Hi all. I have a trust k-1 showing foreign taxes paid (as divided withholding). I'd like to claim the foreign tax credit for these, but there are several redundant-sounding boxes in the Turbotax interview and I'm unsure for which ones I'm expected to enter this amount. I understand, in general, how the foreign tax credit works, i.e. it's based on the amount of foreign income divided by total income, but the Turbotax questions are vague.
I entered the amount of foreign tax in Box 14B, but then it seems to ask for it again. The confusion starts with the page that says "Enter the foreign tax information as shown on box 14" from the trust. There are three boxes for "other deductions:" total, foreign, and US source. I want to claim the credit, so I assume this would be left blank, but since you can also take a deduction for foreign taxes in lieu of the credit, should I enter the foreign tax amounts here, or not? Turbotax doesn't specify what these "deductions" may relate to, but since they're under foreign taxes, I assume that's what they'd be for.
Then there's a page for "foreign taxes accrued." I assume this relates to the cash vs. accrual accounting alternatives. To keep things simple, I want the cash method, but it doesn't let you specifically choose that anywhere. So should I enter the amount here, also, or leave it blank?
Basically, I need to know if entering foreign taxes in box 14b is enough to get me the credit without double-claiming, or if these other boxes are necessary.
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ADDENDUM:
A related question would be, what actually defines "foreign income?" For instance, some jurisdictions (ex. UK) don't tax dividends paid to US investors at all. So if a stock you hold is UK-domiciled, does that alone let you count its dividends as "foreign income" for purposes of the numerator of the fraction described here: https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit-how-to-figure-the-credit
Doing so would effectively pad the amount of credit you're eligible for with respect to taxes paid on all other foreign holdings for which there is withholding tax. This seems fishy, since no foreign tax is involved for the UK-domiciled companies, but far be it from me to turn down a smaller tax bill.
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