1. While he did not receive the dividend or distribution from a Mexican corporation, this company paid tax to Mexico's gov.
So, I thought that he have to report form 1116 because he is a 70% shareholder in this corp.
2. I am currently preparing both his personal tax return and the partnership tax return in which he owns 50% interest.
My plan is to first report his business income in Mexico on Form 5471 and form 1116 in his personal tax return, and then
report form 1116 to K-2 of the partnership.
3. If, as you say, he doesn't need to report Form 1116, I don't think he needs to report K-2 either. Is that correct?
However, Form 5471 still has to be reported.