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Foreign tax credit - Form 1116

Form 1116, Line 1a calculation

The amount of gross income from sources within the country generally equals the total income from the category of income indicated in lines a through d and the country indicated in line g of Form 1116.
Per Form 1116 instructions, line 1a can be affected by a few different factors.
  • Taxpayers may be required to make certain adjustments to foreign source qualified dividends or foreign source capital gains or losses. Go to
    Tax Forms
    ,
    Federal
    ,
    1116 Foreign Tax Credit
    ,
    Page 1 By Country
    , and then Country Name. Drill down on line 1a. This yellow workpaper outlines details of the calculation, including a line for foreign source capital gain net income as adjusted.
  • Review Forms 1099-INT, 1099-OID, 1099-DIV, Brokerage Statement (consolidated 1099), or Schedule K-1 with foreign amounts and ensure these documents have the same foreign country and foreign income type as
    Organizer
    ,
    Foreign Information
    ,
    Foreign Tax Credit
    ,
    Foreign Country
    ,
    Foreign Tax Credit Information
    .
    note
    The ordinary dividends and qualified dividends entered in Form 1099-DIV or Brokerage Statement are used unless entries are made for foreign dividends if different and foreign qualified dividends if different.
  • If amounts aren't linked from source documents or Schedule K-1, go to
    Organizer
    ,
    Foreign Information
    ,
    Foreign Tax Credit
    ,
    Foreign Country
    ,
    Foreign Tax Credit Information
     and review the amounts entered for the foreign tax credit.
    note
    The amount entered for ordinary dividends should be the difference between total dividends and the qualified dividends. If all the dividends are qualified, enter NONE for ordinary dividends. Form 1116, Line 1a may not be correct if an entry is made for qualified dividends, but not ordinary dividends.

This article applies to:

  • PRODUCT: ONESOURCE Income Tax Express RS
  • Return type: 1040 Individual
  • Subject: Credits

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