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lruch
New Member

Despite adding 5 countries (5 1099-DIV forms & their 1116's), regardless of which 1116 form all Line 8’s are blank & 1040 Worksheet line 48.

This is just 5 company stock dividends from 5 countries.  Where does the total of all 5 come together?

I have tried both ways trying to get my foreign taxes to either an itemized deduction or a direct tax credit (1116).  Neither gives me credits.  In 1 place I see a total that is only 2 out of the 5 countries in a number but that $ amt doesn’t make it to line 8.

On the Info Wkst, Part 6, Foreign Taxes box.  I’ve ck’d & unck’d the box & no change?

Tax & Int Wsht Li 4 is blank

In 1 of these responses it suggested entering the highest paid taxes 1st , so I deleted everything & started over.  It didn’t make any difference.

 

Should I give up & enter it on 1040 line 6, if it will let me override it?


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10 Replies

Despite adding 5 countries (5 1099-DIV forms & their 1116's), regardless of which 1116 form all Line 8’s are blank & 1040 Worksheet line 48.

Do you have 5 1099's from different broker's?
lruch
New Member

Despite adding 5 countries (5 1099-DIV forms & their 1116's), regardless of which 1116 form all Line 8’s are blank & 1040 Worksheet line 48.

I have 1 Financial Institution with 2 Accounts so 2 1099-DIV's.  1 Acct has income from 2 foreign countries but only 1 paid taxes.  The 2nd acct has 7 countries with 4 paying foreign taxes.  At 1st I just entered the 2 DIV's at the Acct level & that didn't do anything.  Per another community reading, I deleted these DIV's & entered individually, mainly due to I couldn't figre out how to get the 4th country on the 2nd acct's 1116 (Country "D")

Also, am I right to just not input the foreign countries where tax was not paid to them in both the Income & the taxes or do I need to count/enter them since there was income but no foreign taxes paid.

I wish you had some examples & flowcharts.

Despite adding 5 countries (5 1099-DIV forms & their 1116's), regardless of which 1116 form all Line 8’s are blank & 1040 Worksheet line 48.

Even though a country did not withhold taxes, we include it's income because that will increase the foreign tax credit limit and reduce carryovers. You have 9 countries. That will call for 3 f1116's. In order to keep it as simple as possible, you won't use the 2 actual 1099's. So delete the foreign tax paid in box 7 on both of them.

You will create 9 fictitious 1099's. Each will represent one country and one column on a f1116. The name of each 1099 will be the country it represents. In box 1a, insert a zero. In box 7, insert the foreign tax withheld. If the country did not withhold any tax, then insert $1.00 into box 7. This is tempy and will be deleted later.

Set them up in the following order. The 1st 3  have actual amounts in box 7.The 2nd three, 1 will have the actual  payment in box 7, the other 2 have only $1.00 each. The 3rd set will also have 1 actual amount in box 7, the other 2 $1.00. This arrangement will get the 1st  f1116 with the greatest tax paid and the other 2 behind it will have only 1 actual tax paid.

Once you have it all setup, to insure a clean start, delete all f1116's. Then run them thru as per the technique. After you are completely done, bring  the f1116 wks. and override the $1.00 with a zero.

lruch
New Member

Despite adding 5 countries (5 1099-DIV forms & their 1116's), regardless of which 1116 form all Line 8’s are blank & 1040 Worksheet line 48.

I believe I followed every step you prescribed exactly up until "Then run them thru as per the technique. "  What does that mean?  What technique?  Next, I tried to keep going.   I deleted all of the f1116's &  yet their wkst & expl desc were still there in the list.  I didn't know what that meant so I saved, exited & rebooted.  To my dismay, I have exactly that a bunch of 1099's that now say "Not Done" & no f1116's.  There was a 100% blank one & I assumed I missed deleting it(?)              P.S.  If I zero out 1a, shouldn't I zero out 1b?
lruch
New Member

Despite adding 5 countries (5 1099-DIV forms & their 1116's), regardless of which 1116 form all Line 8’s are blank & 1040 Worksheet line 48.

Thanks for helping

Despite adding 5 countries (5 1099-DIV forms & their 1116's), regardless of which 1116 form all Line 8’s are blank & 1040 Worksheet line 48.

You may have to delete all 9 and start over again. This is easily done in Forms Mode. Also it might be a good idea to delete any f1116's to do a clean restart.

Here is the technique which I assumed you had seen on other postings.

