@FranklinF @EleanoreS
Thanks. I’m strongly considering Live Assisted for next year. I have to prepare multiple returns, including two trust returns. I therefore use both Premier for individual returns and Business for the trusts. Would a single Live Assisted subscription allow me to ask questions related to multiple returns across both these products? Or is a separate subscription needed for each return and/or Turbotax edition?
I also have another, last-minute tax question, if I may:
What actually makes a dividend received from a non-US-based company "foreign income" for purposes of the Foreign Tax Credit, from the standpoint of a US taxpayer? Is it simply the fact that it's non-US-based, or must there also be withholding tax levied on it?
Because of how the Form 1116 calculation works, the larger your total foreign income, the bigger the foreign tax credit you’d potentially be able to claim under the limitations. But, not all “foreign” dividend income is taxed, so I’m unsure if it counts. For instance, some jurisdictions (ex. UK, Bermuda) don't tax dividends paid to US investors at all. So if a stock I hold is UK-domiciled, does that alone let me count its dividends as "foreign income" to be included in the numerator of the fraction described here: https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit-how-to-figure-the-credit
The formula is (Total foreign income / total taxable income) X US tax liability = Foreign Tax Credit eligibility. So you can see where I'm going with this.
Doing so would effectively pad the amount of credit I’m 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 if the IRS doesn't care.
