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@AmyC - thank you again for the answer.   I did try that - entering correctly a zero basis, but the result - was line 8 still did not populate.  I experimented with entering 50 cents and again entering $5 for the basis, but line 8 again would not populate in any case.    What should I do now?  The net effect is that it is not being taxed, so that is the good news.  But as a result line 14 (total basis for 2025 and prior) is a zero instead of $8000.  Is that OK for future form 8606's?   Do I need to get this fixed?

Yes, this does need to be reported on your US tax return.  Here is how to report and claim a foreign tax credit for taxes paid in Canada.    Since a LIRA is a foreign retirement account, it doesn't have a standard US 1099-R form. The "Miscellaneous Income" method is generally the smoothest to avoid e-file errors.   Go to the Federal tab and select Wages & Income.  Scroll down to the Less Common Income section. Select Start next to Miscellaneous Income, 1099-A, 1099-C. Scroll to the very bottom and select Start next to Other reportable income. Answer Yes to "Any Other Taxable Income?" Description: Enter "Canadian LIRA Distribution." Amount: Enter the Gross Amount (the total before the 20% was taken out) in USD. To claim the foreign taxes paid as a credit:   Go to Deductions & Credits.  Scroll down to Estimates and Other Taxes Paid and select Start next to Foreign Taxes. Answer Yes to "Did you pay foreign taxes?" Continue through the screens until you reach "Do You Want the Deduction or the Credit?" Select Take a Credit. Select Income Type: Choose Passive Income (this is the correct category for most one-time retirement withdrawals). Add a Country: Select Canada. Enter Gross Income: Enter the same Gross USD amount you entered in Part 1. Enter Foreign Taxes Paid: Enter the 20% amount (in USD) that was withheld. Enter the Date Paid (the date the bank sent you the money). Continue through the interview until you reach the Foreign Tax Credit Summary to confirm the credit is appearing. You don't need to report this on your Canadian return since you are a US resident under the terms of the US/Canadian tax treaty.   [ Edited 02/25/2026 I 3:51pm PST]

Your 1116 has decided it needs to hold information and sometimes importing a 1099-DIV will make the program confused into thinking it is all foreign. Follow these steps to fix your synchronization issue: Switch to Forms mode Delete all the worksheets that go with the foreign tax, so Form 1116Wks definitely must be deleted.  Delete Form 1116 Look at the 1099-DIV worksheet, anything red? Delete it Open the Federal Information Worksheet Scroll down to electronic filing Part VI and find Foreign Tax Credit Uncheck the box that says Check to form Form 1116 Go back to step by step mode Go to wages and income, to your 1099-DIV You may need to import or manually add When asked about foreign dividends, select RIC (regulated investment company) or Various Foreign source income - enter the portion actually from foreign sources - found in your supplement. This can not be blank and is not the dividend amount. Go to deductions and credits Locate Estimates and Other Taxes Paid Select Foreign tax credit Do you want the deduction or credit? Select credit Was your foreign income under $600, select Yes

You can find out when any individual tax forms will be available by using this link.   It says that the 8915-F - which is the version of the form for 2025 - is currently ready.  What problems are you having when you try to enter the information?  

Yes I am converting the full amount so maybe where I am getting confused is that I put zero in that screen pictured but I have not filled out the 8606 correctly every year showing the full conversion each year but maintaining a zero basis.

This appears to be information input by the preparer of the IRS form 1099-R.   IRS form 1099-R Instructions states:   Box 9a  Your Percentage of Total Distribution    If this is a total distribution and it is made to more than one person, enter the percentage received by the person whose name appears on Form 1099-R. You need not complete this box for any IRA distributions or for a direct rollover.

If this is an outstanding system issue, it may be fixed soon; due to system updates and recent tax law changes, returns including foreign tax credit and/or Form 1116 should not be filed at this time. The expected date of availability is 2/27/2026, Friday. On or about that date, you will be able to complete and e-file your tax returns. We appreciate your patience while this is resolved.    If your issue is not resolved by the foreign tax credit software update, then you can @ one of us in this thread to begin troubleshooting. 

That is more helpful. I’ll look into Forms mode. I know what the numbers should be (calculated them on the side. I’m a finance (not CPA!) professional) but I don’t know how to force them in TT. Thank you for the idea.

Yes, but if you move them to a Roth,  there would be no nondeductible contributions left in your traditional IRA.    If you make a nondeductible traditional IRA contribution, then convert the entire balance to a Roth account - you have no basis in the traditional account.     Are you converting the full amount?   If so, zero is good there.