A significant shortcoming of TT is that if you have to fill out Form 1116, it can support only one country per Payer.  In the past, if there were more countries than Payers, using “Various” was the technique used to restore the 1 to 1 country/payer ratio. The following technique restores this 1 to 1 ratio by creating additional payers to equal the number of countries.

This addresses the issue of a 1099-DIV with Box 7 showing foreign tax paid to multiple foreign countries and it is necessary to identify and list the countries individually on Form 1116. This is done by utilizing Dummy 1099-DIV's as illustrated by the following example.

We have a 1099-DIV with Box 7 displaying the total tax paid to 3 foreign countries we will call “A”, “B”, and “C”.

Navigate to the “Here’s the dividend info we have so far” screen displaying the name of the Payer. This will be our Main Screen.  Bring the Payer up in EDIT mode.  Change Box 7 to the amount paid to  “A”.  Click “Continue “.  Either the Main Screen will appear or 2 consecutive screens asking for dividends paid and the source country.  If the latter occurs, insert the data for  “A”, then continue to the Main Screen.

Click on the New Payer button.  We will name this Payer “Dummy1”.  In Box 1a, put a zero.  This prevents TT from issuing an error. In Box 7, enter the tax paid to “B”.  Leave the remaining boxes blank. Click “Continue” back to the Main Screen.

Again open up a New Payer.  We will name this “Dummy2”.  Put a zero In Box 1a and in Box 7 the tax paid to “C”.  Click  “Continue” back to the Main Screen.

Now when we go to the Foreign Tax Credit Interview Section, we are positioned to enter all the necessary data for each country individually.

Now we consider countries “D”, “E”, “F” etc.   
When multiple copies of form 1116 are needed, they have to be created in the right order.
Using TT’s special instructions as a guideline, the following strategy is suggested. Assign to “A” the largest tax paid, then to “B” the 2nd largest and so on through to “F”.  Then when we enter the Foreign Tax Credit Interview Section, we run them through in the same order; greatest to the least.

You may find on part 2 of Form 1116, it is necessary to type in the date for the fictitious Payers which will be the same as the actual Payer, usually 12/31/2018..
Due to recent changes, false errors may appear on the f1116 wks. in part 1, lines 1h, 1i, and 1j. Override them with zeroes to clear the error.

P.S. No need to fill in 1b. Also during the interview, after you select all the countries from the dropdown menu, the next screen will display only  6 payers at a time. The following screen will display the remaining 3.
lruch
New Member

Despite adding 5 countries (5 1099-DIV forms & their 1116's), regardless of which 1116 form all Line 8’s are blank & 1040 Worksheet line 48.

Yes, I had seen the previous but couldn’t get it to work.  So by following these steps, the 1st part 4/8/19 instructions & then the older instructions it has gotten me to the point where I have 1 f1116 in the forms view with the 9 foreign countries tax $’s paid accumulated (real tax paid in 5 countries & $1 dummy tax in 4).   All 9 DIV forms for these Countries’ dummys still have $0 in the 1A Dividends box.  So when does their dividends get entered or how?  When I go into each dummy DIV to correct the $1 tax shall I also correct the 1a & 1b box.  Likewise, correct the 1a & 1b to the 5 countries too?  At this point, I have not even put in the DIV’s the US portion on each of these 2 accts.  I assume I can after I get the foreign figured out?

Where should I see the foreign tax credit flowing to on my Final return, if this works?  So far f1116 just adds them up & nothing flows anywhere?

Despite adding 5 countries (5 1099-DIV forms & their 1116's), regardless of which 1116 form all Line 8’s are blank & 1040 Worksheet line 48.

The dummy payers are not changed. The actual dividends are inserted during the foreign tax interview. The $1.00 tax is deleted on the f1116.
lruch
New Member

Despite adding 5 countries (5 1099-DIV forms & their 1116's), regardless of which 1116 form all Line 8’s are blank & 1040 Worksheet line 48.

During the interview it doesn't prompt me for dividends besides this is Countries 1-3 rolled up & labeled that 1st country, which is confusing.  Likewise countries 5-6 are rolled up to country 4 & so on.  Can I just go to forms to do your advice?

Despite adding 5 countries (5 1099-DIV forms & their 1116's), regardless of which 1116 form all Line 8’s are blank & 1040 Worksheet line 48.

You can insert data in Forms Mode but as there is no guidance, it can be risky.
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