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Screen 1116 - Foreign Tax Credit (1041)

Overview

Use this screen to complete Form 1116, Foreign Tax Credit and the Foreign Tax Worksheets. If you'd rather claim a deduction for foreign taxes you've entered on this screen (or the Income screen), go to the OthCr screen in the Credits folder and enter
X
 in the
Report all foreign tax as a deduction
 field.

Part I - Income or (Loss)

Information you enter in this section calculates the Form 1116, Page 1 Detail worksheet. Enter 100 percent of the foreign income and expenses that correspond to the country you enter below. To allocate amounts between the estate or trust and its beneficiaries go to View, Beneficiary Information, Federal Tab, then Other Allocations . The fiduciary portion on this worksheet consolidates into one Form 1116 for each income category.
Name of country
You must enter a country to calculate Form 1116. If you've entered foreign taxes on the Income screen, this field displays "Various".
Foreign source: Gross income
Enter the gross foreign income, including foreign source qualified dividends and gains included on Form 4852, line 4g. Do not include other foreign capital gain amounts you entered on this screen. Foreign capital gain adjustments calculated on the Foreign Tax Credit Worksheets, if applicable, adjusts the foreign gross income amount.
Qualified dividends
Enter foreign qualified dividends less the amount of foreign qualified dividends included on Form 4952, line 4g. Form 1116, line 1 is adjusted as necessary. Foreign qualified dividends are considered to be a portion of the ordinary dividends included in the
Foreign source: Gross income
 field.
Foreign source: Short-term… / Long-term capital gain / loss
Enter short-term and long-term foreign capital gains and losses to calculate the Foreign Tax Credit Worksheets. Enter long-term foreign capital gains less the amount for foreign source gains included on Form 4952, line 4g. Enter a loss as a negative number.
Pro rate share of: Itemized or standard deductions
Real estate taxes are the only deductions that allocate to foreign income. Because real estate taxes are an adjustment for AMT purposes, they are not included on the AMT version of Form 1116. Use this field to override the amount of itemized deductions. If the amount is different for AMT purposes, enter that amount in the
AMT, if different
 field.
Foreign source losses
Enter the amount of foreign source losses (other than foreign source capital losses entered on this screen) for Form 1116, line 5. If the amount should be different for alternative minimum tax purposes, enter the adjusted amount in the
AMT, if different
 field.

Part II - Taxes Paid or Accrued

To allocate foreign taxes paid amounts go to View,  Beneficiary Information, then the Federal tab .
Date foreign taxes paid or accrued
The IRS does not accept "Various" as a valid date entry for electronically filed returns, entering
Various
in the
Date foreign taxes paid or accrued
 field will generate the year-end date of the return for the electronic file.

Part III - Credit Calculation

Reduction in foreign taxes
Since this item doesn’t allocate between the fiduciary and the beneficiaries, enter only the estate’s or the trust’s portion of the reduction.
Adjustments
Since this item doesn’t allocate between the fiduciary and the beneficiaries, enter only the estate’s or the trust’s portion of the adjustments.

This article applies to:

  • PRODUCT: UltraTax CS
  • Return type: 1041 Fiduciary
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