Foreign Tax Carryover Statement

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Copernicus
Posts: 315
Joined: Thu May 16, 2013 4:38 pm

Foreign Tax Carryover Statement

Post by Copernicus » Thu Mar 22, 2018 8:49 pm

First year using TurboTax. Until now, the tax accountant has two pages of Foreign Tax Carryover Statement. Pages 1 and 2 have the same title, but numbers are different, page 2 numbers are higher. He says he had used Simplified Method for foreign tax credit. I paid AMT each year. My foreign tax paid is less than $ 2000. Now, TT asks me whether I have carryover numbers from the past years, which it seems that I do.

I have attempted to, but am not able to understand from 1116 Instructions and Pub 514.
- Can anyone shed light on what these numbers do?
- What are pages 1 and 2 of the old statement? TT also has two pages to enter historical numbers.
- Are these numbers used when using simplified method for foreign tax creditor when using alternate method?
- Is there any benefit of completing these entries now, if these become necessary in future?

Thanks!

Random Poster
Posts: 1608
Joined: Wed Feb 03, 2010 10:17 am

Re: Foreign Tax Carryover Statement

Post by Random Poster » Fri Mar 23, 2018 9:05 am

I don't fully understand your questions, but:

You might have had a "regular tax" carryover statement and an "AMT" carryover statement. Or you may have a carryover statement that shows what credits are available for this year, and another carryover statement showing what credits are available for next year. It is hard to know without seeing the statements.

I've never used the simplified method in regards to Form 1116, so I can't help you there.

Copernicus
Posts: 315
Joined: Thu May 16, 2013 4:38 pm

Re: Foreign Tax Carryover Statement

Post by Copernicus » Fri Mar 23, 2018 11:43 am

Random Poster wrote:
Fri Mar 23, 2018 9:05 am
I don't fully understand your questions, but:

You might have had a "regular tax" carryover statement and an "AMT" carryover statement. Or you may have a carryover statement that shows what credits are available for this year, and another carryover statement showing what credits are available for next year. It is hard to know without seeing the statements.

I've never used the simplified method in regards to Form 1116, so I can't help you there.
Thanks for trying to help. The two pages are titled the same, "Foreign Tax Credit Carryover Statement (Page 1 of 2)" and "Foreign Tax Credit Carryover Statement (Page 2 of 2)". Each has columns going back 10 years. Details are filled in for only two years in each return.
Details are in rows for foreign tax paid, FT limit available, maximum credit allowable, unused /excess foreign tax, and unused/excess limit remaining.
:confused

Wagnerjb
Posts: 7190
Joined: Mon Feb 19, 2007 8:44 pm
Location: Houston, Texas

Re: Foreign Tax Carryover Statement

Post by Wagnerjb » Sat Mar 24, 2018 11:39 am

I worked overseas for 7 years, and my company paid Price Waterhouse to prepare my US (and foreign) income tax returns. I had a significant amount of foreign tax credits that were carried forward each year.

Price Waterhouse prepared two forms 1116 - one regular, and one for AMT purposes. They also attached supporting schedules of the FTC's by year, similar to the ones you describe. There was one schedule for regular FTC carryovers, and another form for AMT FTC carryover amounts. The amounts on the two schedules were different, but they tied to the two forms 1116 that were included in my tax return.

I wonder if this isn't what is happening for your return, but with attachments that aren't clearly labeled.

Best wishes.
Andy

Copernicus
Posts: 315
Joined: Thu May 16, 2013 4:38 pm

Re: Foreign Tax Carryover Statement

Post by Copernicus » Sat Mar 24, 2018 3:45 pm

Thank you, Wagnerjb!

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