Report Foreign Dividends Step-by-Step: RIC or other

[paulinus49]

When filling in the information from my 1099-DIV, I reported $267.14 in foreign taxes paid.  Two steps later, I am to report the portion of the dividends and distributions that was from a foreign country.  I have that number, of course, from my 1099-DIV summary.  However, I am required to check whether those foreign dividends are from a Mutual Fund/Regulated Investment Company (RIC) or other.  I cannot choose both.

In my situation, some of the dividends came from RICs (mutual funds) and some came from regular securities.  What should I check?  This might affect how the numbers are reflected on the Form 1116 if i wish to claim the foreign tax credit.

Thank you  in advance.

[DaveF1006]

Yes. It doesn't give you much of a choice when you answer this question. I would suggest selecting RIC since some of the dividends came from RIC.

This isn't a critical component in your return and won't raise a red flag. The amount reported will not  generate a Form 1116 because it is less than the $300 reporting threshold required to be reported on Form 1116. 

If a Form 1116 would have be generated in the return, you would have been able to allocate portions between RIC and the other securities amount but since a Form 1116 is not generated, separating the two amounts is irrelevant. 

[paulinus49]

Thank you for your reply.  I do in fact have more foreign taxes paid, but they were to specific countries from another brokerage account putting me over the $300 limit.  Which, of course, only complicates matters.  If it was only the one account, I agree with your analysis.  My hope is that the TT developers will tweak the program appropriately if enough users complain about confusing steps.  Thanks again.

[DaveF1006]

I noticed in the Foreign Tax Credit section that it mentions to select RIC if any income was received from a mutual fund or other Regulated investment company.  This indicates that a further breakdown is not necessary to be reported on your return.