topic Form 1116 line 18: I find an amount lower than the expected one from 1040, line 10. Should I manually force the correct value on the form ? in After you file

Form 1116 line 18: I find an amount lower than the expected one from 1040, line 10. Should I manually force the correct value on the form ?

windbreiz — Sat, 01 Jun 2019 21:11:22 GMT

This line 18 is supposed to simply carry the amount from Form 1040 line 10. I find no justification for a different value.

Line 18 may have had adjustments. Put the pointer over th...

rogge1722 — Sat, 01 Jun 2019 21:11:24 GMT

Line 18 may have had adjustments. Put the pointer over the entry and right click. On the box that appears, click on "data source." Another box will appear with detailed info for the entry.

Thank you for reading and answering the question. The Mac...

windbreiz — Sat, 01 Jun 2019 21:11:25 GMT

Thank you for reading and answering the question. The Mac doesn't have the data source menu, but double clicking on the entry opens the 1040 Worksheet and points to the **correct** value of 1040 line 10. So, no apparent adjustment (which are not mentioned anywhere in the 1116 instructions.

Now, if I override the value, Turbotax tells me I can't do electronic filing!
This looks like a bug. Never happened before. I need Turbotax help.

Line 18 adjustments are outlined in the f1116 instruction...

rogge1722 — Sat, 01 Jun 2019 21:11:26 GMT

Line 18 adjustments are outlined in the f1116 instructions on p21.

MANY THANKS to rogge1722. I spent half a day on the phone...

windbreiz — Sat, 01 Jun 2019 21:11:27 GMT

MANY THANKS to rogge1722. I spent half a day on the phone with Turbotax CPAs and Tax Lawyers to conclude it might be a bug. But when I followed the worksheet for Line 18 adjustments, I found the exact amount that Turbotax calculated. No documentation that I could find on this in Turbotax.

@rogge1722: It is possible that on Windows, the right cli...

windbreiz — Sat, 01 Jun 2019 21:11:28 GMT

@rogge1722: It is possible that on Windows, the right click to "data source" might point to the worksheet. This doesn't seem to work on Mac OS.

One way to verify that adjustments were made is to bring...

rogge1722 — Sat, 01 Jun 2019 21:11:29 GMT

One way to verify that adjustments were made is to bring up the f1116 worksheet. Scroll down to  the "Form 1116 Line 18 adjustment smart worksheet" box. If "C" is blank, then an adjustment was made.

Here is a copy of a hypothetical payer that would appear in the "data source". for windows.
_____________________________________________________________________________________
Form 1116 (COPY 1) : Line 18
Part III, line 18:

if this category of income is lump-sum distribution (box e), from the lump sum distributions smart worksheet:
Form 1116 (COPY 1) Line C
If this category of income is Section 901(j) (box c) this line will be blank.
If tax is calculated not using Schedule D Tax Worksheet or the Capital Gain Tax Worksheet or the Adjustment Exception applies, from:

1040 Wks AGI less deduction amt 588,000.

Otherwise, from Form 1040, line 10 reduced by the following amounts from either the Schedule D Tax Worksheet or the Qualified Dividends and Capital Gain Tax Worksheet (if used):

If tax is computed using the Schedule D Tax Worksheet:

  - Sch D Tax Worksheet, line 40 multiplied by 0.2432
  - Sch D Tax Worksheet, line 37 multiplied by 0.3243
  - Sch D Tax Worksheet, line 31 multiplied by 0.4595
  - Sch D Tax Worksheet, line 28 multiplied by 0.5946
  - Sch D Tax Worksheet, line 20

Schedule D Tax Worksheet Line 40
Schedule D Tax Worksheet Line 37
Schedule D Tax Worksheet Line 31 162,200.
Schedule D Tax Worksheet Line 28 237,800.
Schedule D Tax Worksheet Line 20 0.

If tax is computed using the Qualified Dividends and Capital Gain Tax Worksheet:

  - Qualified Dividends and Capital Gain Tax Worksheet, line 22 multiplied by .4949
  - Qualified Dividends and Capital Gain Tax Worksheet, line 19 multiplied by .6212
  - Qualified Dividends and Capital Gain Tax Worksheet, line 11

Qualified Dividend and Capital Gain Tax Line 22 162,200.
Qualified Dividend and Capital Gain Tax Line 19 237,800.
Qualified Dividend and Capital Gain Tax Line 11 0.

@rogge1722: I see from your comment that Windows 'data so...

windbreiz — Sat, 01 Jun 2019 21:11:30 GMT

@rogge1722: I see from your comment that Windows 'data source' right click provides the method of the IRS line 8 worksheet. That is missing in the Mac version of Turbotax.

What seems to be missing is also some guidance about line 18 adjustment election and exception. It took me some time to understand (assuming I read i1116 correctly) that you may be required to use the adjustment, but that you could take the exception if you qualify for it.

Apparently, Turbotax may tell you in Form 1116 Line 18 adjustment smart worksheet that you qualify for the exception, and then lets you decide (in the 'Foreign Qualified Dividends and/or Capital Gains Adjustment Smart Worksheet') whether you will make adjustments or not. This is right, but I had to learn the logic and consequences of that choice.