I have one source of foreign income being dividends paid on an International Mutual Fund I own in a brokerage account. The 1099-DIV provided by the brokerage shows the following:
Line 7 - Foreign Taxes Paid - $2,499.51
Additional details provided in the 1099 are:
Foreign Tax - $2,499.51
Foreign Income - $29,246.67
QDI elligible foreign income $21,082.60
I have selected Foreign Tax Credit option. What amount should be entered in Turbo Tax Premier for the entry requesting "Foreign Source Income"?
For purposes of form 2116 - Foreign Tax Credit, the foreign source income to be reported is the total foreign income of $29,246.67.
My e*trade 1099-DIV Form includes the amount of foreign tax paid, bit not amt of foreign source income. Now TurboTax won't let me file without that information. What can I do?
For the foreign sourced income, you will put the amount in box 1b. These are qualified dividends.
To be qualified, your dividends must be paid by a U.S. corporation or, if a foreign corporation, a tax treaty must exist between the U.S. and the country of incorporation, or the shares must trade on a U.S. stock exchange.
Here is a TurboTax article with more information about form 1099-DIV.
To check if the country has a US treaty, check this IRS link.
Just to confirm for 2023, can I only include a total of QUALIFIED dividends for foreign source income in each brokerage account?
Thank you!
No, you can have capital gains and other income items to create the foreign income. The dividends must be qualified. See Foreign Tax Credit | Internal Revenue Service for more details on income.