FTC for Passive Income -

[tommyzed]

Hey all! Struggling with filing my US taxes via Turbo Tax.

I have passive income (1099-INT/DIV). All of this income is 100% taxed by Germany as I am a resident of Germany. I'm trying to fill out Form 1116 (FTC) for passive income to offset my US tax burden.

When I fill out the passive income Form 1116 in Turbo Tax, it shows a list of SOME of the 1099s to which I can attribute to Germany. But it does not list them all. It only lists the ones which had some foreign taxes withheld on the actual 1099 form. Those that did not have foreign taxes withheld at source are not listed.

Since I can only attribute a portion of my 1099s to Germany, this limits the amount I can claim as FTC (passive income) and increases my US tax burden, incorrectly. 

This seems like a bug. 

How can I signal to Turbo Tax that ALL my 1099 income is German-sourced and therefore should be included in the FTC calculation for passive income?

thanks,

tom

[SusanY1]

You will need to manually make adjustments in the foreign tax screens to get where you need to be first check "none of these apply" on the screen Tell Us About Your Foreign Taxes
 

Continue through the "No Other Income or Expenses" screen and select NO.

On the Screen Choose the Income Type choose Passive Income.

On the next screen select "Add a Country" if necessary (Germany  may already be showing in which case, just click Done (or Continue) here.)

If all of the income is already entered from 1099s, leave the Other Gross Income - Germany screen blank.  

Continue through the to the Foreign Taxes Paid - Germany section and enter the taxes not already accounted for in the section Foreign Taxes on Other Income.
 

[tommyzed]

Let me illustrate with an image. When I get to this screen, it lists only SOME of my 1099s. Specifically, it lists only those which had "foreign taxes paid" marked in the official 1099 form. However, this is just a subset of the 1099s I received.

I need to be able to add ALL 1099s to be associated with Germany.

[MarilynG1]

Yes, only the 1099-Div's with Foreign Tax on them will transfer over to the Foreign Tax Credit section.  You will need to enter the amount of Foreign Income associated with these.

Then continue in the FTC section until you come to a screen where you can indicate you have more Foreign Income to report and choose 'Passive Income'.   Add up the the total amount of Foreign Income you were taxed on by Germany on your 1099-Div's (other than what you already entered),  and enter that amount.  

Continue, and enter the total amount of Foreign Tax paid on this income.

Here's more info on Claiming the Foreign Tax Credit.

@tommyzed