Foreign tax credit - multiple country selection vs just using "RIC" for all 1099-DIV foreign income

[marcuscato]

Turbotax has an unintuitive/non-functional workflow for selecting multiple countries towards reporting foreign tax income from 1099-DIV (form 1116). Given all my foreign income is via the 1099-DIV from my brokerage account from a well-known firm, can I just consolidate all of the foreign income under "RIC" (Regulated Investment Company) or is "RIC" meant for mutual funds only? Some of the foreign income on the 1099-DIV is from dividends generated from individual foreign stocks (bought from the brokerage), not mutual funds, hence the question.

[DaveF1006]

The IRS position on this is If you are a shareholder of a mutual fund, or other regulated investment company (RIC), you may be able to claim the credit based on your share of foreign income taxes paid by the fund if it chooses to pass the credit on to its shareholders. 

If you read this carefully and if the dividends are paid by other regulated investment companies(RIC), then yes, you may combine these. For further advice regarding if the dividends came from RIC's, you may wish to contact the broker for further advice.

Please read this reference source from the IRS for further information.

[marcuscato]

So, would the dividends from individual stocks (as a random example, stocks of Honda company from Japan) from the same US brokerage (Fidelity, Vanguard etc) not count as RIC @DaveF1006 ? Would I need to report it as coming from Japan? I am willing to, but the Turbotax UI is horrendously complicated for some reason.

[ronaldcox3883]

If the taxes were paid by mutual funds and etfs with no country detail, there is "various" option 

[marcuscato]

@ronaldcox3883 I am talking about dividends from INDIVIDUAL stocks (NOT mutual funds), but through a US brokerage firm. An example is divided generated from Honda stock (Japan) kept in Vanguard. Can I use RIC here and call it a day or do I need to use Japan?

[ronaldcox3883]

sorry, didn't understand!

[marcuscato]

@Anonymous_ what are your thoughts on this question? (given you are helping me on a somewhat related question elsewhere)

[ronaldcox3883]

As indicated, if individual stocks and you have the country info, my opinion is to enter the country. In the case of mutual funds and exchange traded funds (ETFs), the detailed info is not available. Did you download the info from your brokerage account? I so, Turbo Tax will populate your schedule D, 8945, 1116, etc. The 1116 form was available in the update today. I checked the TT forms against the hardcopy statement from my brokerage and everything transferred correctly. 

TT also correctly accounted for foreign taxes paid as a credit for taxes paid.

[marcuscato]

@ronaldcox3883 yes, the brokerage had provided me with the split of foreign income and tax elegantly with countries listed. But when I tried to use Turbotax to mimic them, for some reason it did not work well with multiple countries added - it just populated one of them and ended. I did see "form 1116" as well. However, given I have a foreign tax credit carryover for next year, I also need a "form 1116 Schedule B", but that form is not currently available for e-filing and won't be before the tax deadline. This means I cannot e-file with TT if I have a carryover of the foreign tax credit. 

[marcuscato]

@JulieS your thoughts on this?

[ronaldcox3883]

Uh oh! The turbo tax info website (https://care-cdn.prodsupportsite.a.intuit.com/forms-availability/turbotax_fed_windows_individual.htm...) shows 1116B print available 3/31/22, but says e-file is not supported! Maybe get the paper  form from the IRS site and add it to your paper return? 

[ronaldcox3883]

Uh oh! The turbo tax info website (https://care-cdn.prodsupportsite.a.intuit.com/forms-availability/turbotax_fed_windows_individual.htm...) shows 1116B print available 3/31/22, but says e-file is not supported! Maybe get the paper  form from the IRS site and add it 

[marcuscato]

Yup @ronaldcox3883 but then I can't e-file it. And that means waiting forever for IRS to process my return given the backlog.

[ronaldcox3883]

There are competing products. Anybody in the group used one of the other products in the past? I frustrated with Intuit this year, but also had to wait on my brokerage and a very late 1099. BTW just submitted mine and was accepted. The TaxAct forms availability page (List of IRS Tax Forms & Current Availability | TaxAct) shows their 1116 is not available yet, and does not list the 1116B at all. 

[misim]

I still don't understand.  When I also want to enter multiple countries from different foreign stocks, it only does one country and then kicks out out without allowing more than one country.  In simple terms for people like me, suppose I have the following:

Country A, Dividends amount #1 from a company (NOT a mutual fund or ETF)

Country B, Dividends amount #2 from a company (Not a mutual fund or ETF)

Country C, Dividends amount #3 from a company (Not a mutual fund or ETF

How exactly do I enter this in TT's totally non-functional system?