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Prepare Form 1116 with Form 2555

You'll need to report the amount of child and dependent care expenses paid to each care provider.
  1. Go to the
    1116
     screen and complete the
    General Information
     section.
  2. Enter the foreign activity form and unit number.
  3. Enter
    T
     or
    S
     in the
    T, S, J
     field.  This connects the 1116 screen with the correct taxpayer or spouse Form 2555.
  4. If the form includes capital gains or losses from foreign sources, enter the foreign gross income.
  5. Enter any information about taxes paid or accrued, carryovers, adjustments, and boycott operations.
Gross income calculates from the following:
  • Sources within the country:
     This doesn't include any earned income excluded on Form 2555.
  • Expenses definitely related to the gross income from sources within the country:
     This amount calculates net of any amount distributed to any foreign-earned income excluded on Form 2555.
  • Gross foreign source income:
     This includes any foreign-earned income excluded on Form 2555 without deductions.
  • Reduction in foreign taxes for activities whose form / schedule and unit number are in the 1116 screen:
     The taxes paid or accrued are reduced by the taxes allocated to foreign earned income excluded on Form 2555.
The Form 1116 Foreign Tax Credit Worksheet reports how the amounts calculate. Submit this with the return. To override any of the calculated amounts, enter the information in the 1116 screen.

This article applies to:

  • Product: UltraTax CS
  • Return type: 1040 Individual
  • Subject: Credits
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