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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7152
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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I am filing a schedule 1116 for passive income from a

Customer Question

I am filing a schedule 1116 for passive income from a European country (qualified stock dividends). I own a small business,( Schedule C filer). For the line on form 1116, what do I use for the Gross income- the Schedule C gross receipts, or the actual personal
JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?
Customer: gross after expenses for the business have been deducted
Submitted: 11 months ago.
Category: Tax
Expert:  Stephen G. replied 11 months ago.

Hello, my name is***** goal is to give you a complete & accurate answer. I am working on your request now & I will respond as soon as possible.

Expert:  Stephen G. replied 11 months ago.

You use the "net income" on Schedule C included in your overall Gross Income for the 1116.

It's the net income on your Schedule C that enters into your Gross Income.

Steve G.

Expert:  Stephen G. replied 11 months ago.

Do you have any follow-up questions?

If not, please remember to rate my response as that is the only way I will receive credit for assisting you today.

Thanks very much,

Steve G.

Customer: replied 11 months ago.
I need to further clarify. My C schedule business is in the USA only. The qualified dividends are for stocks in Europe. Does that change your answer?
Expert:  Stephen G. replied 11 months ago.

Not at all.

Those of us that have dividends from foreign securities subject to US Income Tax, eligible for the Foreign Tax Credit because of dividend income tax withholding by the foreign company, have substantially all of our income from US sources.

In the case of a Schedule C, if that income was subject to foreign income tax withholding, or foreign income tax, then that portion of your Schedule C income would also be eligible for the foreign tax credit.

Steve G.