Problem with Form 1116- Foreign Taxes

Forum|Forum|3 years ago
February 28, 2023
4 replies
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Hello.

I am having a real problem with how TT is handling Form 1116. I have a pretty vanilla situation- I have 2 separate 1099-DIV's that are reporting foreign passive income with corresponding foreign taxes paid. I am trying to take the credit for foreign taxes and not the deduction. When I walk through the TT questions and enter the 10 different countries, the sequence of events doesn't allow me to enter the corresponding income and expenses for each country. It's like the TT programming is wrong and it only allows me to enter one country per 1099-DIV, but one of my 1099-DIV's has like 10 different countries listed. Is anyone else having this issue?

Thanks

TurboTax Self Employed Online

rogge1722

Level 10

TT can support only one country per 1099. Here is a suggested workaround .

This is an example of the preparation to fill out a form 1116 for taxes paid by 3 countries within a 1099-DIV.

They are:

a: RIC which includes all mutual funds/ETF”s

b: Canada

c: United Kingdom

Three fictitious 1099-DIV’s will be created. The original 1099-DIV will be used for domestic income only.

Bring up a new blank 1099-DIV. For convenience name the payer the same as the country it represents. In this case the payer is RIC. From the broker’s supplemental info, insert into box 1a the ordinary dividends from any and all mutual funds/ETF’s. In box 1b, insert all qualified dividends form all mutual funds/ETF’s. In box 7, insert the foreign tax paid from all mutual funds/ETF’s. That completes the 1st fictitious 1099-DIV.

Bring up a 2nd blank 1099-DIV. Name the payer Canada. In box 1a, insert all the ordinary dividends from Canada; in box 1b all the qualified dividends from Canada and in box 7 the tax paid to Canada. That completes the 2nd fictitious 1099-DIV.

Bring up a 3rd blank 1099-DIV. Name the payer U.K. In box 1a, insert all the ordinary dividends from the U.K.; in box 1b all the qualified dividends from the U.K. The U.K. does not withhold taxes, but TT must see an amount in box 7 during the interview. Insert $1.00 into box 7 and subtract $1.00 from box 7 of either of the previous fictitious 1099’s. That completes the 3rd fictitious 1099-DIV.

On the original 1099-DIV, subtract all the foreign amounts from box 1a so that only the domestic ordinary dividends remain. Subtract all foreign amounts from box 1b so that only the domestic qualified dividends remain. Delete the amount in box 7, the foreign tax paid.

If there are more than 3 countries, TT will automatically generate additional F1116 copies as necessary.

rogge1722

Level 10

Addendum:

When you get to the screen with the header "Report foreign tax paid to XXX", that screen will display up to 6 payers. The remaining are on the following screen.

DARichardsAuthor

Level 2

Hey- Thank you so much for the replies- I really appreciate it. Unfortunately, I am using the online version of TT and I don't think I can do the steps you outline. I'm unfortunately probably going to have to do some cobbled together TT forms with my own PDF fillable forms directly from the IRS. Unfortunately I already paid for the TT Federal and State product. The other issue is I already scanned in my 1099-DIV and I don't know how to delete them once I have done that. UGH I wish I understood TT better than I do.

fred97

Level 2

I have a radical idea. Why doesn't TurboTax fix their software? It clear says in the software that you can use multiple countries, and when you try that it always overrides your previous entry.

DARichardsAuthor

Level 2

Agree 100%. I finally got it to work by making a separate 1099-div for each country. It was cumbersome but unnecessary if they had the correct programming.

Julie Kuntzendorf

Level 2

I'm having the same problem today. How did yours get resolved? Has the TT software for this been fixed?

fred97

Level 2

No, apparently Intuit isn't interested in fixing their software. Fortunately, one of the countries had a relatively small amount of taxes I paid. To avoid all the gymnastics to try to override the program, I just sucked it up and filed listing only one country.