Foreign Tax Credit

Navillus · ‎March 21, 2020

I paid foreign tax resulting from dividend income from a foreign stock and also from a Vanguard International Stock fund distribution. My TurboTax return shows the one from the foreign stock is shown on Schedule 3 Part 1 as a foreign tax credit. The Vanguard item is reported as foreign taxes on Schedule A Line 6. Is this okay or should they both be in the same place?

LinaJ2020 · ‎March 21, 2020

Yes, this is okay.

By law, you can claim either a tax credit or a deduction on the foreign tax you pay. It is allowed to have a credit calculated on Schedule 3 from one set of foreign tax and deduction on the Schedule A from the other amount of foreign tax separately. As long as there is no double-dip, you are good to go.

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