Form 1116 is requesting "detailed explanation" of "other Deduction Statement A." I have completed everything in TurboTax, but don't know what additional info is needed for Line 3A of Form 1116. The query came up during the review of my completed return.

[bowwow]

TurboTax figured it out so it should provide a statement. For me I just wrote "Standard deduction, Schedule 1 deductions" since this is where the amounts on my line a and b came from.

[mirassou]

I agree with bow wow, jut put a statement standard deduction from Schedule B

[Tech Hiker]

Mine turned out to be my HSA deduction.

[BillM223]

For line 3a, the IRS instructions say, "Line 3a. Enter the following itemized deductions (from Schedule A (Form 1040)) on line 3a. • Medical expenses (line 4). • General sales taxes (line 5a). • Real estate taxes for your home (line 5b). If you don't itemize deductions, enter your standard deduction on line 3a."

It used your HSA distributions, not your HSA deduction, because TurboTax assumes that the distributions reported in box 1 of the 1099-SA correspond to medical expenses that you paid for.

If this is not the case, please come back and tell us.

[Tech Hiker]

Oh I see the difference now.  My error message was slightly different.  It was for line 3b column a.  That's where it has my HSA contribution.  Not line 3a.

[LeelaBell]

My Form 1116 line 3a is being reduced by the $10,000 cap on itemized taxes, so rather than matching what you mention in your note, in TurboTax, my Form 1116 line 3a is Schedule A line 4 plus line 7 rather than 4 plus 5a plus 5b.  The instructions for Form 1116 indicate what you said is correct, but this isn't what TurboTax is doing.  Which is correct?  And if it's the latter, how do I correct it in TurboTax?   

[BrittanyS]

It would be helpful to have a TurboTax token.  The token provides a sanitized version of your return.  We will be able to see the numbers but not any personal information such as your name, SSN, or address.  

If you would like to do this, here are the instructions: 

In TurboTax Online, go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen, and you will get a Token number. 

In TurboTax CD/Download versions, go to the black panel on your screen and select Online. 

1. Scroll down and select Send tax file to Agent. 
2. You will see a message explaining what the diagnostic copy is.  Click send through this screen, and you will get a Token number. 

Reply to this thread with your Token number. 

We will then be able to see precisely what you are seeing, and we can determine what exactly is going on in your return and provide you with a resolution.

@LeelaBell 

[LeelaBell]

My token is 1086333.  Thank you for your help!  

[LeelaBell]

Hi there, just checking to see if you received my token or have any further information for me.  

Thank you!

Andrea 

[LeelaBell]

Hi there, Just checking in to see if you all have had a chance to look into this potential issue with Form 1116 handling of itemized deductions.  Also, the entry on Form 1116 line 3e "Gross income from all sources" appears WAY too high.  I cannot figure out where that number came from, and the "Smart worksheet" does not itemize it.  It is nearly double our AGI.  Even if I add in our 529 distributions and any tax exempt income, I still can't get close to that number.  

Thanks for your help!  

[Tech Hiker]

Maybe you need an @BrittanyS  to get her attention.

[LeelaBell]

Thanks @Tech Hiker for the tip.

@BrittanyS, I figured out how it got Form 1116 line 3e, but it still is calculating line 3a incorrectly based on what @BillM223 said above.  Just wanted to make sure you got my token to replicate it.  

Thanks!  

[JPP2403]

Found this  at https://www.irs.gov/pub/irs-pdf/i1116.pdfLines 3a and 3b

Some deductions don't definitely relate to either your foreign source income or your U.S. source income. Enter on lines 3a and 3b any deductions (other than interest expense) that:
• Aren't shown on line 2, and
• Aren't definitely related to your U.S. source income.
Line 3a. Enter the following itemized deductions (from
Schedule A (Form 1040)) on line 3a.
• Medical expenses (line 4).
• General sales taxes (line 5a).

• Real estate taxes for your home (line 5b).
If you don't itemize deductions, enter your standard deduction on line 3a.
Line 3b. Enter on line 3b any other deductions that don't definitely relate to any specific type of income (for example, the deduction for alimony paid from Schedule 1 (Form 1040),
line 19a).

[LeelaBell]

Yeah, @JPP2403 , that's exactly the problem.  TurboTax is not following those instructions for the tax portion of itemized deductions.  It is capping them at $10,000 if they exceed that rather than adding the sales tax and real estate tax together, presumably since the max taxes you can itemize is $10,000 (per itemized ded line 5e).  If the IRS wanted to cap it on Form 1116, you'd think they'd state that on Form 1116's instructions in the part you quoted.  

[LeelaBell]

I went back and looked at our 2020 professionally prepared taxes, and they capped tax at $10,000 on form 1116 line 3a too (before adding medical expenses), so maybe that's right.  Sure seems like the instructions for form 1116 should spell that out because that's very much NOT what they say to do.  I'd love to find an IRS-sourced info point that verifies that's the right thing to do.  I saw an article by a guy who used 4 different tax software packages and came up with 3 different values for the foreign tax credit, just confirming it's hella challenging to get right and way too complex to calculate.