Foreign tax carryback problem

patamelia — Sat, 30 May 2020 18:50:55 GMT

Foreign tax carryback problem.

I always use 1116 for passive income tax credit.

For 2012-2017 I had a carryfoward of $2938.

In 2018 I paid $0 foreign taxes.

In 2019 I paid foreign taxes of $2238 and used $574, with $4602 for 2012-2018 remaining.

I want to carryback credits from 2019 to 2018.

How can I do this, it seems to not be possible because I paid $0 foreign taxes in $2018.

Is that possible? Or is it because on Form 1116 line 17 was -5574 due to a rental loss.

Note: in 2018, I couldn't use the carryfoward of $2938.

If the carryback is possible- What is the correct way of carrying back: Form 1040X + what else.

A new 1116 -How?

Thanks for any help.

Re: Foreign tax carryback problem

rogge1722 — Mon, 08 Jun 2020 13:30:18 GMT

Here is the “Overall FTC Limitation Formula.”

FTC Limit (Line 21) = U.S. Tax Liability (Line 20) x Foreign Taxable Income (Line 17) Worldwide Taxable Income (Line 18)

Notice that if Line 17 is zero, The FTC Limit would be zero. If Line 17 is negative, the FTC Limit would be negative which is meaningless. Since there is no FTC Limit, there can be no Foreign Tax credit. For TY2018, you could not use your carryforwards from previous years and cannot use a carryback from TY2019.

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Foreign tax carryback problem

Re: Foreign tax carryback problem