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May 24, 2020
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Error "Form 1116 (COPY 1) -- Foreign Tax Credit Comp Wks: Qual Div and LT Cap Gains should have a value of at least $XXXX." What do I enter? Why didn't TurboTax enter it?

  • May 24, 2020
  • 2 replies
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The error page gives no information on how i should figure out what number to enter.  It seems like turbotax should have asked the right questions earlier in order to figure out what number should go here?
Best answer by rogge1722

During the interview, there is a screen that asks if you have any expenses or adjustments to be entered.  If you did, then there would have been a screen asking for the foreign qualified dividends during the interview. If there were no expenses or adjustments, then the interview would have been completed without that screen appearing.  So TT is asking you after the interview the amount of the foreign qualified dividends.  That amount will be inserted in line 1h. Bear in mind, TT can calculate the minimum but the actual amount may be larger and only the user can determine that actual amount from the broker’s supplemental info.  You should have that amount in cell B2 of the spreadsheet. The equation at the top displays how TT calculated the minimum, not the actual amount.

2 replies

Employee
May 24, 2020

From the 1099-DIV Worksheet.

The minimum foreign qualified dividends = 1b +7d -1a.

  

The following procedure provides more details.

Open a new spreadsheet.

Column A is used  for both qualified and unqualified dividends, aka. “Ordinary dividends”.

Column B is used for qualified dividends only.

 

In cell A1, insert the worldwide ordinary dividends. This is the amount in the 1099-div, box 1a.

In cell A2, insert the foreign ordinary dividends. This amount is derived from the broker’s supplemental info.

In cell A3, subtract A2 from A1.  The result is the U.S sourced ordinary dividends.

 

In cell B1, insert the worldwide qualified dividends. This is the amount in the 1099-div box 1b.

In cell B2, insert the foreign qualified dividends. This amount is derived from the broker’s supplemental info.

In cell B3, subtract B2 from B1. The result is the U.S. sourced qualified dividends.

 

Each cell in column A must be equal to or greater than the corresponding cell in column B. If that is not the case then there is an error. Recheck all entries.. 

May 27, 2020

rogge, I'm not sure what you're trying to say and it looks like you copied and pasted it from a question someone else had.  It doesn't really provide an answer for this field.

 

I'm assuming that TurboTax is supposed to calculate a number and put it in the "Qual Div and LT Cap Gains" field for me based on my answers to interview questions earlier.  (I consider it a TurboTax bug if we're just thrown into the underlying worksheets at the end and told there's an error, when there's nothing I didn't fill in during the interview.)  The worksheet field is empty and there's no guidance as to how that field should have been calculated.

 

I'm assuming it comes from the "Foreign dividends received" field in the "Tell us about your foreign dividends" page.  On this page, it says "You entered $XXX of foreign taxes paid. Now enter the portion of the $XXXX dividends and distributions that was from a foreign country or U.S. possession."  The corresponding help screen says "The dividends in box 1a of your 1099-DIV may include income from a foreign country. One sure way to tell is if you see any foreign tax in box 7.

To determine what portion of box 1a consists of foreign dividends, examine the paperwork that came with your 1099-DIV. There should be a details section that lists the income that was subject to foreign tax, the tax amount, and the country or countries it was paid to."

 

My paperwork does list out foreign vs non-foreign dividends.  I added up the dividends that were foreign and put them in the box on this screen.  Note that the wording on the page and help text implies that this is *all* dividends since it says 1a - it doesn't say anything about just qualified.

 

Now, I do have three separate 1099-DIVs because I have three investment accounts.  So the screen comes up three separate times and I've entered the corresponding foreign dividend amount in each of the screens.  Every transaction is listed as country=Various.

 

On the 1116 error screen, it looks like turbotax put the the sum of those three numbers I entered into 1c, 1f, and 1g.

 

The paperwork I got does list which income is qualified vs unqualified.  So is this 1h box supposed to just have the sum of foreign dividends that is listed as qualified?

 

In other words - I didn't enter anything wrong during the interview, and turbotax just failed for some reason to ask this question during the interview?

rogge1722Answer
Employee
May 28, 2020

During the interview, there is a screen that asks if you have any expenses or adjustments to be entered.  If you did, then there would have been a screen asking for the foreign qualified dividends during the interview. If there were no expenses or adjustments, then the interview would have been completed without that screen appearing.  So TT is asking you after the interview the amount of the foreign qualified dividends.  That amount will be inserted in line 1h. Bear in mind, TT can calculate the minimum but the actual amount may be larger and only the user can determine that actual amount from the broker’s supplemental info.  You should have that amount in cell B2 of the spreadsheet. The equation at the top displays how TT calculated the minimum, not the actual amount.

April 3, 2024

It does seem ridiculous that TurboTax continues to handle Foreign Tax Credit this way over all the years.