Your Form 1116 Explanation Statement should include:
- The foreign tax credit formula you used to calculate your foreign sourced US tax (Foreign Source Taxable Income ÷ Total Taxable Income Before Exemptions) x Total US Tax = Foreign Sourced US Tax),
- If you convert from foreign currency, attach a detailed explanation of how you figured the conversion rate, what dates you used and what converter you used. See IRS Form 1116, instructions, page 3, Foreign Currency Conversion.
- Any other information that may help clarify the amounts on your Form 1116.
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