On Form 1116, if the foreign tax credit limit is greater than the foreign tax used (line 21 is greater than line 14), you have a carryover equal to that amount.
To enter, click on the link above or see Tom Young's discussion with another community member.
On Form 1116, if the foreign tax credit limit is greater than the foreign tax used (line 21 is greater than line 14), you have a carryover equal to that amount.
To enter, click on the link above or see Tom Young's discussion with another community member.
Close DawnC, but you made a slight mistake. The amount of Foreign Tax Carryover is Form 1116 Line 14 - Line 21.
Line 14 is the maximum amount of Foreign Tax that the IRS will give you credit for.
Line 21 is the amount of US tax you are paying based on your adjusted gross income. The IRS will not give you more credit than the amount of US tax owed.
Ok, I also made a mistake.
To calculate the amount of Foreign Tax Carryover for form 1116:
Total Foreign Tax Paid (Line 9) - Maximum amount (i.e. limit) of credit (Line 21)
Look at IRS publication 514 Carryback and Carryover. You must keep a running calculation of prior years and publication 514 has a couple good examples.
Another good example is here:
https://www.greenbacktaxservices.com/blog/foreign-tax-credit-carryover/