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Arthur Rubin
Arthur Rubin, Tax Preparer
Category: Finance
Satisfied Customers: 1515
Experience:  22 years of tax preparation experience, including individual, trust, and estate returns.
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1040, I have 3 ncome sources from Australia

Customer Question

For my 1040, I have 3 ncome sources from Australia (Interest, Dividend and Rental income) that are taxed at 45%,43% and 45% respectively. So I should be getting HTKO benefits. However, TurboTax is very confusing in this regard and I am not getting the benefits expected Basically the foreign tax credit gets capped at a low number because this is calculated based on ratios (Overall income, overall tax and overseas income). HTKO doesn't give me any benefit.
Also, the TurboTax and 1116 guidelines e.g. -ve income under HTKO don't work.
Please advise what to do.
Submitted: 11 months ago.
Category: Finance
Customer: replied 11 months ago.
(Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Customer: replied 11 months ago.
Hi, Further on this, please advise where exactly in TurboTax/ form 1116 should I enter the 3 foreign incomes and taxes. I can be reached at +1(###) ###-####anytime day or night. Regards, Pradeep
Expert:  Arthur Rubin replied 11 months ago.
Sorry to have to break the bad news, but, even for HTKO categories, your tax credit is limited to the US tax on that income. I can go over the 1116 or TurboTax entry sheets for the 1116 with you, but basically, you have two options. If your foreign tax is at most $300 ($600 if married filing jointly), you can claim it directly without using form 1116.File the 1116 has turbotax recommends. In theory, all three sources of income could be reported in one column of the 1116, as they are all HTKO passive income, but you could enter them separately in the three columns, if you so choose.
Customer: replied 11 months ago.
I solved the problem on my own. No need for any more help. Please close this question.