Form 1116 worksheet once again a nightmare

Forum|Forum|3 months ago
February 12, 2026
3 replies
4 views

For years, the form 1116 worksheet has been remarkably bad, and this year's no exception. Once again , the "Income from Foreign Countries" input area allows for selecting several countries (I need six). Then it says "Select a country from the list... on which to report each Form 1099-DIV." That would SEEM to imply info for each country should be entered separately – but Turbotax won't let you do it. Instead, if you select the first country and then click on Report Income and enter the figures for that country alone, the next screen you get says "You've completed reporting all copies of Form 1099-DIV to a country. Do you want to review your entries?" Click Yes and you're back where you started, click No and the only info accepted is what you've already put in for the FIRST country. Finally after reading old threads here I opted to simply use "Various" to cover all six countries and I itemized them and the relevant amounts in supporting details. That ALMOST worked, but I get error messages on the 1116 Comp Worksheet under Part 1, line 4b(1)b and c, which ask for "Adjusted basis of investment assets generating foreign income" and "Adjusted basis of total investment assets." Huh? As of 12/31/25, I assume? And only for the account in which I actually hold foreign securities? Does anyone know the answer to these questions? And Intuit, if you're listening (which I doubt), for the umpth time PLEASE make it possible to actually enter info for multiple countries!

pk_

Level 15

@rcepuch , assuming that you are reporting DIVs from a brokers' consolidated report or from a mutual fund etc., yes you may very well have multiple countries for source income and foreign taxes paid. Absent any other specific situations, you should use Various for the source country name, total Foreign source income and total foreign taxes paid to these countries. Your usage of details in back-up sheet is the best way to proceed.

The basis adjustment is generally not applicable because most often this relates to adjusting the basis to allow for tax treaty based tax rate by the US. Note that the allowable FTC is the lower of actual paid and that imposed by the US and it is also not a refundable credit ( thus may get limited by your otherwise tax liability ).

So , unless you are a directly investing and reaping benefits from foreign source, the adjustment of basis is zero i.e. adjusted basis is the same as the in vested amount ( that generates the dividend/interest / etc. income).

Does this make sense ? Is there more I can do for you ?

rcepuchAuthor

Level 2

Yes, thank you. I am, however, investing directly in foreign stocks. I've tried putting a zero in that box and Turbotax says the number cannot be zero.

Joan2

Level 3

I am having a similar issue, but my foreign source countries are all RIC.

Message reads: Form 1116 (COPY 1) -- Foreign Tax Credit Comp Wks: Adj Basis of Tot Inv Ast shouldn't be less than or equal to zero

gbacchin

Level 4

Indeed!

I cannot submit my return because Form 1116 ALT Line 33 reports 0 instead of the minimum between Line 20 and Line 32. Form 1116 regular is correct instead.

dhawal55

Level 3

Running into same issues and wasted several hours understanding this. There is no help from TT even after paying $80 for their premium service

dhawal55

Level 3

The form 1116 generated by TT doesn't make any sense. For entry 1a, it put some arbitrary number. It is not the Total Foreign Income I entered in the TT questionnaire. 3d has the right "Gross foreign source income". Shouldn't 1a be same as 3d? Is line 1a incorrect and if so, how do I fix it?

Even for line 2e "Gross income from all sources (see instructions)", TT has some weirdly high number that is 4x my gross income.

MarilynG

Level 15

If your Foreign Income was from dividends, you enter the income amount associated with the foreign tax on your 1099-DIV in the Foreign Tax Credit interview. If your have more than one type of foreign income, you'll have a separate Form 1116 for each type of foreign income, but yes, generally Line 1a and 3d would be the same amounts.

If you have excluded foreign income on form 2555, only enter the amount of unexcluded income and related tax in the interview (you may have to calculate). The forms are not linked.

For 'gross income from all sources' the calculation is not easily understood, as some items are added back, so understandable if you don't recognize the amount.

"This is total income before deductions and is the sum of:

Form 1040, lines 1, 2b, 3b, 4b, 5b and 6b plus
Schedule 1 (Form 1040), line 1 plus
Schedule 1 (Form 1040), line 2a plus
Schedule C, line 7 (all copies) plus
All gains reported on Schedule D minus Schedule D, line 11, Subtotal Line A(Form 4797, Gain from Part I) plus
All gains reported on Form 4797 plus
Schedule E, line 3 total plus line 4 total plus
Schedule K-1 Worksheet - Estates and Trusts, Box 14 Code B : Foreign Tax Information section, line 7 (if it has a value); otherwise income reported in Part III lines 5, 6, 7 and 8 plus
Schedule K-3 - Partnerships Line B - Gross income from all sources
Schedule K-1 - Partnership Additional Information page 1, Box 11 section,Code A, line 1 (if positive) and line 3 and line 4 and Code I, line 5
Schedule K-3 - S Corporations Line B - Gross income from all sources
Schedule K-1 - S Corporation Additional Information page 1, Box 10 section, Code A, line 1 (if positive) and line 3 and line 4 and Code H, line 5
Schedule F, line 11 (all copies) plus
Form 4835, line 7 ( all copies) plus
Schedule 1 (Form 1040), line 7 plus
All positive income amounts on the Other Income Statement."