Question

Foreign Tax credit form 1116

Forum|Forum|2 years ago
March 11, 2024
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On Form 1116 Part 1, Line 2 and 3 are confusing. Do we enter the sum of all expenses from Schedule E on line 2 as well as standard deductions on Line 3a? I would think either/Or. Nothing on Line 2 and Standard deductions on Line 3a(As I claim standard deductions on US returns and no schedule A? if I enter both foreign tax credit goes down. This does not seem right as its double expenses.

Aren't these typically mutually exclusive. Generally, you would either claim itemized deductions on Schedule A and report the total expenses on Line 2 of Form 1116, or you would claim the standard deduction and report it on Line 3a.

I do have rental income in India and so file Schedule E . I read that if you take the standard deduction on your tax return, you can still deduct certain expenses related to your rental income.

Please advise.

R

rogge1722

From the f1116 instructions:

"If you don't itemize deductions, enter your standard
deduction on line 3a, and don't enter on lines 2 through 5 any
deductions that would have been reported on Schedule A
(Form 1040). Don't include deductions and losses related to
exempt or excluded income such as foreign earned income
you have excluded on Form 2555 on lines 2 through 5."