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Level 2

# Smart Check Error on Foreign Tax Credit Computation Sheet

I just ran though a Smart Check on my federal return and error popped up stating, "Form 1116 (Copy I) -- Foreign Tax Credit Comp Wks: Qual Div and LT Cap Gains should have a value of at least \$8744 based on the 1099 DIV worksheets that are linked to this country," and TT is asking to input a value directly into the Form even though I thoroughly answered all of the Easy Step questions on this topic.

My foreign tax credit stems from a broad international equity mutual fund investment (I used RIC as the country).  I have no idea where TT is getting the \$8744 figure.  I've looked at the 1099 DIV associated with this investment and don't see it there.  And I've looked at the rest of the Foreign Tax Credit Computation Sheet for clues and came up empty.  I just have no idea how to fill in the blank on the worksheet that the Smart Check error refers to.

Any help or direction would be most appreciated.  I'm at a loss.  Thanks.

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2 Replies
Level 9

## Smart Check Error on Foreign Tax Credit Computation Sheet

From the 1099-DIV Worksheet.

The minimum foreign qualified dividends = 1b +7d -1a.

The following procedure provides more details.

Column A is used  for both qualified and unqualified dividends, aka. “Ordinary dividends”.

Column B is used for qualified dividends only.

In cell A1, insert the worldwide ordinary dividends. This is the amount in the 1099-div, box 1a.

In cell A2, insert the foreign ordinary dividends. This amount is derived from the broker’s supplemental info.

In cell A3, subtract A2 from A1.  The result is the U.S sourced ordinary dividends.

In cell B1, insert the worldwide qualified dividends. This is the amount in the 1099-div box 1b.

In cell B2, insert the foreign qualified dividends. This amount is derived from the broker’s supplemental info.

In cell B3, subtract B2 from B1. The result is the U.S. sourced qualified dividends.

Each cell in column A must be equal to or greater than the corresponding cell in column B. If that is not the case then there is an error. Recheck all entries.

Level 2

## Smart Check Error on Foreign Tax Credit Computation Sheet

Thanks.  I think I figured out the problem.  Not as complex as you mentioned.

TT's Easy Steps does not ask for information regarding the particular international equity fund's Qualified Foreign Dividend Income as a percentage of my 1099-DIV box 1a amount.  Once I looked up the correct percentage supplied my brokerage firm, made the calculation and filled in the Worksheet Column A amount that Smart Check said was missing for the qualified div and LT cap gains line, the worksheet then completed itself and the error disappeared.

It would be nice if TT's Easy Steps addressed the question more directly.  Sending people to IRS forms when it isn't necessary just complicates the preparation process, IMHO.

Thanks again