Is this a bug in form 1116? Line 1a shows amount more than my foreign income?

My foreign income is $170,128, which is specified on line 1a of Foreign Tax Credit Worksheet. Line 1e of this worksheet lists $57,779, which is the difference between income and the income exclusion (107,600) and housing exclusion (4,749) from Form 2225. This excess is then added to income, so 1116, line 1a = 227,907. The IRS instructions for 1116, line 1a says "Don't include any earned income excluded on form 2225".

260

Level 9

Apr 10, 2021 3:04:25 AM

Revisit the foreign tax credit interview. When you get to the screen that asks for "Other Gross Income -Country", insert a zero, not the $170K. That is because it states not to include income reported on form 2555. Thus line 1a in the foreign tax credit worksheet will be zero and the $58K on line 1e will then appear on line 1a of form 1116.

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Is this a bug in form 1116? Line 1a shows amount more than my foreign income?