TurboTax calculates it as per the IRS instructions, and it depends on whether or not you have to file a Schedule D. If you have foreign source qualified dividends or foreign source capital gains (including any foreign source capital gain distributions) or losses, you may be required to make certain adjustments to those amounts before taking them into account on line 1a (gross income) or line 5 (losses) of Form 1116, Foreign Tax Credit.
If you completed the Qualified Dividends and Capital Gain Tax Worksheet in the Instructions for Form 1040, and aren't required to file Schedule D, see Qualified Dividends and Capital Gain Tax Worksheet (Individuals) next to determine the adjustments you may be required to make.
If you are required to file Schedule D, see Schedule D Filers, later, to determine the adjustments you may be required to make.
You can elect not to make the adjustments to your qualified dividends and capital gains if you qualify for the adjustment exception. See Adjustment exception under Qualified Dividends and Capital Gain Tax Worksheet (Individuals) and Schedule D Filers, later.
Foreign Tax Credit Compliance Tips
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