Does Form 1116 Line 18 calculate correctly? The IRS instructions allow adjustments to be made for qualified dividends yet the system does not appear to do this. Thoughts?

Forum|Forum|3 years ago
February 27, 2023
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JohnW152

There are no known issues with the Form 1116, line 18 calculation.

As you suggest, when you have qualified dividends (or capital gains), adjustments may be needed before accounting for those amounts on line 18.

Please see the Worksheet for Line 18 (Worldwide Qualified Dividends and Capital Gains) and the rest of the text pertaining to individual taxpayers under Line 18 in the Instructions for Form 1116.

If your calculation doesn't match what TurboTax is providing, please provide more details, referencing the worksheet or other relevant portions of the instructions, if possible.

grahamcottonAuthor

Hello JohnW152,

Currently line 18 appears to be just picking up line 15 of form 1040 (which is the starting point also for the Worksheet you mention). However, I have qualified dividends, which are shown on Line 3a of Form 1040, and I also have capital gains, which are shown in Schedule D - So I presume this means I have made the entries correctly in the system. However, there doesn't appear to be any adjustment made for this - it is difficult to check for sure as TurboTax does not provide the "Worksheet for Line 18".

There is also reference in the IRS instructions to the "Qualified Dividends and Capital Gain Tax Worksheet". This isn't provided in the TurboTax print copy but presumably is generated internally in order to calculate the taxes due. I have generated this form in order to calculate the taxes due and then this form is also used in completing the "Worksheet for Line 18".

Apologies that this is a bit wordy - pls let me know if there is something else that you need.

Thanks...