return.
Do I have to complete all 12 parts of Schedule K-2?
No. Item C asks for each of Parts I to XII whether the part applies. You complete and attach a part only if you answer Yes. Use the Instructions for Form 1065 at www.irs.gov/Form1065 to decide which parts fit your partnership.
Where do I find the instructions for Schedule K-2 (Form 1065)?
The IRS publishes instructions and the latest information at www.irs.gov/Form1065, the address printed on the schedule. The Paperwork Reduction Act notice on the form also refers to the Instructions for Form 1065.
How do I correct a Schedule K-2 that I already submitted?
Complete a new schedule and check box (1), Amended K-2, in item D on page 1. Box (2) beside it is reserved for future use. The form gives no separate address for amended schedules, so check the Form 1065 instructions.
What is line 55 of Schedule K-2 (Form 1065)?
Line 55 in Part II is net income (loss). You get it by subtracting line 54, total deductions, from line 24, total gross income, for each column. Line 24 combines lines 1 through 23 and line 54 combines lines 25 through 53.
Can I fill out Schedule K-2 (Form 1065) online?
Yes. You can fill out the PDF online on FillingPDF and download or print it. FillingPDF is an independent service and does not file the schedule with the IRS; you submit it with Form 1065 through the IRS channels.
Which parts of Schedule K-2 deal with the foreign tax credit?
Part II, Foreign Tax Credit Limitation, covers gross income, deductions and net income by category. Part III, Other Information for Preparation of Form 1116 or 1118, adds apportionment factors, foreign taxes and other tax information.
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