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New Member
posted Jun 3, 2019 11:23:13 AM

How can I link foreign rental income from Schedule E to the foreign tax credit (Form 1116)?

My rental income is identified as related to a foreign country on Schdule E but Form 1116 does not link to or see any foreign income. Do I have to manually re-enter each income and expense line from Schedule E on Form 1116?

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4 Replies
Intuit Alumni
Jun 3, 2019 11:23:14 AM

You will need to also enter your foreign rental income in the foreign tax credit section of TurboTax.  You only need to enter the gross rental income for Form 1116, not the expenses.  Please see the following steps:

To report your foreign taxes paid on wages (or other foreign income) for foreign tax credit:

  1. Click on Deductions & Credits
  2. Scroll down to Estimates and Other Taxes Paid
  3. Scroll down to Foreign Taxes
  4. Click 'Yes" you paid foreign taxes
  5. Click through the screens regarding foreign interest and dividends
  6. Click yes that you have reported all your foreign income already in TurboTax
  7. Click that you want to take a credit
  8. Answer question about the Simplified Limitation Election
  9. Choose income type for wages - it will be General category income(pension income is also General category, stocks and foreign rentals are Passive category)
  10. Add your foreign country as the country
  11. Enter description - for example Foreign wages
  12. Enter Income amount that you previously reported in TurboTax- Enter gross rental income
  13. Enter rental expense totals as Definitely Related Expenses
  14. Enter your taxes you paid on your foreign rental in the box "Other income"
  15. Continue through ALL the foreign tax credit screens until done.

Level 2
Feb 26, 2020 8:22:53 PM

I am trying to do this for my 2019 tax return. The program already has some foreign tax from a 1099-DIV allocated, and it is not allowing me to enter any other type of income. This is new -- last year, it worked very well. Is there a way to "start over" and delete the existing foreign tax information, in the hope that the other categories will show up? 

Returning Member
Feb 28, 2021 11:21:19 AM

It looks like this method doesn't work for 2020.

 

On my FTC for passive income, only the foreign income from 1099-INT appreared on form 1116. (excluding foreign passive rental income on Schedule E)

 

I selected and entered foreign address for Schedule E passive rental income, and I double-checked that it is recorded as PASSIVE on Schedule E review page. However, it is still not linked to FTC, form 1116 income.

 

I'm losing affordable credit of some hundreds $ from this error. :(

 

Anybody knows how to link FOREIGN passive rental income on Sche. E to FTC, form 1116 income section?

Expert Alumni
Mar 1, 2021 10:33:23 AM

@Jes173 Your Foreign Rental Income amount has to be manually entered in the Foreign Tax Credit section.  It will not link to Schedule E automatically.

 

Type 'foreign tax credit' in the Search area, then click on 'Jump to foreign tax credit.

 

In the Foreign Tax Credit section, choose Passive Category Income and type in Foreign Rental Income and the amount (screenshot). 

 

Continue through the screens as instructed by @KarenJ above. 

 

 

 

[Edited 3/14/2021 | 1:44 am]