Foreign Taxes when multiple countries and ETFs

[stanrubin301]

I have one 1099-DIV with foreign taxes from two countries and also from ETFs which are listed as RIC on my broker's 1099-DIV.  I split out the income and foreign taxes paid by all three categories into separate 1099-DIV in Turbotax.  Using RIC for the ETF foreign taxes paid.  I allocated each 1099-DIV to the correct country / RIC.    Turbotax ignored the ETF (identified as RIC) on form 1116 which cut my credit nearly in half.

I went back and changed the country designation for the ETF to Various.   Afterwards, form 1116 recognized the foreign taxes and generated a larger foreign tax credit.

The entire process of handling the foreign tax credit is unnecessairly confusing. One 1099-Div split during the foreign tax credit process should be all that is necessary. 

Bigger question:  Why the difference between RIC and Various in the handling of the credit?   Which is correct?

[DaveF1006]

Either can work, but "Various" is often the most reliable way to avoid issues with complex 1099-DIV allocations in tax software. Sometimes using RIC has its limitations because the software might not properly link it to the passive category for Form 1116, which may have happened to you.  As a result , a smaller Foreign Tax Credit will be calculated. Using "various" will always put this into a Passive Category Income 'bucket" and is more reliable.

Usually, reporting this into one 1099 DIV will suffice but splitting this into three Div entries will work, if done properly.