Foreign tax carryback problem.

Forum|Forum|6 years ago
May 31, 2020
1 reply
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I always use 1116 for passive income tax credit.

For 2012-2017, I had a carryfoward of $2938.

In 2018 I paid $0 foreign taxes.

In 2019 I paid foreign taxes of $2238 and used $574, with $4602 for 2012-2018 remaining.

I want to carryback earned credits from 2019 to 2018.

How can I do this, it seems to not be possible because I paid $0 foreign taxes in $2018.

Is that possible? Or is it because on Form 1116-2018 line 17 was -5574 loss, 18+19 are blank

and line 20 is the full tax of $623, lines 21+22 are also empty, so the full US tax was paid without

credits.

Note: in 2018, I couldn't use the carryfoward of $2938.

If Carryback is possible- What is the correct way of carrying back: Form 1040X + what else.

A new 1116 -How?

Thanks for any help.

Anonymous

a one year carryback is allowed. if line 17 of 2018 form 1116 is negative no credit would be allowed.

patameliaAuthor

Level 2

Thanks for your help. I read line 17 and it actually said: if 0 or negative, you have no foreign tax credit for this category of income. I don't understand why, but it is a fact. I am just trying to understand if I can ever carryback.

I checked taxes I paid from 2012->2019 where line 17 was positive and I had potential carryback income from the following year and found 2 years where I could carryback.

In 2015, I had potential carryback income from 2016 of $2920 and paid $284 taxes.

In 2016, I had potential carryback income from 2017 of $2662 and paid $176 taxes.

In 2017 itself line 17 was minus -does this make a difference?

Of the possible $285 and $176 = $481 refund, I have general category and passive foreign taxes so it would only be about $285*.51 and 176*.31= $200. It is probably not worth the effort.

Can I carryback from 2016-->2015 and 2017->2016. Is this within the allowed 10 years?