Form 1116

Forum|Forum|4 years ago
March 31, 2022
1 reply
5 views

I have foreign income from both dividends (various countries) and a T4A-NR I received from Canada (which is general income). I cannot get TurboTax to properly link the Form 1116's and/or create 2 separate ones for the 2 categories of income. It continues to try to put them on the same Form 1116 which generates an error. Can anyone help me understand how to do this in TurboTax.

rogge1722

Level 10

If you intend to e-file, the category of income with the greater foreign tax credit must be the 1st copy. Since this is not determinable before completing the f1116's for each cagtegory, TT suggests that the category with the greater foreign tax paid be run thru first as this will most likely will result in the greater tax credit. Which cagtegory of income will be 1st?

Icebreaker250Author

Level 2

Thanks. The category with the largest foreign tax credit is the general income.

rogge1722

Level 10

To ensure a clean start, delete any F1116’s before entering the foreign tax credit interview. .

1. Foreign Tax Credit.
     Continue
2. Tell us about your foreign taxes.
     This screen may or may not appear for various reasons.
     If displayed, click on Continue.
3. Foreign Taxes
     Continue
4. Do you want deduction or credit?
    Credit
5. Reporting foreign taxes paid
    Continue.
6. Where did you receive dividends income?
     Not used at this time, so just select the first one then Continue
7. Income from foreign countries
    Done
8. Need to report income
    No
9. Simplified limitation election for AMT
     This screen may or may not appear for various reasons.
     If displayed, will assume YES is selected
10. No other income or expenses
    No
11. Completing forms 1116
     Continue
12. Foreign tax credit worksheet
     Continue
13. Choose the income type
      General category then Continue
14. Country Summary
      Click on Add a Country.
15. Select Canada from the list.
16. Other Gross Income-Canada
      Enter the description and the amount even though entered elsewhere.
17. Definitely related expenses
     Enter any applicable amount.
18. Foreign Losses.
     Enter any applicable amount.
19 Foreign taxes paid.
     Enter the amount in the box for other income.
20. Country Summary
     Done
21. Continue thru the next several screens until you reach:
22. Foreign Tax Credit Summary.
      You should see displayed Copy 1 General Category Income.
     Click Done.
23. Go thru a few more screens and exit the interview.

Now re-enter the interview and work through the screens for the dividends to generate COPY 2, passive category F1116. TT may ask for paid or accrued and the date paid. The default is “Paid” and the date 12/31/2021.