I followed the advice of AnnetteB6; downloading 1099-DIV, I completed the form showing the Chilean Dividends as ordinary Dividends and the Foreign Tax paid to the Chilean government.
Turbo Tax treats the Tax paid as a reduction of the Taxable Income. Furthermore, it becomes part of the standard reductions, which means I got only $10,000 plus the Chilean Taxes of $27,222, for a total of $37,222 as a reduction of the Taxable Income. The software is not filing form 1116.
Because is a treaty between the US and Chilean Goverment, I understand that Foreign Tax payments will be offset against the U.S. taxes on a dollar-per-dollar basis. Now, I am suffering double taxation over the same Income.
Can you help me?
Thanks
