Hi,
I and my wife have Indian bank accounts. and we get interest as well as pay taxes on it.
I have entered taxes and interests in 1099 INT section (Software suggested it to do it like that). Due to this, I get asked about details in Foreign Tax Credit section. I entered India as country and filled out everything. At the end, it correctly showed the foreign tax credit. BUT, then it says this-
Certain less common circumstances may require additional computations on your part. Select more information for a complete explanation of the steps you should take.
When I select more information, it shows:
Here are a few unusual situations relating to Form 1116 that are not handled in Interview:
...
- Foreign taxes paid in foreign currency and you converted the amounts to U.S. dollars
...
If any of these situations apply to you, you cannot use TurboTax Online to prepare your return.
That is EXACTLY what software asked to do- To convert the foreign currency interest and taxes in USD using yearly average conversion rates listed on IRS website. Now, here is it says "..you converted the amount to USD". I am not able to follow at all.
P.S. I am using website on browser. not sure if this is what is called "Online"
You must convert all foreign dollars to US dollars for entry on your return. You are using online software and all versions require you to make the conversion if you want to file using our software. You cannot use this software to file a return that is not in US dollars.
Use Yearly Average Currency Exchange Rates - IRS which states:
The Internal Revenue Service has no official exchange rate. Generally, it accepts any posted exchange rate that is used consistently.
When valuing currency of a foreign country that uses multiple exchange rates, use the rate that applies to your specific facts and circumstances.
You must convert all foreign dollars to US dollars for entry on your return. You are using online software and all versions require you to make the conversion if you want to file using our software. You cannot use this software to file a return that is not in US dollars.
Use Yearly Average Currency Exchange Rates - IRS which states:
The Internal Revenue Service has no official exchange rate. Generally, it accepts any posted exchange rate that is used consistently.
When valuing currency of a foreign country that uses multiple exchange rates, use the rate that applies to your specific facts and circumstances.