Foreign taxes not flowing to Form 1116

[David]

Single TP has > $300 foreign taxes. I haven't had to prepare form 1116 before.

The foreign taxes were entered into the 1099-DIV worksheet. However, they aren't transferring to the 1116. How do I get them to transfer?

Thanks.

[ILLMAS]

Have you put in a date? Try using 12/31/13

[Margaret CPA in OH]

Also make sure that you determine the foreign ordinary dividends and qualified dividends. At least in ATX, it autofills with the total on Lines 1 an 2. Rarely, in my experience, are the total divs foreign. Additionally, when you look at 1116, look at the drop down box on top and choose Passive.

[David]

Thanks for your help.

Most of the time I just see the total ordinary and qualified dividends. The foreign portion isn't shown. So I guess using the total amounts may be a problem.

What do you do when the foreign amounts aren't shown?

Thanks.

[Margaret CPA in OH]

Typically they are not shown on the main page of the 1099DIV. Most investment firms (at least with my clients) provide div details in additional pages and show which funds have foreign income and paid taxes. Many also just provide the totals at the end. American Funds apparently only provides percentages so you have to do the calculations. (Ask me how I know - client had this and it became a small issue as he wasn't happy to pay me to do it, his advisor couldn't/wouldn't tell him but he wanted the credit. Arrgghh!)

[joanmcq]

Don't put in anything but the tax & it will flow to the 1040 under the exception to filing a 1116, if under $300 for single or $600 for MFJ. If you put in anything else (and ATX will default to putting all the div as foreign as mentioned above) then it goes to the 1116 & the rest of the data has to be complete, including date.

[jklcpa]

OP said the foreign taxes withheld were greater than $300 for this single taxpayer, so the 1116 is required.

David, look for the foreign sourced income in the supplemental information as Margaret has suggested.

[mcb39]

Don't put in anything but the tax & it will flow to the 1040 under the exception to filing a 1116, if under $300 for single or $600 for MFJ. If you put in anything else (and ATX will default to putting all the div as foreign as mentioned above) then it goes to the 1116 & the rest of the data has to be complete, including date.

I had one yesterday that was under $600 for MFJ. ATX automatically opened the 1116. I deleted it and then the tax was reported properly. (I think)........

[Abby Normal]

Don't put in anything but the tax & it will flow to the 1040 under the exception to filing a 1116, if under $300 for single or $600 for MFJ. If you put in anything else (and ATX will default to putting all the div as foreign as mentioned above) then it goes to the 1116 & the rest of the data has to be complete, including date.

Thanks! I'll try that on the next one. I was getting red errors unless I entered dates, country, etc. so I was just feeding the beast what it was asking for.

[Max W]

Directly above page 1 of the form 1116 is a drop down box where it says "To view a specific 1116, select the category __________.

When you make the selection, the form will populate.

[David]

Thanks everyone for your help on this.

There was no supplemental information showing the amount of foreign sourced income. In that case what do you do?

[kcjenkins]

If you know the % you can work backwards to estimate the amount.

[David]

There were no % information included as well. Does everyone make the client get that information when a 1116 is required?

[michaelmars]

NO in almost every case the full amount is deductible and usually its not a large number to begin with. I have only seen one case this year where the 1099 didn't show the dividends that the foreign taxes were paid on.

[Margaret CPA in OH]

As I mentioned earlier, this is the first time I have seen this and it was with American Funds. Schwab, Vanguard, LP, others have all provided dollar amounts for both ordinary and qualified divs. I have often had to look up in my Mutual Fund Publishing reference books for Municipals and US Treasuries, but even now firms are doing a much better job with providing those percentages. For example Ohio does not tax interest on US Obligations or municipal income from Ohio or territories (Guam, Virgin Islands, Puerto Rico). Many folks will not have this or very little but a handful of my clients have significant investments in such and it does make a difference. And they appreciate that I know about this and look out for their bottom lines. Of course, I am also looking out for mine

[joanmcq]

I have one client I have to pull the info for foreign div from the statement. They give ordinary div info, but not qualified or cap gains. Grrrr. I've found the broker firms are doing a much better job in giving us the info we actually need to prepare the returns.

[Lion EA]

Sometimes the annual statement information is mailed separately. Sometimes its additional pages in the consolidated 1099 package. Your client might have it or can get it from their broker or online. It's April, and if it's just around $300 for foreign taxes and not thousands or enough to make a substantial difference in the return, I'd be tempted to let the program flow all the dividends or chose some proportional amount that still lets the full $300 be a tax deduction. I sure get less picky in April !! Or threaten to put them on extension; I bet they find the info for you.

[ILLMAS]

I just notice something odd with form 1116, if you enter information on the 1099 Div, then you click on form 1116 the page appears to be blank, but if you print out the form, the information appears, anyone else notice that?

MAS

[michaelmars]

THE screen is blank till you select which income category you want to see.