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Level 3
posted Apr 14, 2024 10:57:57 AM

Why there is a reduction in foreign taxes adjustment in carryover calculation sheet by Turbotax?

Current year foreign tax paid: $198,886

Current year foreign tax allowed: $146,909

Unused and carried forward: $51,977

 

TurboTax took the Form 1116 Part III line 12 Reduction in Foreign Taxes number -$38,107 to reduce my carry forward amount from $51,977 to $13,870.

 

I am wondering why. Thanks!

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1 Replies
Expert Alumni
Apr 16, 2024 2:40:58 PM

When recording the information in the return, it sounds like you reported expenses and deductions against the foreign gross amount that was reported.  If you did this, you actually decreased your foreign tax credit carryover. you may wish to remove those entries made if this is the case.