F1116 Stmt 87

[erchess]

Return has a carryforward of Foreign Tax Credit from last year. Software wants a Statement 87. I can't think of what to say other than "There is a carryforward of Foreign Tax Credit from 2008 on this return." Since that seems rather obvious I wonder if there is more I am supposed to say. Any help would be appreciated.

[appelman]

That will probably do it.

In principle, I think you're supposed to show the calculation, but I've never bothered. I suppose if it's a really large amount they might ask for more info.

[FEDUKE404]

You might add...

...more details, especially in multi-year carryforwards (which is common).

2008 carryforward is.... and 2007 caryforward is...

Keeping track of the numbers (used/unused) and the relative pecking order of which gets used first can be extremely messy.

Quite frankly, except for mega-dollar Forms 1116, I seriously doubt if too many people in the IRS even understand the form, and especially the carryforwards, that much in the first place!

And here's hoping you don't get to do it twice due to AMT issues............

FE

[S T]

Form 1116

If it is unused carryforward FTC - my software prints out a schedule as a detail sheet and shows c/o amounts by year and what has been used or unused.

I have never had to enter additional detail

Form 1116 is not one of my favorites

Sandy

[joanmcq]

Mine has a lovely detail sheet AND wants a statement. I ususally say, "see attached worksheet"

[appelman]

I wonder

if those detail sheets are included in the e-file.

[DaveO]

I have one of these and we had to paper file the return.

[appelman]

Form 8275

Has anybody thought of using Form 8275 as a sort of general-purpose form for providing additional details in a situation like this and still allowing e-filing?

[BP.]

FTC carryover

Thanks for posting on this topic- timely for me.

New client has very large FTC carryover from wages earned abroad in prior years (2004-2006.)

In 2007 client lived in US all year and all W-2 wages are reported on local and state returns, so that says to me there were no foreign earnings in 2007. But a very large accounting firm prepared her 2007 taxes (an employee benefit) and attributed some earnings abroad on her 2007 Form 1116, and therefore used some of the FTC carryover.

I can't yet determine where they got the earnings amount to attribute to foreign income. (I'll ask client.) She did have W-2 income from an NSO exercise, so possibly they attributed that to foreign income, since the options were likely granted while she was working abroad. That seems to be the only way I can reconcile that all wages were reported on the PA local return (i.e.- all received while a resident here), yet some were reported as foreign-earned for federal purposes. The NSO exercise income and the foreign income on Form 1116 don't match up though.

Now I'm preparing her 2008 return, all earnings are from US, and client fully expects to use some of the large remaining FTC carryover and get a huge refund. My question here, before possibly bursting this client's bubble, is that I'd like to get clarification that without any foreign source income in a particular year, the FTC carryover cannot be used. Can anyone illuminate this issue for me please? Thanks!

[appelman]

You are correct.

See text on Line 16 of Form 1116.

[BP.]

See text on Line 16 of Form 1116.

Thank-you, appelman!

[FEDUKE404]

End run

So could you buy some Canadian common stock that pays a cash dividend that has a 15% Canadian foreign tax withholding at the source and then ...... ??

Although I've fought several Forms 1116, I'm not sure if that is an option, especially if the various "categories" of foreign income come into play.

FE