F1116 FTC 1099-DIV: Gross income from a foreign country

[lesliesalt]

If my foreign-sourced-income, i.e., no US income, managed account's 1099-DIV shows both taxed and untaxed income from the same country, do I include the untaxed income in the gross income from the country? Example:

Foreign-sourced 1099-DIV INCOME & Foreign Tax PAID & NOT Paid in taxed countries
	TAXED	NOT TAXED
Country	Div Dist Non-Qual	1b Qual Div	1a Ord Div	Frgn Tx Pd	Div Dist Non-qual	1b Qual Div	1a Ord Div	Frgn Tx Pd	TT  F1116  Foreign Inc
Germany		310.73	310.73	81.93		45.17	45.17	-	310.73 or   355.90?
Australia	-	6.14	6.14	0.07	-	465.02	465.02	-	6.14 or   471.16?

[lesliesalt]

Table didn't post correctly.

1st set of columns, Div Dist Non-Qual, 1b Qual, 1a Ord & Foreign tax paid, is for the TAXED income. 

2nd set of columns, Div Dist Non-Qual, 1b Qual, 1a Ord & Foreign Tax Paid, is for the UNTAXED income. 

[pk]

@lesliesalt , generally for purposes of computing  allowable FTC, the foreign source income includes ALL income whether taxed  by the foreign taxing authority or not.  Note that this total Foreign Source income is used to compute the Foreign income to world income ratio ( used in allocating US tax on the same doubly taxed  income ).

Does this make sense ?

Is there more I can do for you ?

[lesliesalt]

Thanks, CHAMP pk Level 15!

I understand.

I empathize with the rest of you trying to get the foreign tax credit against federal tax you deserve! It has become its own support group; really, we're not as stupid as this part of using TT makes us feel. (I used to work for the federal tax agency in a very different area.)

I spent a good part of today, and many other days, reading about FTC, F1116, IRS Publications and Instructions, and TT Community posts. This is not my first year reporting foreign-sourced investment income and foreign tax paid. As many others have stated, I certainly would like TT to explain more completely and to improve the FTC interview.

I'm one to work a detail to the ground, but I don't think the FTC and the tax savings of a Separately Managed Account (SMA) international income, tax-managed account is worth the over 40 hours this year that I have wrestled to get the countries to "stick" in TT in the correct order.  Countries disappeared, and after learning how one could delete forms (from TT Community, not from TT) I couldn't delete the last, COPY 1, blank F1116 to start over. I entered each country as a separate 1099-DIV, then one country kept jumping ahead of the separately-reported RIC on F1116, or not showing at all, even though it showed in the correct TT "interview" order.

I've just spent ten hours going through the 53 pages of "Details of 1099-DIV Transactions" to go online to look up the country of each company and to manually record the amounts of the different types of dividends on which foreign tax was NOT paid by making spread sheets of 1a Ord Div, 1b Qual Div, Non-qual Div Dist. The Supplemental Information does not list income by country except for that on which tax was withheld on the "Foreign Income and Taxes Summary".

Then, I added the info. to the spreadsheet I previously made to be able to enter the countries with foreign income on which tax WAS paid in the correct order into TT. Then, I reconciled the two with Fidelity's 1099-DIV.  If Fidelity's 1099-DIV supplemental information showed the countries, and if one could export to a spreadsheet, it would process so much more easily.

I'm steeling myself to dive back into TT to amend the 20-country information and to add the 5 countries with foreign income but with no foreign tax paid. I fear my "Arghh!" isn't over yet!

Also, I should probably look at former years' information and tax returns to decide to amend them or to let the carryover ride since I previously entered only Fidelity's "Foreign Income and Taxes Summary" for my Form 1116 data, not the complete foreign income.

I sincerely appreciate the responses that all of you have honed over the years. I've read the F1116/FTC questions and answers; I've saved a lot of them in my Tax General Questions FTC computer file so I can find them more quickly in the future. Especially thank you, rogge1722 Level 9, for repeatedly answering the same FTC - F1116 questions. -Too bad the Q&A can't be more tightly grouped.