Foreign Tax Credit

[HenryNaidu]

I have been living and working in the USA for many years. I am involved in financial activities in India like sale of a personal property and interest earned on the proceeds thereof since mid 2019. All taxes due have been paid to the Govt. of India.

Now, I want to take foreign tax credit for the first-time using form 1116. We file joint return. Since the amount involved exceeds $600, we obviously want to take credit rather than deduction.

India does not use form 1099-xxx or schedule x-x to report any financial activity and that creates problems for TT. Forms 1116, 8938 and may be others are NOT amenable to elementary TT method of interviewing. It is hard to report foreign financial events if questions from TT are structured based on the US system.

I filled in form 1116 manually after spending a couple of days reading instructions and taking notes from Publication 514. I must admit, IRS documents demand patience but are surprisingly well written.

My question is how can I incorporate a manually completed form 1116 in my federal return, which is otherwise completed using TT?

[DaveF1006]

You can purchase Turbo Tax software from here. Once the program is downloaded and installed, you can manually input data into Form 1116 otherwise it is impossible for you to attach a form that you prepared manually into a Turbo Tax return.

Judging from a variety of activity you seem to possess, I would suggest to download Turbo Tax premier.

[HenryNaidu]

Forgive me for the lack clarity in the message.

I manually input data in the form 1116 on Turbo Tax Premier. Will it automatically propagate data to 'Foreign Taxes' section under 'Deductions & Credits' heading? 

I guess, what I am asking is, can I complete my return by manually filling some forms while letting TT complete rest of federal return by asking me questions?

[ErnieS0 · Accepted solution]

It is not advisable to manually input data into forms in TurboTax CD/Download using the Forms mode. You can do this and your entries will carry over.

You can enter your own numbers in any yellow field. If you are not able to enter a number, it means data is either coming from another part of the program or the field is a calculation field.

What do all the different colors in Forms Mode mean?

[HenryNaidu]

Mr. ErnieS0,

Exactly what I needed to know. The additional link you added, "What do all the different colors in the 'Forms Mode' mean?" was also very helpful.

Thanks,

H