Form 1118

Form 1118

A form that a corporation files with the IRS in order to claim the foreign tax credit, which is a direct, dollar-for-dollar reduction in the corporation's U.S. tax liability due to taxes levied by a foreign government.
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The FOGEI and foreign tax credit limitations are calculated and disclosed on Form 1116, Foreign Tax Credit (Individual, Estate, or Trust), and on Form 1118, Foreign Tax Credit--Corporations.
Corporations claiming the foreign tax credit report their foreign source gross income, deductions, and taxes on Form 1118, Foreign Tax Credit--Corporations.
If DC is required to include FC's income as a deemed dividend under Subpart F, it may consider claiming foreign tax credits for foreign taxes deemed paid on the Subpart F earnings by filing Form 1118. The amount is reported on Form 1118, Schedule A, and DC will have to show the supporting earnings and foreign tax information on Form 1118, Schedule C.
IT-MAP is made up of four modular components: International Electronic Tax Package (I-ETP) software for collecting, classifying and adjusting financial accounts; Foreign Tax Credit (FTC) software for calculating foreign tax credit and generating Form 1118; Controlled Foreign Corporation (CFC) software for analyzing earnings and profits, as well as Subpart F income and generating Form 547 1; and Foreign Sales Corporation (FSC) software for handling grouping and pricing alternatives and calculations, as well as generating Form 1120-FSC.
* Review Form 8895, One-lime Dividends Received Deduction for Certain Cash Dividends from Controlled Foreign Corporations, Form 1118, Foreign Tax Credit--Corporations, and other tax return information for consistency and accuracy;
Corporations report the foreign income and taxes related to the credit on Form 1118, Computation of Foreign Tax Credit--Corporations, filed with their income tax returns.
If reported on this schedule, the income and section 78 gross-up amount would then reconcile to the taxpayer's Form 1118.
The RIC must also file, as part of its return for the tax year, Form 1118, Foreign Tax Credit--Corporations, modified to support the foreign tax passthrough election.
Data are collected from tax forms (in this case Form 1118) by SOI field staff and are subjected to error resolution by analysts at National Headquarters.
Although no decisions are final, the IRS has grouped the return's forms and schedules into four categories of filing methods: (1) XML format; (2) summary of transactional data; (3) PDF format; and (4) alternatives for filing international forms (other than Form 1118).
The Foreign Tax Credit Study collects data from Form 1118, which taxpayers file to claim their foreign tax credit.
With regard to income statements, if a foreign tax credit is claimed, then the income statement information is required to be reported on Form 1118. Taxpayers should be exempted from filing Form 8858 for these entities.