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Deductions & credits
Regarding non-dividend income, specifically capital gains, here is the key part in the IRS documentation regarding not needing to file 1116: "Capital gains not related to the active conduct of a trade or business are also generally passive income." This indicates to me that cap gains from buying and selling shares of a foreign fund/ETF are passive income, and as long as you paid <$300 in foreign taxes you're good not to file a 1116. If the capital gain is related to your business or work, apparently it's non-passive.
This does make it easy for most of us paying <$300 in foreign taxes. On the TT version 2 weeks ago I ticked the foreign income description as "other" because I had both cap gains and dividends. This locked me into a partially filled out form 1116. And yes I went over all 3 1099-DIVs I had and meticulously added up all the foreign gains-oy. Then when I started to realize I might need the 1116, I tried changing the income description to "dividend"-- but the 1116 would not go away. So I deleted the whole return and started over. The latest version just tells me I can file without the 1116 and it does not ask for a description of the income besides if it's on a 1099-DIV. It makes no mention of non-passive gains. So it works for most of us now. If you need to file a 1116, hopefully that's solved 3/3-I say good luck but don't hold your breath. Now it turns out things are improving, but....the whole experience has been frustrating, time-consuming and very slow. I wonder if HR Block software has found this issue so vexing. To fully understand this whole thing, I had to read/research the tax code and look up terms for hours. For you guys that really need the update due out 3/3 I say good luck but don't hold your breath. The K-1 experience was just as bad.