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posted May 2, 2024 3:14:20 PM

What is the Allocable Expense Statement explanation required for for form 1116 foreign tax deduction entries?

Error message indicates that the Allocable Expense statement explanation is required to show that foreign taxes paid are definitely related to foreign income.  This is related to a Schedule K-1 fiduciary beneficiary form.

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1 Replies
Employee Tax Expert
May 3, 2024 8:32:57 AM

Expert JulieS wrote the following regarding the Allocable Expense Statement explanation required for Form 1116 as shown on this link:

 

Yes, you will need to find out what you entered for "expenses definitely related to the income on line 1a" and "deductions not definitely related" first as these are data entry fields.

 

Here's how to find out what was entered:

 

  1. Sign in to your TurboTax account.
  2. Select Deduction & Credits.
  3. Select Edit to the right of Foreign Tax Credit.
  4. Continue until you get to Do You Want the Deduction or the Credit? Select Take a Credit. 
  5. On the screen Elect the Simplified Method, select Other Calculation. 
  6. Continue until you get to Other Deductions Not Definitely Related. This is part of the information that you need. If there's a deduction listed, make note of it. If there are zeros filled in or meaningless entries like NA, or none, delete them and leave the fields blank.
  7. Select Continue through the rest of the section and watch for any other deductions that may come up.

If you didn't find any deductions while reviewing this section, but the request for an explanation comes up again in review, enter NA.