Re: Foreign tax credit
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johnscarf
Level 1

Foreign tax credit

I had a carry over foreign tax credit from taxes paid to Peru and Puerto Rico in 2018. When filing my 2019 taxes the carry over was not used by TurboTax. It seems that when filling in Form 1116 there was no Foreign income entered on line 3d (I did not earn anything in those countries in 2019) so when you divide by 3d ($0) by 3e you know the result. It seems that the only way to utilize a foreign tax credit carry over is to earn future income in that country???

2 Replies
pk
Level 12
Level 12

Foreign tax credit

@johnscarf , YES -- to utilize  foreign tax credit   (suspended / carryover or new), you need  foreign income.  And NO, the credit and  income does not have to be  from the same country -- in your particular case  , even though the  income that generated the tax credits   came from Peru, the carry-over  could be used against foreign taxes paid  on income from another country.  The only other way to utilize the credit is to use as deduction when you itemize.

 

Does this answer  your query ?

johnscarf
Level 1

Foreign tax credit

This answers the question, thank you for the fast response.

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