I have foreign passive income on both Sch.B(passive interest) & Sch.E(passive rental).
However, when I reviewed my form 1116, Foreign Tax Credit("FTC"), only foreign interest (Sch.B) was linked to it.
Both of Turbo tax specialist and my former accountant confirmed that foreign passive rental income should be linked to Form 1116 for correct calculation.
When I entered Sch.E, I definitely set my property as foreign property.
(Address type:foreign address / Property located outside US? Yes, all assets.)
Q1. Am I still missng something to connect my foreign income on Sch.E and the income section on Form 1116?
Q2. Also where can I put my foreign income tax on my foreign passive rental income(Sch.E) in order to get FTC? (FYI, I put my foreign come tax on my foreign interest income on 1099-INT)
Your help would be greatly appreciated!!
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Revisit the foreign tax credit interview and here are the screen headers and responses to include the rental income.
1. Foreign tax credit.
Continue
2. Foreign taxes
Continue
3. Do you want the deduction or credit?
Credit
4. Reporting foreign taxes paid
Continue
5. Reporting foreign taxes paid
No
6. First year you are eligible? This screen may not appear.
If selected, continue
7. Elect simplified method? .
Will assume YES
8. No other income or expenses
No
9. Completing forms 1116
Continue
10. Foreign tax credit worksheet.
Continue
11. Choose income type
Passive then Continue
12. Country summary.
If the rental income is the same country as the interest, select EDIT else
Add a Country then select from the next screen's list.
13. Other gross income-Country
Enter the description and the amount even though entered elsewhere.
14. Definitely related expenses.
Enter the applicable data then continue.
15. Foreign losses
Enter applicable data then Continue
16. Foreign taxes paid.
Enter the amount then Continue
17. Country summary
Done
Continue with the remaining screens to the end.
Revisit the foreign tax credit interview and here are the screen headers and responses to include the rental income.
1. Foreign tax credit.
Continue
2. Foreign taxes
Continue
3. Do you want the deduction or credit?
Credit
4. Reporting foreign taxes paid
Continue
5. Reporting foreign taxes paid
No
6. First year you are eligible? This screen may not appear.
If selected, continue
7. Elect simplified method? .
Will assume YES
8. No other income or expenses
No
9. Completing forms 1116
Continue
10. Foreign tax credit worksheet.
Continue
11. Choose income type
Passive then Continue
12. Country summary.
If the rental income is the same country as the interest, select EDIT else
Add a Country then select from the next screen's list.
13. Other gross income-Country
Enter the description and the amount even though entered elsewhere.
14. Definitely related expenses.
Enter the applicable data then continue.
15. Foreign losses
Enter applicable data then Continue
16. Foreign taxes paid.
Enter the amount then Continue
17. Country summary
Done
Continue with the remaining screens to the end.
I DO appreciate, Rogge1722!!
I spent more than 20 hours and started over several times for this issue.
Now, it looks good!!!!
Thanks a lot for your very detailed&easy instruction!!
Good night!
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