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|6 years ago
June 3, 2019
2 replies
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My 1099 doesn't provide the requested basis amounts. Do I really need to get the total basis for each fund with foreign assets, and then multiply the percent of foreign assets in that fund, and then total all those to get this number? If this is a required input, why isn't it already calculated on the 1099? I'm told other tax programs don't ask for this information.

TurboTax Deluxe Windows

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pk12_2

If you are trying to get foreign tax credit for foreign taxes paid on Mutual funds , you have to provide the foreign income from those funds ---- because allowable foreign tax credit for the current year is based on ratio of foreign income to world income. Most mutual fund brokers statements do identify the allocated foreign taxes paid but not the foreign earnings --- they usually provide the percentage earnings from foreign sources and it is up to you to compute the actual foreign income that was subject to foreign tax.

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John D

The reply above talks about proportion of total income, which I can find on my broker statement.... but the TurboTax questions related to this and completing Form 1116 are assets about the adjusted basis of the investment assets that generate the foreign income.... so adj basis of assets amount generating the income and not the income number itself???

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pk12_2

@John D m while the reply above is an old thread , it was intended for cases where the foreign tax credit is above the safe harbor amount ( $300 for single and $600 for joint filers ). The foreign income to world income ratio is used to generate allowable foreign tax credit allocation of the total US taxes i.e. Foreign Tax credit worksheet, uses the world income to compute the US taxes and then allows credit of the US taxes for the portion contributed by the foreign income thus the credit can never be more than US total tax on world income.

Does this answer your query or did I misunderstand your question/comment ?

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dahlialady8

I need to remove the foreign taax paid credit from TurboTax

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pk12_2

@dahlialady8 , generally speaking to remove the "request" for foreign tax credit, you have to go back to the screen where chose that (a) you have foreign taxes paid and (b) chose foreign tax credit rather than deduction. Therefore please tell me a little bit more what your situation is --- is this from earnings and taxes reported on a 1099-DIV or a broker's consolidated statement; or is this for foreign earnings beyond the exclusion limit or what ? I am looking to understand the type of income / source of income that has been taxed at source. Are you US citizen/Resident ( Green Card)/ Resident Alien for tax purposes or what ? If indeed you paid foreign taxes on foreign income why do you not want to take credit or deduction for it ?

Perhaps you can answer my questions and then we can take care of how to eliminate the offending item, please ?

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Dc187jbja

This is a first time 1099 DIV. Grand total of proceeds only 188.00. The .88 foreign tax paid-- can I just not report this? On Turbo tax do I have a place to report not using it?