Computer-Generated Schedules K-2 and K-3

Generally, all computer-generated forms must receive prior approval from the IRS and are subject to an annual review. However, see the Exception below.

Requests for approval may be submitted electronically to substituteforms@irs.gov or requests may be mailed to:

Internal Revenue Service Attention: Substitute Forms Program C:DC:TS:CAR:MP:P:TP 1111 Constitution Ave. NW Room 6554 Washington, DC 20224

Instructions for Schedule K-2 (Form 8865) and Schedule K-3 (Form 8865) (2025) Catalog Number 35339Y Jan 9, 2026 Department of the Treasury Internal Revenue Service www.irs.gov

Exception. If computer-generated Schedules K-2 and K-3 conform to and don’t deviate from the official form and schedules, they may be filed without prior approval from the IRS.

Important. Be sure to attach the approval letter to computer-generated Schedule K-2 or K-3. However, if the computer-generated form is identical to the IRS-prescribed form, it doesn’t need to go through the approval process, and an attachment isn’t necessary.

Every year, the IRS issues a revenue procedure to provide guidance for filers of computer-generated forms. In addition, every year, the IRS issues Pub. 1167, General Rules and Specifications for Substitute Forms and Schedules, which reprints the most recent applicable revenue procedure. Pub. 1167 is available at IRS.gov/irb/2024-XX_IRB#REV- PROC-2024-XX . The procedures relevant to Form 8865 and Schedule K-1 (Form 8865) apply for purposes of Schedules K-2 and K-3.

How To Complete Schedules K-2 and K-3

Reporting currency. Report all amounts in U.S. dollars except where specified otherwise.

Form references. These instructions refer to other forms. If the referenced form has been succeeded by another form, the references to those prior forms encompass any successor forms.

References to Form 1040, U.S. Individual Income Tax Return, also include Form 1040-SR, U.S. Tax Return for Seniors. Also, when Form 1040 is referenced, the part may be relevant for other tax returns for noncorporate partners such as Form 1041, U.S. Income Tax Return for Estates and Trusts.

When Form 1120, U.S. Corporation Income Tax Return, is referenced, the part may be relevant for other tax returns for corporate partners such as Form 1120-L, U.S. Life Insurance Company Income Tax Return.

and the amount of foreign currency gain or loss on the PTEP that the partner is required to recognize under section 986(c).

Partners report the dividends and foreign currency gain or loss on Form 1040 or 1120. If eligible, partners also use this information to figure and claim a dividends received deduction under section 245A on Form 1120.