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Discouranged
Level 2

Foreign Tax Credit for Inherited IRA RMD?

I inherited my mother's conventional IRA several years ago.  I receive a taxable RMD annually from that inherited IRA.  A publicly traded mutual fund in the portfolio paid foreign taxes in 2020.  Am I allowed to take a foreign tax credit for the foreign taxes paid on my shares of that security in that IRA?  The 1099-R doesn't have a column for foreign taxes paid but the mutual fund (Vanguard) lists foreign taxes paid data for that security on its foreign taxes paid tax information chart.  If it affects the answer, for information, I'll be taking a foreign tax credit for other foreign taxes paid by some of my non-inherited investments.

2 Replies
dmertz
Level 15

Foreign Tax Credit for Inherited IRA RMD?

No.  Your (inherited, in this case) IRA, not you, was the owner of the fund that was subject to this tax.  The IRA is a tax-exempt entity, so the IRA receives no tax benefit for having paid foreign taxes.

Discouranged
Level 2

Foreign Tax Credit for Inherited IRA RMD?

Thanks!

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