Enter foreign taxes paid as a deduction or credit
Follow these steps to take foreign taxes paid as a deduction, or to claim the tax as a credit.
- Do 1 of the following to take the foreign tax as a deduction:
- Leave the1116screen blank and enter the tax in theTaxes, not entered elsewherefield on theDeductscreen in theDeductionsfolder.
- Enter the information on the1116screen in theK1 1065 & 1120Sfolder,K1 1041folder, orCreditsfolder. EnterXin theReport all foreign tax as a deductioncheckbox on theOthCrscreen in theCreditsfolder.
- To take a foreign tax credit if the type of foreign income is interest or dividends, enter the tax information at the same time you enter income information in theInterest incomeandDividendsfields on theIncomescreen in theIncomefolder.note
- UltraTax CS automatically marks theX if Foreignfield when you enter an amount in theForeign AmountorForeign Tax Paidfields. You may also mark this field if the amount entered in theInterest Amountfield is foreign, but there's no foreign tax paid. When you mark this field, the amount is considered foreign and transfers to Form 1116, and is included in the calculation of the foreign tax credit.
- The foreign columns in statement windows only display if you enter foreign data. To display the foreign columns while in the statement window, selectColumns, thenForeign Columns.
- The foreign income and tax information you enter in these statement windows transfers automatically to the1116screen. Don't enter this information again on the1116screen. If the type of foreign income isn't interest or dividends, or you decide not to use the statement windows on the Income screen, enter the information on the1116screen in theCreditsfolder.
- If the type of foreign income is from a pass-through activity, enter the information on the1116screen in theK1 1065 & 1120S or K1 1041folder.
