My rental income is identified as related to a foreign country on Schdule E but Form 1116 does not link to or see any foreign income. Do I have to manually re-enter each income and expense line from Schedule E on Form 1116?
You will need to also enter your foreign rental income in the foreign tax credit section of TurboTax. You only need to enter the gross rental income for Form 1116, not the expenses. Please see the following steps:
To report your foreign taxes paid on wages (or other foreign income) for foreign tax credit:
- Click on Deductions & Credits
- Scroll down to Estimates and Other Taxes Paid
- Scroll down to Foreign Taxes
- Click 'Yes" you paid foreign taxes
- Click through the screens regarding foreign interest and dividends
- Click yes that you have reported all your foreign income already in TurboTax
- Click that you want to take a credit
- Answer question about the Simplified Limitation Election
- Choose income type for wages - it will be General category income(pension income is also General category, stocks and foreign rentals are Passive category)
- Add your foreign country as the country
- Enter description - for example Foreign wages
- Enter Income amount that you previously reported in TurboTax- Enter gross rental income
- Enter rental expense totals as Definitely Related Expenses
- Enter your taxes you paid on your foreign rental in the box "Other income"
Continue through ALL the foreign tax credit screens
I am trying to do this for my 2019 tax return. The program already has some foreign tax from a 1099-DIV allocated, and it is not allowing me to enter any other type of income. This is new -- last year, it worked very well. Is there a way to "start over" and delete the existing foreign tax information, in the hope that the other categories will show up?