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Foreign income from all sources, line 3e form 1116

jslandson
Level 1

I am getting several K-1s with foreign income from all sources, 16B.  I believe that the correct entry in Lacerte is to go to screen 35.1 and in the general section under Gross Income from All Sources (A) I add this amount from 16B.  This also occurs when I get a 1120-S K-1 on 14B where I need to enter the information on 14B from the 1120S K1 to the individual module.

Am I doing this correct as it ends up affecting line 3e on form 1116 for the individual return.

Thank you.

Joel

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if your foreign income (Line 16) on the partnership K-1 is part of the income in the taxable income lines (e.g. business income, rental income, etc.), the taxable income on the K-1 would be included on line 3e.

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6 Replies 6

Why not enter the info in Screen 20 under Section 16?

What you entered on screen 35.1 would affect the foreign income percentage line f, but should not change line 3e.  

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jslandson
Level 1

Hi,  Thank you for your suggestion.  On screen 20, section 16 there doesn't appear to be a place to put the information for B (gross income from all sources) so by making the adjustment to gross income in 35.1 I'm adjusting line 3e which then changes the percentage in 3f.  Lacerte doesn't offer an option that I can see, except for 35.1, to adjust the percentage in 3f unless I use screen 35.1.

Where in section 16 do you suggest I enter the information for "B"?

Thank you, again, for your response.

Joel

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What is "B"?  Did you mean Column B on Form 1116?

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jslandson
Level 1

Hi,  16B on the K-1 is Gross Income from all Sources.  Lacerte, in screen 20, allows you to make direct entries for A then they group C,D, E, F and G in another box, then I in a separate box then L, M, N, O in another box and then P, Q in a final box.  There is a glaring omission where to put any information from 16B and that is why I am thinking that the only way is to make an adjustment to gross income from all sources in screen 35.1.

I really appreciate your interest and comments.  I hope my reply helps explain it better.

Joel

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I have never done a partnership return with 16c foreign gross income.  

My understanding/observation has been that 16b is the sum of 16c thru h.    All K-1's i've handled have been this way.

Therefore in Lacerte personal entry screen 20, the Gross income CDEFGH is basically 16B.  The info there would flow to  form 1116 Line 3d for that particular foreign country.  (You first set up the country in Screen 35 and cross reference to the country in Screen 20.)  This way, you handle the FGI in Screen 20 without having to do a separate workpaper for Screen 35. If you have a workpaper, it would be more like a control worksheet and you would have to check the numbers if the total is off from Lacerte 1116. 

My guess for Line 16b, as itemized by 16 c e  and h has to do with the allocation to the partners.  16 c has to be allocated to the particular partner because the FGI was generated at the partner's level.  16e and h would be allocated based on the partnership percentages, but would be just an educated guess without further research.  As i said i haven't dealt with a 1065 that has 16c gross income. 

 

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if your foreign income (Line 16) on the partnership K-1 is part of the income in the taxable income lines (e.g. business income, rental income, etc.), the taxable income on the K-1 would be included on line 3e.

View solution in original post

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