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Form 1118, Foreign Tax Credit - Corporations

Complete an International transfer

Once you finish creating adjusting entries, marking them for international transfer, mapping the income inclusion items to the adjustment accounts on the Transfer Mapping Chart, and modifying binder properties, you can then begin the international transfer process.
The transfer occurs when you compute the binder in the Tax Accounting System if in Compute, you have the Transfer International option selected.
International transfer populates:
  • adjustment entries with the income inclusion amounts
  • allocates the amounts on the Sourcing Workpaper
  • populates the Country Detail
  • transfers Deemed Paid Credit amounts to the Foreign Income Taxes screen for reporting on Form 1118, Schedule B

Run a TAS compute international transfer

  1. In TAS, select
    Compute
    .
  2. Select
    Transfer International
    .
  3. Lastly, select
    Save Settings
     and
    Compute
    .

Review adjustment amounts

The system pulls the income inclusion amounts from the selected Top Consolidation binder's international results to populate the adjustment entries in
TAS
,
Adjustments
,
Tax Adjustments
.

Review the Income Sourcing Workpaper

The transferred amounts carry to the Income Sourcing Workpaper and the amounts are appropriately allocated to the source codes in
TAS
,
Foreign Tax Credit
,
IncomeSourcing
.
When you run a TAS compute with Transfer International, the system overwrites the transferred tax adjustments, allocation, and country code amounts each time. Therefore, the federal account numbers you use in the transfer shouldn't have preliminary balances or be used in any other entries. They should also have a 1-to-1 mapping correspondence to accounts in the International Summary Chart and used only for the income inclusion transfer.

Review Country Detail

The income inclusion amounts are allocated to the appropriate Country(s). Review the amounts in the
Sourcing Chart
,
Source Code Description
.

Review foreign income taxes

You can transfer deemed paid credits from lower tier foreign entities to the FTC parent's
Foreign Income Taxes
 screen to use on Form 1118, Schedule B. These amounts can be found in the FTC binder, in
TAS
,
Foreign Tax Credit
,
Foreign Income Taxes
. Select the
Source Code
 and review the
Deemed Paid Taxes
 column.

This article applies to:

  • Product: ONESOURCE International Tax
  • Return type: 1120 Corporation
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