Deductions & credits
I am having the same issue as described in this thread. Seems like there was no resolution for how to determine
I have a Federal Check This Entry error - Form 1116(COPY1) -- FOREIGN TAX CREDIT Comp Wks: Adj Basis of Tot Inv Ast must be entered. How do I calculate this? What types of assets does this include? I need to enter it (cannot bypass with simple calculation for under $600 etc). The foreign income is all through dividends earned from holding ETFs such as VWO and the gross foreign source income exceeds $5,000. So it seems form 1116 line 4b must have interest expense (which is already imported). The question is around how interest expense is apportioned separately using an “asset method.” Our only foreign income sources are of passive income type and through ETFs only and not K1 etc
Question 1: Should the numerator basis (basis for all foreign income generating assets) be basis for all such assets owned owned as of Dec 31 2020 (open and closed lots)?
Question 2: Should the denominator be basis for all assets held in all taxable accounts as of Dec 31 2020 (even those simply being held for future growth) no matter when they were purchased). Or is it only all assets generating dividends?
See screenshot below. Thanks for your help.
