• US S Corporation with 2 US Individual Shareholders
No foreign transactions in ordinary course of business
S Corporation has an investment account which holds foreign stock and receives $ 400 of foreign tax credit a year . The foreign income and tax is reported on Form 1099 to the S Corporation . Each shareholder receives $ 200 of foreign tax credit .
S Corporation notifies shareholders on January 10 , 2023 they will not receive Schedule K-3 unless requested
Shareholders have no other foreign source income or taxes so they qualify for Form 1116 exemption and notify S Corporation on February 1 , 2023 they do not need Schedule K-3 .
S Corporation is NOT required to file Form K-2 and K-3 with the IRS