According to my brokerage statements I paid $2,700 in foreign taxes that I could get a credit for; but I am way into AMT and lose it all when I file a 1116.
Can I not report $1,700 of the taxes paid? Then I am under $1,000, don't have to file a 1116, and get the $1,000 credit.
I know I can carry the credit forward or backwards, but I am always in AMT and never get to use the credit, so that doesn't work. I just solved the problem for the future by selling most of my foreign stocks... I don't know why I didn't think of that years ago.
Its a credit. If I have $800 in foreign taxes paid, I get $800 in credit. No? That is what happens when I run H&R Block at Home. (Taxcut was a much better name; why did they change it?)
If you paid income tax to a foreign country, you may be able to take this credit. Generally, you must complete and attach Form 1116 to do so.
Exception. You do not have to complete Form 1116 to take this credit if all of the following apply. All of your foreign source gross income was from interest and dividends and all of that income and the foreign tax paid on it were reported to you on Form 1099-INT, Form 1099-DIV, or Schedule K-1 (or substitute statement).
The total of your foreign taxes was not more than $300 (not more than $600 if married filing jointly).
You held the stock or bonds on which the dividends or interest were paid for at least 16 days and were not obligated to pay these amounts to someone else.
You are not filing Form 4563 or excluding income from sources within Puerto Rico.
All of your foreign taxes were:
Legally owed and not eligible for a refund or reduced tax rate under a tax treaty, and
Paid to countries that are recognized by the United States and do not support terrorism.
For more details on these requirements, see the Instructions for Form
The foreign tax credit is allowed under AMT. See line 32 of form 6251. The line has complicated instructions at:
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I am not familiar with this topic. When I did my own return, which had foreign tax on 1099-DIV less than $600, I didn't take the credit because I didn't know about the line, then next year file an amended return taking this amount, as well as did that in that year's return.
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