IRS issues a frequently asked question for pass-through entities to report negative amounts electronically to the IRS on Part II of Schedules K-2 and K-3

IR-2023-162, Sept. 5, 2023

WASHINGTON — The Internal Revenue Service today issued a frequently asked question in Fact Sheet 2023-20 to provide guidance to pass-through entities for electronically filing Schedules K-2 and K-3 to the IRS to report negative amounts.

For tax year 2022 the schema for Schedule K-2 and K-3 do not permit negative values. This FAQ provides guidance to pass-through entities about how to report these amounts.

More information about reliance is available.

IRS-FAQ