Foreign taxes reported on K1 not flowing to sched 3

[leenaud1]

I have several sources of foreign taxes paid, 1099DIV and 2 K1s . All are small amounts adding up to about $332. Whatever I try, the amounts on the K1 do not flow to sched 3. I would override the amount on sched 3 if I could but it does not let me. Does any one have any suggestions

[Mike9241]

if you are single then since the FTC is over $300 you need to complete form 1116

on 1099-DIV you would link to form 1116 column A

on 1065 k-1 you would need to complete the subsection for FTC. and link to column B pf form 1116

[leenaud1]

Forgot to mention that we're filing jointly.

[leenaud1]

The only way around it, I found, was by manually entering the amounts on sched. 3

[Irene2805]

After entering the information from your K-1, you need to go through the Foreign Taxes part of the interview to calculate the credit.  Please follow these steps:

1. Click on Federal  > Deductions & Credits
2. Scroll down to the Estimates and Other Taxes Paid section and click on the box next to Foreign Taxes. 
3. On the Foreign Tax Credit screen, click on the Yes box.
4. On the Before We Begin screen, click on the Yes box.
5. On the Do You Want the Deduction or the Credit screen, click on the Take a Credit box.
6. Continue through the screens.  You will be asked to select the country where you earned the income.  [You can select various if you worked in more than one country.]
7. On the Other Gross Income - [country] screen do not re-enter your W-2 income.
8. On the Foreign Taxes Paid - [country] screen, enter the amount of foreign taxes you paid.
9. You will be brought to the Country Summary.  Click Done.
10. You will eventually be brought back to the Foreign Tax Credit Summary.  If you need to report foreign tax paid on another category of income (e.g. investment) click on the Add a Foreign tax link.  Otherwise click Done.
     

[leenaud1]

Thanks for taking the time trying to help me. This is exactly what I have been trying to do. I have 2 trusts, in country various. I just keeps me in a loop:

Do you want deduction or Credit

Credit

Income from foreign countries

Various

Report Income

Then the 2 trusts show up each with a check box

I select both

Because I did enter that information already from the K1 sheet it asks me if I want to review

Yes

Brings me back again the Various

and I'm back in the loop

Baffled!

[LinaJ2020]

Check "No" to question asks if you want to review. 

When you answered Yes, it takes you back to the beginning to review your entries. 

@leenaud1

If you have paid taxes to both foreign and the US tax authorities, the IRS allows you to claim a foreign tax credit on a Form 1116 along with your US tax return.  The amount will show on Schedule 3 line 1 and line 20 on Form 1040.  

[mgfrobozz]

I had a similar problem after I entered two K-1s (call them "A" and "B") for two trusts. The gross foreign income from A flowed through to my 1116, but the gross foreign income from B did not. I then noticed that A had a box 14 B entry, and that B did not

I contacted our CPA, who said that because the beneficiary allocation of some assets from B was not in equal parts, her software would not allocate the foreign taxes to the beneficiaries, and it would have cost more to fix it than the tax credit was worth.

I double-checked B's 2021 1099-B, verifying that foreign taxes were paid, then experimented by adding a box 14 B entry on B's K-1 in turbotax. I found that if code B was present, and set to $0, then the gross foreign income would flow to the 1116.

I was worried that the IRS would gripe about the K-1 not including the code B entry, but when I went back to the K-1 in "Forms" after the value had flowed through to the 1116, the code B entry had disappeared (probably because it was $0), so it appears to be ok.

[maknyc]

I had the same issue with K-1 Foreign Tax Paid not flowing thru to Form 1116 or Schedule 3.  Spent two hours on phone with Intuit.  They acknowledge the software bug.  Unfortunately there will be no automated fix for this years due date.  I also planned on overriding the foreign tax paid onto 1116 and schedule 3 but then TurboTax warns against filing electronically due to the various forms not being in sync.  This years software was definitely not vetted thru quality control.

[mgfrobozz]

One of the problems this year: the IRS finished the details for form 1116 very late, with the result that TurboTax was finally able to get the form out only on 2022-03-04. After it was installed, all of the flow-through from the other forms was broken, I think because the other forms were designed to assume 1116 would receive the data. I had to do a lot of fix-up, and the final detail was getting the flow from my the K-1s for my trusts fixed up (see method above). 

I'd allocate blame equally between IRS (codification sent late to Intuit) and Intuit (minimal testing before release). Can probably also blame the US Congress for last-minute changes sent to the IRS, which is badly under-staffed.