Hello @pk
Quick update: Unfortunately, your suggested solution didn't work for me. I'm using TT Deluxe for Windows.
I successfully deleted the original Form 1116 (Copy 2).
I successfully manually added a new Copy 2 via Forms mode and marked it for Income Re-sourced by Treaty.
Upon returning to Step-by-step and "Editing" Copy 2 I'm still encountering the same issue. Under "Other Gross Income" I'm specifically instructed to not enter income already reported on Forms 1099-INT and 1099-DIV. I can complete all of the questions and I'm never presented an option to re-source that income to Spain. Essentially, the software behaved exactly the same as when I had added the second 1116 using Step-by-step.
I think the biggest reason for this problem has to do with the foreign tax sections of the Schedule B, 1099-DIV (Box 7) and 1099-INT (Box 6) forms. In those boxes (via Forms mode) a link is shown to a Form 1116 copy. If the 1099-DIV form is already linked to the "Passive Income - Copy 1" then it can't be double linked to the "Income Re-Sourced by Treaty - Copy 2". Now, sure, I could manually link the 1099-INT forms to the Copy 2 since they don't have a foreign source component (and they do show up on Form 1116 - Copy 2; I tried it) but that doesn't solve the inclusion problems for the 1099-DIV forms.
So, unless specifically advised AGAINST this option, here is what I did:
1) I completed Form 1116 (Copy 2) using the step-by-step function (again, without being able to enter any Schedule B information)
2) In Forms mode, I opened up the Foreign Tax Credit Computation Worksheet for Copy 2 (1116 Comp Wks)
3) Under Part 1 g - line c "Interest and Dividends from Schedule B", I entered an "Override" Total value which is the total amount from my Schedule B. I also added supporting details with each 1099 listed (and totaling the same as the override value) under Column A for Spain. The adjusted gross income updated to represent the income reported and taxed in Spain.
4) Interestingly, the override broke all the previous 1099-DIV links to the Passive Income - Copy 1. So, I manually relinked every 1099-DIV (with a foreign tax/foreign source income value) back to Copy 1
I checked for errors (none) and reviewed the numbers. I believe it looks good. I'm happy to try some other solution but I really think the problem lies in not being able to link a 1099-DIV to more than one form 1116.
Ideas? Warnings? Or any other thoughts?
Thanks,
Rob
