@Sam Hopi just following up:
(a) accrued taxes would mean that you either have the tax bill but have not paid yet or you have calculated the amounts but not paid yet ( may be waiting for the final bill to show up or a bill that is being contested and therefore likely to change). It is like accounts payable -- you recognize that you have to pay but have not paid yet. In tax situation it would generally mean that while you recognize the amount but have not been paid ( could mean that this is an approximation or real or allocated amount but always it has not been paid and closed. Using "accrued" amount as a deduction, it can result in having to file an amended.
Does this make sense in your particular situation?
(b) below is my attempt at an example:
Let us assume that
(a) you are doing a US return for the year 2022 i.e. the UK returns of fiscal year 2021-2022 and 2022-2023 are germane.
(b) your tax rate for the rental income ( average ) is 11.80% for 2021/2022 , 12.0% for 2022-2023
(c) Also assume that everything financially remains the same for the two fiscal years except for the rent form Jan01 /Dec31 for calendar year 2021 is $1100 per month ,that for Jan01/Dec31 of 2022 is $1200 per month and lastly Jan01 /Dec31 of 2023 is $1300 per month.
Thus for UK purposes
1. Gross rental income for 2021/2022 is 9 months at $1100 =$9900 plus 3 months at $1200 =$3600 for a total of $13,500 -- tax at 11.8% =$1593
2. Gross rental income for 2022/2023 is 9 months at $1200 = $10,800 plus 3 months at $1300 = $3900 for a total of $14,700 and a tax at 12% of $1764
Note that for US tax purposes when you file US return ( if you do not ask for extension ) you do not have the final figures from the UK -- thus you would probably use "accrued" and if the final/settled /paid amount to UK is different than the "accrued" you may have to file an amended return. Many people use " extension " and file by 10/15 so that the foreign tax amounts is finalized and no amended return is required.
For US purposes ( tax year 2022):
1. Gross Rental income is 12 months at $1200 = $14,400 and foreign tax allocation = 1/4 of UK 2021/2022 plus 3/4 of UK 2022/2023 taxes = 0.25 X $1593 + 0.75X$1764 = $398.25 + $1323 =$1721,25.
2. on form 1116 your Foreign income = $14,400 and Foreign taxes paid on that income = $1721.25.
Does this make sense ?
Is there more I can do for you ?
pk
