Linked all investment dividends to 1116-- $5127 with foreign taxes paid $769 - 15 %
According to the IRS--
So, I was expecting to adjust the amount -->$2078- ( 5,127 x 0.4054)
But the form 1116 shows $5127 on line 1. Or ZERO when the box on "Foreign Qualified Dividends and/or Capital Gains Adjustment Smart Worksheet -- Check the box to make adjustments for foreign qualified dividends and/or capital gains for line 1" is checked. I can only see this using forms view.
TT did not click on the box. I had to manually do it.
Am I missing something?
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perhaps you meet the adjustment exception
Adjustment exception for Form 1040 or 1040-SR filers. You qualify for the adjustment exception if you meet
both of the following requirements.
1. Line 5 of the Qualified Dividends and Capital Gain Tax Worksheet doesn't exceed:
a. $326,600 if married filing jointly or qualifying widow(er),
b. $163,300 if married filing separately,
c. $163,300 if single, or
d. $163,300 if head of household.
2. The amount of your foreign source capital gain distributions, plus the amount of your foreign source
qualified dividends, is less than $20,000. For this purpose, ignore any capital gain distributions or qualified
dividends you elected to include on Form 4952, line 4g.
if not, i don't think it's capable of doing the calculation. Your calculation may not comply with the law.
How to make adjustments - line 1a. To adjust your foreign source qualified dividends
or capital gain distributions, multiply your foreign source qualified dividends or capital gain distributions in each separate category
by 0.4054 for the foreign source qualified dividends or capital gain distributions taxed at a rate of 15%,
by 0.5405 for those taxed at a 20% rate.
include the total on line 1a of the applicable Form 1116.
for those taxed at 0% exclude them from line 1a
this can result in a substantial FTC carryover that may never be used.
perhaps you meet the adjustment exception
Adjustment exception for Form 1040 or 1040-SR filers. You qualify for the adjustment exception if you meet
both of the following requirements.
1. Line 5 of the Qualified Dividends and Capital Gain Tax Worksheet doesn't exceed:
a. $326,600 if married filing jointly or qualifying widow(er),
b. $163,300 if married filing separately,
c. $163,300 if single, or
d. $163,300 if head of household.
2. The amount of your foreign source capital gain distributions, plus the amount of your foreign source
qualified dividends, is less than $20,000. For this purpose, ignore any capital gain distributions or qualified
dividends you elected to include on Form 4952, line 4g.
if not, i don't think it's capable of doing the calculation. Your calculation may not comply with the law.
How to make adjustments - line 1a. To adjust your foreign source qualified dividends
or capital gain distributions, multiply your foreign source qualified dividends or capital gain distributions in each separate category
by 0.4054 for the foreign source qualified dividends or capital gain distributions taxed at a rate of 15%,
by 0.5405 for those taxed at a 20% rate.
include the total on line 1a of the applicable Form 1116.
for those taxed at 0% exclude them from line 1a
this can result in a substantial FTC carryover that may never be used.
Thanks!! Yes. I meet the adjustment exception. So this means that I can use the whole dividend amount and don’t have to multiply the amount by 0.4054. I also don’t have to click that box on form view. Line 1a will be the entire amount of the dividend.
Is this right?
that is correct. if you meet all the rules for the exception no adjustment is necessary. line 1a will be the full amount of foreign dividends qualified and non-qualified.
by the way if you are single and have less than $300 in FTC form 1116 is not required at all. you do this by just entering the FTC amount and "various" no quotes for the country. no linking to any column on form 1116
and no entry of the amount of foreign dividends
Great! Thanks so much!
Good information to have, not only about the tax law, but also about how it connects to TT.
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