Foreign Tax Credit

[gman]

What is the $ amount of foreign tax creit that requires form 2555 to be filed. The penalty looks substantial. I thought there was a limit before it was required.

[gman]

Anyone

have an answer for this?

thanks

[Lion]

Form 1116

Foreign Tax Credit can be taken on Form 1116, but you can elect to deduct foreign taxes instead. $300/$600. See page 11-12. Or, are you asking about foreign INCOME?

[gman]

Is there a dollar limit before the form 1116 or any other form must be filed. I have a foreign tax credit of 200.00 Can it go directly on page 2, or must I attach another form.

[JG EA]

Tax Topic 856

You can claim the credit for qualified foreign income taxes without filing Form 1116 if all of the following requirements are met:

All of your foreign source income is passive income, such as interest and dividends,
All of your foreign source income and the foreign income taxes are reported to you on a qualified payee statement, such as Form 1099-INT (PDF) or Form 1099-DIV (PDF), and
The total of your qualified foreign taxes is not more than the limit given in the Form 1040 Instructions for the filing status you are using, or in the Form 1040-NR Instructions (if you file Form 1040-NR).

If you claim the credit directly on Form 1040 or Form 1040-NR without filing Form 1116, you cannot carryback or carryover any unused foreign income tax to or from this year.

And those figures are above provided by Lion.

[neallove]

Nl

The best thing is to follow the tax program you are using. If you still have questions contact them.