Solved: How does form 116 compute Foreign Tax Credit Carryovers? I'd prefer to take the credit this year - but Turbo tax is bumping about 1/3 of the credit out to 2017.
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How does form 116 compute Foreign Tax Credit Carryovers? I'd prefer to take the credit this year - but Turbo tax is bumping about 1/3 of the credit out to 2017.

 
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Level 11
Level 11

How does form 116 compute Foreign Tax Credit Carryovers? I'd prefer to take the credit this year - but Turbo tax is bumping about 1/3 of the credit out to 2017.

Amount of foreign tax credit allowed  for a taxyear is based on a ration of foreign income  to world income. The un-allowed portion can be carried forward upto 10 years but again allowed  based on a ratiometric  fashion. You can take deduction for the whole amount ( itemized deduction under  taxes paid )

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Level 11
Level 11

How does form 116 compute Foreign Tax Credit Carryovers? I'd prefer to take the credit this year - but Turbo tax is bumping about 1/3 of the credit out to 2017.

Amount of foreign tax credit allowed  for a taxyear is based on a ration of foreign income  to world income. The un-allowed portion can be carried forward upto 10 years but again allowed  based on a ratiometric  fashion. You can take deduction for the whole amount ( itemized deduction under  taxes paid )

View solution in original post

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