Skip to main content

Solutions

Products

Recommended products

Questions? We are here to help.
Contact us

Purchase

Questions? We are here to help.

Resources

Form 1118, Foreign Tax Credit - Corporations

About the Income Sourcing Workpaper

The Income Sourcing Workpaper in foreign tax credit binders are used to allocate gross income account balances to designated source and country codes and to apportion any expense account amounts to one or more foreign source baskets. You must compute the binder (TAS, Compute) in order for balances to carry from the Working Trial Balance to the Sourcing workpaper.

Use the Income Sourcing Workpaper

The Sourcing Workpaper's populated based on the charts assigned to the binder. You can customize it to meet the needs of individual binders.
  1. In
    TAS
    , select
    Foreign Entity
    , and then
    Income Sourcing
    .
  2. Select the
    Sourcing Chart
    . This chart determines the source codes that appear as columns in the workpaper.
  3. Select
    Settings
     to filter the data.

Sourcing Workpaper columns defined

Sourcing Workpaper defined
Workpaper column
Description
Account / Additional Source Code Description
The Account Numbers and Source Descriptions (rows) appearing in the Sourcing Workpaper are from the International Summary Chart assigned to the binder. Federal Chart of Accounts Income Statement accounts are mapped to the Summary Chart using the International Cross-Reference Chart.
Original Trial Balance Amount
The Original Trial Balance Amount on the Sourcing Workpaper's the functional currency Adjusted Tax Balance from the Working Trial Balance (WTB) in TAS. The amount displayed for each Summary Account's the total of the adjusted tax balances of all Federal Chart of Accounts mapped to that row using the International Cross-Reference Chart. (Displayed when you select Original Trial Balance.
Trial Balance Amount or Override
Original Trial Balance Amounts carry to this column. When an override's present, a small red triangle appears in the cell. A text box lists the original TAS amount when the cursor hovers over the cell.
Amount to be Allocated or Apportioned
Represents the difference of the Trial Balance Amount less any allocated amounts. This column will be zero when the Trial Balance amount has been fully allocated to the Sourcing columns. Balances will remain in this column when an Apportionment Base Code's used.
Apportionment Base Codes
Remaining balances that have not been wholly allocated to one or more sourcing columns must be apportioned through the selection of at least one apportionment base code in the Apportionment Base Code column. The Apportionment Base Code determines the apportionment ratio to be applied to the field where the apportionment base code's entered. The ratio's determined based on the selection of previously allocated income amounts. Up to 3 base codes can be selected. If more than one base code's selected, the system will select the base code that best meets the optimization goal selected in Binder Properties.
Additional Source Code Amount
If the Sourcing Chart that's used doesn't include all of the necessary Source Codes, you can insert additional source codes on the fly by right-clicking the account and selecting Insert Source Code or you can modify the Sourcing Chart by selecting Delete Source Code from the sub-menu to delete an additional source code.
Sourcing Columns
Source Codes in the Sourcing Chart assigned to the binder display as Sourcing Columns. Depending on which Sourcing Chart's selected, different codes appear. It's common to create a Sourcing Chart for CFC purposes and another Sourcing Chart for FTC purposes. Up to 30 source codes (columns) can be assigned to a Sourcing Chart.

Manual data entry

Items calculated in the Organizer must be manually populated in the Trial Balance Amount or Override column, including:
  • Dividend received deductions (summary account types 7400, 7405 for Section 965 Cash, 7406 for Section 965 Noncash, or 7407 for Section 245A)
  • Capital loss carryover adjustments (summary account types 4410 to 4412 for short term, 4420 to 4422 for long term, or 4433 for collectibles)
  • Section 1231 loss recapture adjustments (summary account types 4430 to 4432 and 4434)
  • Contribution carryover adjustments (summary account type 5201)
  • Disallowed business interest expense carryovers (summary account types 5100, 4110, 5115, or 5160)
  • Net operating loss carryover adjustments (summary account type 7350)
Formulas for Source Code columns and Country Sourcing are initially populated manually or batch imported, then roll over to subsequent years. Populate
BAL
 as the formula in 1 source code column for each summary account to populate the remaining balance after other allocations. Specific amounts don’t roll over and must be populated each year.
For
Country Sourcing
, the EIN only automatically populates for the
Country of Operations
 for that entity. EINs or Reference IDs of other entities must be populated each year.

This article applies to:

  • PRODUCT: ONESOURCE Income Tax
  • Return type: international
  • Subject: Workpapers

error-icon

Triva isn't available right now.

Check out the support page for our phone number and hours

error-close