My return was rejected by the IRS because Form 1116 does not have an explanation statement for line 3b (other deductions not definitely related to the foreign income.) The weird thing is that TT automatically created the explanation statement and did submit it.
I think the issue is that my return has two versions of this Form 1116, one for regular tax and one for AMT. Maybe IRS wants to have a separate explanation statement for each form?
When I use the Forms View in TT to see all the forms, I can see that the auto-generated explanation statement is attached to the regular tax version of Form 1116, but it is missing from the AMT version of Form 1116.
I can't figure out how to manually add an explanation statement to the AMT version of Form 1116, because TT thinks that the existing explanation statement applies to both forms!
If I ask TT to create a new explanation statement then it wants to create a brand new Form 1116 as well, because it thinks that the current Form 1116 already has an explanation statement. How to resolve this?
This is the error I received from IRS e-file:
"F1116-013 - If for any country in Form 1116, Line 3b 'OtherDeductionsNotRelatedAmt' has a non-zero value, then [OtherDeductionsNotRelatedStatement] must be attached to Line 3b."
And this is the explanation statement that TT auto-generated for the regular tax version of Form 1116: "Balance of deductions from income not claimed as definitely related on line 2"
The statement is labeled "3, A", meaning that it applies to line 3a. Could that be the issue? IRS is complaining about line 3b. But TT only provides a way to add an explanation statement to line 3a-d as a whole.
