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Colleagues:
Hopefully someone can help me now that April 15 is done!
I constantly have difficulty with inputs for the Foreign Tax Credit.
The Screen 35 inputs are easy, no problems there. The routine entries for dividends on Screen 12 are also easy. But I cannot figure out the proper way to do entries for the Foreign Tax Credit on the Dividends screen.
The 1099 reports foreign taxes paid, fine. And usually at the end of the 1099 will be a statement of the foreign income received and the associated foreign tax paid. In the Foreign Tax Credit section of Screen 12 it asks for "percentage foreign or amount, if different - Total Ordinary Dividends" and for qualified dividends and for capital gains distributions.
So assume that the 1099 says the following:
Total Ordinary Dividends $7,020
Qualified Dividends $2,963
Foreign taxes paid $76
Foreign dividends received $1,088
The 1099 is reporting total foreign dividends (i.e., no breakdown between qualified and nonqualified. So how do I allocate? And, more fundamentally, what do I put where? I would assume that I put 1088 in the "percentage foreign or amount - total ordinary" field, but when I do that the numbers on the 1116 do not match the actual amount of foreign dividends!
Help!
Micah
Best Answer Click here