I have 967$ in foreign tax credit that is from mutual fund dividends. During the questionnaire on foreign tax credit I marked RIC and used my 1099 Div statement from my Vanguard Brokerage to calculate the dollar amount from foreign investments.
I have done this in previous years with no problem but this year I am being asked to fill out an explanation statement for form 1116, "It must show the other deduction items for Line 3B, Col. A.
I have no idea what this is and why I need to fill this out.
Any help would be appreciated.
Thanks
Yes, this is causing TT to have you fill out the explanation statement because of the income adjustment. In the explanation statement, list the early withdrawal penalty and the amount on the statement. That should satisfy the requirement for completing the statement.
To clarify, when you filled out your Foreign Tax Credit section, did you list any deductions against the gross income when you were completing this section?
I had an adjustment to income that I can see on the overview of my 1040. It says adjustment to income from Schedule 1, line 26 of $168.00. That amount appears on Part II, Adjustments to Income, Line 16 and is a penalty on early withdrawal of savings. This is correct as reported on a1099 Interest form I received from my bank.
If this is the what is causing TT to have me fill out an explanation statement for form 1116, should I state that the explanation is the early withdrawal penalty?
Thanks for your help.
Yes, this is causing TT to have you fill out the explanation statement because of the income adjustment. In the explanation statement, list the early withdrawal penalty and the amount on the statement. That should satisfy the requirement for completing the statement.