Question

Foreign Income

Forum|Forum|1 year ago
February 12, 2025
1 reply
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Downloaded my brokerage statement. On 1099DIV I had Germany Income from 2 companies : Daimler Truck Hldg & Mercedes-Benz Group (respectively $510.58 & $2992.35) for a total of $3502.93

FRom the same brokerage was a 1099 INT for CD Interest for State bank of India. Total Int $409.87 No foreign taxes paid.

Plan to file form 1116 to apply taxes paid to my tax due on the 1040. On my 1040DIV worksheet, I need to correct errors. So I will list total foreign income at $3912.80 Qualified is $3502.93. As you can tell, the difference is the CD interest from India.

For the time being on form 1116 line 7B I linked the form. Then on line 7C I checked Box A

Now lets go to line 8. They want to have listed the country. Since I have Germany and India, I think I need to click RIC. IS THIS CORRECT? Do I have to show Germany in A and then India in B --How to do this?

Then there is a subline that asks if its a mutual fund (GERMANY IS NOT -STOCK DIVIDEND) OR a regulated investment company. I dont know if I need to check this box or not? Germany is stock Dividend and India was CD interest

Hoping someone can easily help clarify how to mark these boxes. Keep in mind Germany is Dividend and India is Interest - all on the same brokerage 1099.

DaveF1006

Yes, in the first instance, you would select various as a option. If that option is not listed as a choice, you would select RIC. When it asks if this is a mutual fund, do not check this box.

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R

Rick9464Author

Dave, I was thinking that I only show the Germany income instead of the "total" foreign income. My logic is that on the 1099int portion the Foreign interest is listed as taxable income. So since I will be paying tax on the interest foreign income, I felt that just listing the foreign dividend income would be sufficient and accurate . The is where the only foreign taxes were paid and recorded on the 1099div portion of the statement.

I wondered if I listed the interest in the total foreign income, I might be double taxed since its already in the 1099int portion.

What do you think?

Also wondered your thoughts on this. I apply this as a foreign tax credit to my federal tax due. Based on all the program math, I never get the full amount as a credit to my tax due. Its always a percentage. so I now have about 3 years of carry over that is listed in the TT program. Will I be subject to eventually losing these carryovers? Including this year I might have about 1000.00 in total carryover for 3 years. Really dont know why I cant use the full amount and avoid these carryovers or is there some way I can use them? OR do we just continue to carry them on and on?

Thanks for your input.

DaveF1006

I am not sure what you mean by entering the interest as total foreign income. If you are referring to listing this as other Gross income when working in the Foreign Tax Credit, then no, you will not list this. This won't double your taxable income but would affect the calculation of your foreign tax credit.

Foreign tax carryover's can be carried back one year or carried forward for the next ten years. If you are unable to take advantage of them by offsetting these with foreign income, they remain until they drop off.

@Rick9464

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