I have a 30% interest in an escrow account that was set up for environmental remediation on a building. I used to own 30% of the building and the escrow account was part of the sale agreement.
If the account earns more on investments than it spends on remediation I have to pay income taxes on 30% of the profit. After remediation is complete I get 30% of what remains.
This year it showed a loss, but had $300 in foreign taxes; so I should get a $90 foreign tax credit. (I have no other foreign taxes on my own). Had it shown a profit I would have included the dividends and shown the $90 foreign tax, but since it didn't, I can't.
Do I have to file a 1116? (I hate 1116, which is why I have no foreign taxes...)
- posted 4 years ago