1099-DIV Box 7 flowing to form 1116 error?

[tsui80]

Hi, 

I'm filing my return and have a 1099 DIV with Box 7 - Foreign Taxes paid listed.  I input the amount into the form and during the review it says that I have an error.  It says that "form 1116 (Copy 1): Line 33 should be blank".  However the line itself is blank and the amount in the 1099-Div flowthroughs to the form 1116 line 35.  I don't believe that this is an error.  

Is there something that I am missing? Is there a way to override the error as this should not be an error.

Thank you.

[MarilynG1 · Accepted solution]

You are correct; this is not an error.  The amount of Foreign Tax on your 1099-Div is supposed to flow through automatically to Form 1116.

However, now you need to go to the Foreign Tax Credit section (under Deductions & Credits > Estimates and Other Taxes Paid) and enter the amount of Foreign Income that is associated with the amount of foreign tax you paid.

This is generally on a supplemental statement from your broker, and the total amount of Foreign Income may be sourced from several countries.  

In the Foreign Tax Credit section, indicate that you want the Credit.  The interview asks if you want to review your entries from your 1099-Div, choose No. 

Choose No for AMT, Continue, and choose 'Passive Income' for income type. For Country choose 'RIC' (Regulated Investment Company).

Choose Yes, your total taxes paid only include taxes paid on form 1099-Int or 1099-Div.

Continue, and enter the amount of Foreign Income reported on your 1099-Div.  Continue, and indicate that the taxes were paid. 

Continue through to the end of the section.

Here's more info on Claiming the Foreign Tax Credit.