Hello pk,
thanks for looking into this.
Scenario: foreign qualified dividends with 15% tax paid in the foreign country A as per double taxation agreement. For simplicity, let's assume that you are in the 15% tax brackets for dividends. On Form 1116 regular tax line 1a, the dividend income is multiplied by 40.54%, on AMT is multiplied by 53.57%. This triggers HTKO for regular tax, but not for AMT.
Before entering HTKO, all calculations are correct and line 6 on Form 1116 AMT is correctly zero. As soon as you enter HTKO column name (just the name with no numbers), line 6 on Form 1116 AMT for country A becomes a non-zero number despite the sum of the other lines is still zero. Besides, HTKO column appears in Form 1116 AMT even if not applicable and there is no way to remove the column name.
Now fill-in HTKO column with numbers and add line 13 in regular taxes ('taxes reclassified under HTKO'). Everything is copied across to Form 1116 ALT including line 13. I tried to remove all numbers under HTKO column in AMT which is possible, but in addition to line 6 issue, you cannot remove the values from line 13 making the AMT calculation wrong.
Thanks,
Gianluca
