Foreign Tax Credit Multiple countries on one 1099

[Matilda]

I have been reading questions and answers for foreign Tax Credit entry.  Every year Foreign Tax Credit is so difficult.  Here is my problem:

I have three 1099s with Foreign dividends and tax. 

1099 #1 has dividends from three countries on it - Ireland, Canada, UK.   1099 #2 only has RIC.  1099 #3 also only has RIC. 

The first country I enter is Ireland - that works.  I select Ireland then I  select 1099#1.

The second country I enter is Canada and this is where it falls apart.  1099 #1 is not available for me to select for the income from Canada.  Only  1099 #2 and 1099#3 are listed and available to select but they are both RIC only.  

If I enter RIC as the country, turbotax allows me to select both 1099 #1 and 1099 #2 for that.

So you can have one country and select multiple 1099s, but you can't have one 1099 and select multiple countries.

I hope I explained that well enough.  How do I correctly enter three countries from one 1099?

Thank You

[rogge1722]

TT can support only one country per 1099.  Here is a suggested workaround .

This is an example of the preparation to fill out a form 1116 for taxes paid by 3 countries within a 1099-DIV.

They are:

 a: RIC which includes all mutual funds/ETF”s

b: Canada

c: United Kingdom

Three fictitious 1099-DIV’s will be created.  The original 1099-DIV will be used for domestic income only.

Bring up a new blank 1099-DIV.  For convenience name the payer the same as the country it represents. In this case the payer is RIC.  From the broker’s supplemental info, insert into box 1a the ordinary dividends from any and all mutual funds/ETF’s.  In box 1b, insert all qualified dividends from all mutual funds/ETF’s.  In box 7, insert the foreign tax paid from all mutual funds/ETF’s.  That completes the 1st fictitious 1099-DIV.

Bring up a 2nd blank 1099-DIV.  Name the payer Canada.  In box 1a, insert all the ordinary dividends from Canada; in box 1b all the qualified dividends from Canada and in box 7 the tax paid to Canada. That completes the 2nd fictitious 1099-DIV.

Bring up a 3rd blank 1099-DIV.  Name the payer U.K. In box 1a, insert all the ordinary dividends from the U.K.; in box 1b all the qualified dividends from the U.K.  The U.K. does not withhold taxes, but TT must see an amount in box 7 during the interview.  Insert $1.00 into box 7 and subtract $1.00 from box 7 from either of the previous fictitious 1099’s.  That completes the 3rd fictitious 1099-DIV.

On the original 1099-DIV, subtract all the foreign amounts from box 1a so that only the domestic ordinary dividends remain. Subtract all foreign amounts from box 1b so that only the domestic qualified dividends remain. Delete the amount in box 7, the foreign tax paid.

If there are more than 3 countries, TT will automatically generate additional F1116 copies as necessary.

If there are more than 6 countries, the screen with the header “Report foreign tax paid to XXX” will only display up to 6 payers. Additional payers are on the following screen.

[Matilda]

Thank You.  I 

I need to make sure I understand. 

Assume the 1099 with three countries is from Fidelity. 

1. I make a new 1099 -DIV with the information for country RIC and name this 1099-DIV "RIC".

2. I make a new 1099-DIV with information for country Canada and name this 1099-DIV "Canada"

3. I make a new 1099-DIV with information for country U.K. and name this 1099-DIV "U.K."

4. I edit the original imported 1099 DIV titled 'National Financial Services' to not include any of the foreign income and taxes.

So in the Tubotax Income section where I input 1099s I now have three more 1099s but the total data is the same.

I can see how I would now be able to enter all my information for foreign tax credit .  I now have 3 dummy payers and the original payer on 1099-DIVs.  One 1099-DIV per county.  However, It feels wrong to change the actual imported data from Fidelity on 1099-DIV.  Is there ever a check on taxes to see if we report the correct data from each Payer?  My data input for Fidelity would not match the actual Fidelity data.  My overall taxes would be correct just the payer wrong .  I do not want an audit over this.

Thank You for your help.

Final comment on this - Why or Why can't Turbotax fix this???  We should not have to be doing these work arounds every year for a known problem.  Frustrating.

[rogge1722]

If the grand total of the dividends on the 1040 schedule B are exactly as the original amount there will be no problem. I've used this technique for years and never had any problems.

TT is most certainly aware of this issue but for unknown reasons chooses to ignore it.