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jstevensr
March 16, 2021
Solved

Why is my 'Utilized" Foreign Tax credit so small on From 1116 when I have lots of income?

  • March 16, 2021
  • 1 reply
  • 0 views

Why does the Form 1116 Comp Wks only utilize $9 of the 527 Foreign Tax Credit Carryover that I have available?

Best answer by rogge1722

is the amount on 1040 line 16 greater than $9?

1 reply

R
rogge1722Answer
Employee
March 16, 2021

is the amount on 1040 line 16 greater than $9?

    DaveF1006
    DaveF1006
    March 16, 2021

    The IRS limits the foreign tax credit you can claim to the lesser of the amount of foreign taxes paid or the U.S. tax liability on the foreign income. The excess limit is created when the U.S. taxes on that foreign income are greater than the foreign taxes paid.

    **Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"
      J
      jstevensrAuthor
      March 17, 2021

      I know that what you state below is true, but on which worksheet and with what logic does TurboTax calculate "U.S. tax liability on the foreign income"? I can't seem to find any completed "income" fields on the single  "Passive Income" form 1116 I have completed for the total dividend income from the 1099s and two K-1s that I connect to it because I paid the Foreign Tax on these dividends via those accounts. All I see 

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