Form 1116 - Foreign Source Income Entry

[K9baddog]

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"?

[MinhT1 · Accepted solution]

For purposes of form 2116 - Foreign Tax Credit, the foreign source income to be reported is the total foreign income of $29,246.67.

[CAMORALES]

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?

[ReneeM7122]

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.

@CAMORALES

[Periwinkle65]

Just to confirm for 2023, can I only include a total of QUALIFIED dividends for foreign source income in each brokerage account? 

Thank you! 

[AmyC]

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.