Form 116 line 1a. Is gross income from sources within country both US income plus income in the possession not taxable in the USA?

[crsuare1]

I need to file form 1116 but I need to know if line 1a should include only the income generated outside the USA and not taxable in USA?

[rogge1722 · Accepted solution]

Line 1a does exclude foreign income that is not taxed in the USA.  An example would be foreign earned income excluded on Form 2555 would not be included.

[crsuare1]

Thanks. So what should be included in 1a since it reads “gross income from sources within country”? This excluded income is the only income generated outside the US ( in my case interest paid to me in Puerto Rico)

[rogge1722]

For complete information on income from sources outside the USA,  read the IRS "2018 instructions for form 1116".  Then go to the foreign tax interview and go thru step by step.

[crsuare1]

Thanks for your time and courtesy. How do I get to the step by step foreign tax credit interview.

[rogge1722]

The menu tree is FEDERAL TAXES, Deductions & Credits, Estimates and Other Taxes Paid, Foreign Taxes. Click on the button.