in part 1 (1i) for section 1250 gains and (1j) collectables. This has caused false errors to occur in the f1116 comp. incorporated a new feature starting in TY2016 for adjustments. Override them with zeroes to clear the error. ĭue to recent changes, false errors may appear on the f1116 wks. You may find on part 2 of Form 1116, it is necessary to type in the date for the fictitious Payers which will be the same as the actual Payer, usually. Then when we enter the Foreign Tax Credit Interview Section, we run them through in the same order greatest to the least. Assign to “A” the largest tax paid, then to “B” the 2nd largest and so on through to “F”. Using TT’s special instructions as a guideline, the following strategy is suggested. When multiple copies of form 1116 are needed, they have to be created in the right order. Now we consider countries “D”, “E”, “F” etc. Now when we go to the Foreign Tax Credit Interview Section, we are positioned to enter all the necessary data for each country individually. Click “Continue” back to the Main Screen. Put a zero In Box 1a and in Box 7 the tax paid to “C”. Click “Continue” back to the Main Screen.Īgain open up a New Payer. If the latter occurs, insert the data for “A”, then continue to the Main Screen.Ĭlick on the New Payer button. Either the Main Screen will appear or 2 consecutive screens asking for dividends paid and the source country. Navigate to the “Here’s the dividend info we have so far” screen displaying the name of the Payer. We have a 1099-DIV with Box 7 displaying the total tax paid to 3 foreign countries we will call “A”, “B”, and “C”. This is done by utilizing Dummy 1099-DIV's as illustrated by the following example. This addresses the issue of a 1099-DIV with Box 7 showing foreign tax paid to multiple foreign countries and it is necessary to identify and list the countries individually on Form 1116. The following technique restores this 1 to 1 ratio by creating additional payers to equal the number of countries. In the past, if there were more countries than Payers, using “Various” was the technique used to restore the 1 to 1 country/payer ratio. A significant shortcoming of TT is that if you have to fill out Form 1116, it can support only one country per Payer.
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