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Foreign entity returns

Current Year Taxes Paid/Accrued

The Current Year Taxes Paid/Accrued screen is used to enter foreign taxes paid (either through withholding, actual payments, or accruals).
The Current Year Taxes Paid / Accrued screen requires minimum amounts of 1, the selection of a foreign country, and that the functional currency detail sums to the total to prevent errors.
To prepare for the 8865 Schedule K-2 Part III Section 4 and Form 5471 Schedule E, we added
Unsuspended Taxes
 and
Type of Tax (8865 K-2 only)
and the related data entry report.
note
With the release of 2021.019, the
Unsuspended Taxes
 option default is not checked for any existing lines in a tax year 2021 binder. The value for
Type of Tax (8865 K-2 only)
 defaults based on the International Account Type for each account as noted in the screen. These same settings will appear as default values when you enter new lines.

Current Year Taxes Paid or Accrued Fields

Field
Description
Account/Entity Name
International accounts with an account type between 4800-4840 are displayed in the screen. Select
Accounts with Balances
 in the
Display
section of the menu to filter the list to only those accounts with amounts.
EIN
A unique nine-digit number that identifies your business for tax purposes.
Reference ID
Unique identifier
Country
Select a foreign country from the dropdown of all IRS-defined Country Codes available for the year. The system defaults to the country that has been selected as the Country of Operations on the International tab of the Binder Properties screen.
Date Paid or Accrued
Enter the date the taxes were paid or accrued.
Foreign Tax Year
Enter the foreign tax year.
U.S. Tax Year
Enter the U.S. tax year.
Unsuspended Taxes
Enter any unsuspended taxes.
Type of Tax (8865 K-2 only)
Seven types of tax that appear in the IRS instructions The default is based on the account type. The line automatically populates and defaults to the appropriate account type. You can change the selection, however, we recommend you use the default values.
Income Subject to Tax
Enter income subject to tax of 1 or more.
Amount in Local Currency
Enter the amount of 1 or more in local currency.
Translation Rate in U.S. Dollars
The system defaults to the Weighted Average (functional currency to U.S. Dollars) that you entered in the Exchange Rate Chart assigned to the binder for the country selected as the Country of Operations on the International tab of the Binder Properties screen.
Amount in U.S. Dollars
This is the U.S. Dollar translated amount of taxes that have been paid or accrued. This amount is calculated by multiplying the Amount of Functional Currency by the Translation Rate. This is also the amount that flows to the Post 86 Income Taxes Pools report for current year taxes paid.
Amount in U.S. Dollars
The sum of all the amounts entered in the Amount in Functional Currency column and the sum of all amounts in U.S. Dollars.
Translation Rate to Functional Currency
Enter the translation rate to functional currency. The system defaults to 1 divided by Weighted Average (functional currency to U.S. Dollars) under TAS in Currency Translation.
Amount in Functional Currency
This is the functional currency translated amount of taxes that have been paid or accrued. Detail lines must sum to the total Amount in Functional Currency.

This article applies to:

  • Product: ONESOURCE Income Tax
  • Return type: international

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