Question

Form 1116 - Query on "Definitely related expenses" for foreign rental property

Forum|Forum|1 year ago
March 26, 2025
2 replies
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Appreciate any help on this as I can't find any previous notes on it:

- I have a foreign rental property, and I enter the foreign income generated from it into Form 1116. I enter the full Gross rental (let's say $10,000)

- At this screen it asks for "Definitely related expenses", which I assume means all of the mortgage expense etc. All of these expenses are recorded in Schedule E where they should be

- However, the checkbox at the bottom "Show me my deductions" states that I shouldn't record any numbers here, because I'm taking the standard deduction

My question is: should I zero these numbers out, or not? The screen shot below shows the screen, with the numbers zero'd out

Thanks in advance!

TurboTax Premier Online

D

DavidD66

Yes, if you are not itemizing your deductions on Schedule A, you should zero out those deduction amounts.

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R

rogge1722

From the F1116 instructions on p. 17 under "Lines 2 through 5-Deductions and Losses".

"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."

No mention is made with regard to adjustments in Schedule E.

S

Sky MileAuthor

Thank you for this @rogge1722 . I read this as "If you're taking the standard deduction, don't enter any expenses that you would otherwise itemize on Schedule A". However, mortgage interest and depreciation on a foreign rental wouldn't be itemized on Schedule A, only on Schedule E. Does that mean that the "don't enter any expenses" part is not applicable in this case?