Foreign Tax Credit - Form 1116 Qualified Dividends

[AlanM71]

I'm trying to take the Foreign Tax credit for taxes reported on a 1099-DIV and a K-1.  It is all passive (dividend) income.  As mutual fund income, its all reported under country RIC.  I get to a screen in the interview for the FTC that asks if the income includes any foreign source qualified dividends.  The screen provides the total foreign income for this category (based on the information provided in the 1099-DIV and K-1 sections.  It then asks for the amount of foreign qualified dividends and LT capital gains.  When I enter the total for qualified dividends (as provided in the 1099-DIV brokerage reports, I get the message that "This field should be at least $xx dollars" with a figure higher than the sum of the qualified dividends that were reported.  Why, and how do I fix?  On the Form 1116 worksheet, the dollar figure gets entered in Part I line h (Qual. Dividends and LT Capital Gains) and gets highlighted as an error.  What determines what that number "should" be?  Am I entering the wrong figures?

[rogge1722]

From the 1099-DIV Worksheet.

The minimum foreign qualified dividends = 1b +7d -1a.

The following procedure provides more details.

Open a new spreadsheet.

Column A is used  for both qualified and unqualified dividends, aka. “Ordinary dividends”.

Column B is used for qualified dividends only.

In cell A1, insert the worldwide ordinary dividends. This is the amount in the 1099-div, box 1a.

In cell A2, insert the foreign ordinary dividends. This amount is derived from the broker’s supplemental info.

In cell A3, subtract A2 from A1.  The result is the U.S sourced ordinary dividends.

In cell B1, insert the worldwide qualified dividends. This is the amount in the 1099-div box 1b.

In cell B2, insert the foreign qualified dividends. This amount is derived from the broker’s supplemental info.

In cell B3, subtract B2 from B1. The result is the U.S. sourced qualified dividends.

Each cell in column A must be equal to or greater than the corresponding cell in column B. If that is not the case then there is an error. Recheck all entries.

[AlanM71]

Thanks for the reply - this helped to highlight the issue, which was that Fidelity's summary of the foreign income and taxes on the year-end tax reporting statement did not break out the qualified dividend amounts for one of the mutual funds reporting foreign-source income and taxes.  As a result, a portion of the qualified dividends (which were reported on the overall dividend summary) were not included in the foreign income summary.  Once I included those additional qualified dividends, I was able to proceed.  So, it pays to check the source.