Question

Form 1116-Foreign Tax Credit error “Adjusted Basis of Total investment assets” and the “Adjusted Basis of investment assets generating foreign income". Don't have.

Forum|Forum|5 years ago
April 29, 2021
1 reply
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I have read a number of answers relating to this and am still somewhat confused.

My foreign taxes accrued come from my company's K-1 for a number of different foreign countries.

We are a US based company.

I have the same issue of figuring out these two questions:

(b) Adjusted Basis of Investment Assets Generating Foreign Income

(c) Adjusted Basis of total investment assets.

This adjustment on Form 1116 is being generated by TT because it is calculating it against an interest expense carry over from previous years that was inputted by TT to offset a small amount on my K-1 box 17 A "investment income" of only $179. This K-1 is company generated and I am not sure how the investment income on box 17A was generated. My foreign taxes accrued are several thousand dollars so well above the $300/$600 amounts I have seen comments on. But again mine is a K-1 for business we do in foreign countries not from mutual funds.

So I don't know how to calculate these ratios. I can put $0 in for these totals to zero out the error message, but I know that isn't correct.

R

rogge1722

Employee

If TT raises an issue regarding “investment interest expense” and it is not relevant or the amounts cannot be calculated, here is a work around.

Bring up the f1116 computational worksheet and insert in the following lines:

4b (1) a = 0

4b (1) b = 0

4b (1) c = 1

C

coldcountrysouthAuthor

Thanks but it isn't allowing the override entry on 4b (1) a to equal 0 since that number is carried over from another form. I have on my K-1 box 17A as investment income so it allows me to write off the equivalent in Investment Income Expense on 4b(1)a of the equivalent amount shown on box 17A