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Foreign tax credits

Periwinkle65 — Fri, 12 Mar 2021 20:33:34 GMT

Why is the entry of a country on the Foreign Tax Credit worksheet marked as an error? I listed Canada for foreign source income of Enbridge stock and the entry is considered an error. On Form 1116 I was advised by the IRS to list all passive income in one column, listing the sources as "various." How then do I clear the error on the worksheet?

Re: Foreign tax credits

rogge1722 — Fri, 12 Mar 2021 21:35:51 GMT

There appears to be a conflict. You listed Canada as the source somewhere and then listed Various on form 1116. Where did you read that the IRS wants all passive income in one column? The instructions for form 1116 clearly state that you report on a country by country basis; each column represents only one country.

Re: Foreign tax credits

Periwinkle65 — Sun, 14 Mar 2021 18:22:48 GMT

Thanks for your rapid response. In this, you had assumed from the instructions that foreign source dividends had to be listed in separate columns by country.

In my case, this would be a cumbersome exercise since over 20 columns would be required! Thus, I have checked twice with the IRS and was told to list all passive income (e.g., dividends) in a separate column and all RIC income in a different column. Last month a TT accountant confirmed that this was the method currently recommended by the IRS.

As to the worksheet discrepancy, I may have solved my own issue. Since the error refers to the worksheet, m filling in "various" would clear the conflict with the final form. I assume that the worksheet is simply that.

Again, I appreciate your response and welcome any further comments or advice.