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Deductions & credits
@BlackPanther2020 , the safe harbor of $600 ( when filing MFJ) in foreign taxes paid on passive income allows bypassing form 1116 and its computations. Outside the safe harbor one must use form 1116. On the other hand as an example if the total foreign taxes paid is $800, it may be more better to claim on $600 and thus avoid the limits imposed by form 1116. You have to work it out both ways to see which helps you more -- there is no requirement that you must claim all the foreign taxes paid -- you try to maximize the credit.
Do you need more help on this ?
May 21, 2020
8:37 PM