* Individual foreign tax credit (Form 1116
):This campaign addresses compliance by individual taxpayers in computing and claiming FTC limitations on Form 1116
, Foreign Tax Credit.
Presence or absence of special Forms or Schedules (Form 2555, Form 1116
, Form 1040 Schedule C, and Form 1040 Schedule F).
Then, the deduction cannot be taken directly on Form 1040, and Form 1116
must be filed; our office can assist with that form, if it's necessary.
In this case, you may be able to claim the taxes paid as an itemized deduction on Form 1040 Schedule A or claim the taxes paid as a foreign tax credit on Form 1116
. For many investors these amounts are small and easily overlooked.
A taxpayer claims the FTC by filing Form 1116
, Foreign Tax Credit, with an income tax return.
If you did not complete Part III of Form 6251, enter the amount from line 28 of Form 6251 on line 17 of the AMT Form 1116
and go to Step 7 on page 8.
Also, while the program correctly determined the taxpayers' gross income from foreign sources and from all sources on a supporting schedule, we were unable to generate form 1116
to compute the foreign tax credit owed the taxpayers from their international mutual fund investments.
shareholders, those shareholders must report the CFC's earnings and foreign taxes paid on Form 1116
or 1118 (Computation of Foreign Tax Credit).
These adjustments are complex, and many tax practitioners rely on the instructions to Form 1116
, Foreign Tax Credit, and IRS Publication 514, Foreign Tax Credit for Individuals.
Unless otherwise stated, the statistics reported in this article are based on data compiled from Form 2555, Foreign Earned Income, Form 2555-EZ, Foreign Earned Income Exclusion, Form 1116
, Foreign Tax Credit, and Form 1040, U.S.
If you have a larger amount of foreign dividends withheld in a given year, you generally must file IRS Form 1116
to claim a tax credit.
The IRS does not allow electronic filing of returns with foreign addresses or for taxpayers who use Form 1116
, "Foreign Tax Credit."