Foreign Tax Credit Form 1116

[CT311]

Form 1116 line 1a shows zero amounts for my 1099s-foreign dividends.  It is getting the information from the Foreign tax credit computation worksheet Part 1-g-1a when the foreign dividends from schedule B is reported on Part 1-g-1c.  

Needs to be redirected to the correct line number and should be Part 1-g-1c.

[MarilynG1]

Foreign Income entered with a 1099-DIV shows on Form 1116, Part I, Line 1a.  This is Passive Income, as indicated on 1c.  Foreign Tax paid from the 1099-DIV entry shows in Part II.  Similarly, on the Foreign Tax Computation Worksheet. 

If you had other types of foreign income/tax paid, you will have another Form 1116 for that type of income.  Reporting Foreign Income/Tax is easier if you use the interview screens. My numbers transferred as expected when using the interview to report dividends.  You could delete both the worksheet and Form 1116 and step through the interview screens again.

@CT311 

[CT311]

I tried your suggestion but still not getting the correct result.  Allow me to give you the scenario.

H and W filing joint return. Each has 1099Div from broker. Both 1099Div are for foreign dividends from two countries, A &B.  When I enter H's 1099Div, the interview asks how much is foreign source, I enter the whole amount but it only allows to enter one country. It does not ask to split the total between two countries. The same problem when entering W's 1099 Div.  When the amounts transfer to Form 1116 line1(a), the amount shows zero or some incorrect amount.  

If I can enter the correct amount to report for each country for the 1099 Div of H and W during the Shedule B entry, the amounts that will transfer to Form 1116 line 1(a) will be correct and my problem will be solved.  What am I doing wrong?  I am using TT Premier.  HELP...

[DaveF1006 · Accepted solution]

There are two approaches to use in this instance.

1. Consolidate the forms:

If your 1099-DIV comes from a standard U.S. brokerage (like Fidelity, Schwab, etc.) and the foreign dividends are from diversified mutual funds or a collection of stocks, you are often allowed to aggregate them.

1. Instead of trying to list "Country A" and "Country B," select "RIC" (Regulated Investment Company) or "Various" as the country in the 1099-DIV entry screen.
2.  TurboTax will put the total amount on a single Form 1116 under the "RIC" designation. The IRS widely accepts this for passive dividend income, completely bypassing the need to split the math.

2. Create Dummy 1099 DIV's

1. Edit the Original 1099-DIV: Change the amounts on the "Main" 1099-DIV to represent only Country A. (e.g., if total was $1,000 and Country A was $600, change the main entry to $600). 
2. Create a "Dummy" 1099-DIV: Click "Add another 1099-DIV." Name the payer something like "[Broker Name] - Country B."
3. Enter the remaining $400 of dividends here.
4. Repeat this for your spouses Div's.

The second approach may be safe, but the first approach is the easiest and is acceptable with the IRS. This approach is the one I suggest.