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Bobs77
Returning Member

Foreign Source income from dividend percentage question

I have mutual fund that earn $500 in dividends there was approximately $5 taken foreign tax. On supplemental sheet it showed three different percentages to determine the ratio of the dividend not sure which percentage to use

Fgn source Inc ToT 86.44%

 Fgn source Inc qual 34.49%

Fgn source inc adj 65.93%

Do I adjust the dividend amount by multiplying that percentage to the dividend?

 

 

 

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1 Reply

Foreign Source income from dividend percentage question

That $5 should automatically appear in line 20 of form 1040 provided line 16 is at least $5.  The credit amount cannot reduce the tax on line 16 below zero.  If the credit is already posted, no further action is required with regard to foreign tax credit.

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