Can I correct the last year's amount of the carryover foreign taxes directly on Line 1 of the Sch.B of the Form 1116?

[Mary67]

I realize that on the Schedule B of Form 1116: the carryover foreign tax credits (due to excess of  foreign taxes) for the previous year are wrong.
Can I just correct them on this year return  ?
Should I alter directly the amount on the line 1 of the Schedule B of form 1116?
Or should I use lines 2 b, c, d, ... ?
(everything else on my last year's return is correct...)
Thank you.

[Mike9241]

line 2 is for specific type of adjustment under sec 905(c).  just change line 1

[Mary67]

Thank you for your fast answer. 

Would this unexplained change trigger an audit? Is it allowed? 

Thank you again.

[ErnieS0 · Accepted solution]

It is allowed. Whether it may trigger an audit depends on what was entered last year @Mary67.

If the wrong amount was carried over from 2020 to 2021 then there is no reason for an audit.

If you made a mistake in calculating the carryover on your 2020 return, then you should (1) change the carryover amount on 2021 and (2) amend 2020 to show the correct, matching number.

[Mary67]

Thank you, ErnieS0. This is really helpful.

Here is the feedback for the TurboTax behavior that led to this mistake:

In my case (income re-sourced by treaty), the income subject to the double taxation was equal to the AGI. However, the income taxed by the foreign country was larger (it included all the SS benefits plus the stimulus checks). The questionnaire for the foreign income comes before I am aware of the taxable part of my SS benefits. Therefore I entered the actual income taxed abroad and the actual foreign taxes paid. 

When the software prompted that only the AGI can be taken into account, I accepted it. No prompts followed that I have to adjust accordingly the foreign tax reported as covered by the treaty, nor the software automatically re-calculated these. Perhaps these should be added. Thank you.