Foreign Tax Credit Form 1116

[koars]

I am having a problem inputting all of the information for a foreign tax credit (Form 1116).  I have paid taxes in 5 foreign countries from individual stocks and also paid taxes from mutual funds (RICS).  I have been able to enter data for some but not all of these companies and funds.  (3 countries and no RICS).  I use 3 brokerages companies and most of the data (1099 DIV) was input using the TT download feature. I manually input the data on one account.  All of the 1099 DIV data shows foreign income and taxes paid.  I have attempted to input the data in many different ways, but have not been successful in all.  I have concluded that it is some sort of glitch in the TT software, but do not know for sure.  I spoke to a representative, but she was not successful solving the issue.  She suggested that I ask the community.  I found comments concerning the Form 1116, but not the one that specifically addresses my problem.  Hopefully the community can help.

[rogge1722]

You have 6 distinct countries.  RIC’s are considered a distinct country.  A 1099-DIV can serve one distinct foreign country.  I suggest using the 3 1099-DIV’s from the brokers only for domestic sources.  You then will create 6 fictitious 1099-DIV’s.  First delete the foreign tax paid in all 3 1099’s.

Bring up a blank 1099-DIV.  Name it the same as the country it represents. Let’s say it is for the RIC’s, so name it RIC. Next  add up the total  box 1a ordinary income and the total box 1b qualified income from all sources and the total foreign tax paid from all sources for all RIC’s and insert these into the fictitious 1099-DIV.  Now subtract this total amount in box1a and box 1b from any of the 3 original 1099-DIV’s.

Repeat this for the remaining 5 fictitious 1099-DIV’s.

Make sure that the total amounts in all box 1a’s and box 1b’s and the foreign taxes paid are equal to the original amounts before any changes were made.

When you go to the foreign tax credit interview, you will have 6 payers for 6 countries.

[koars]

Thanks.  I have not done this before and am not sure how to integrate the downloaded data with the new 1099s. or do I have to prepare  separate 1099s for the domestic dividends as well as the foreign dividends?  BTW do you think the problem lies with TT programing or me?

[rogge1722]

The 3 1099's you already have only require the amounts changed in boxes 1a, 1b and the entry in box 7 deleted.  Bring up 6 blank 1099's one at a time and fill in the name, boxes 1a ,1b, and box 7.  When done, you are ready to enter the foreign tax credit interview.

[koars]

OK.  Will give it a try; however, when I talked to a TT rep yesterday he indicated that I needed to wait until 3/25/21 to amend the return (I have not filed it, but went to the print stage to check out the numbers).  Not sure what the 3/25 date signifies, but will wait till then to modify.  Thanks for your assistance.

[LinaJ2020]

As of today, the Form 1040-X is available to use.  See forms availability : Forms

You only need to file an amendment if the changes creates a difference in your total refund and tax due.  If the result remains the same, you do not need to submit 1040-X.  

Also, be aware that the IRS limits the amount of time you have to file an amended return to claim a refund to:

• Within three years from the original filing deadline, or
• Within two years of paying the tax due for that year, if that date is later.