If you have only one type of foreign income, you complete just one Form 1116. All Form 1116 filers must choose how they regard their income: on a cash basis or an accrual basis.
- If your budget doesn't recognize income until you receive it, you use the cash method. Most individuals use the cash method.
- If your budget records income when you earn it rather than when you get paid, you use the accrual method.
You should go back to your original foreign income entry to resolve the Form 1116 error.
Click this link for detailed info on Form 1116.
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