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On schedule A of the 1040, on what line would you deduct a…

On schedule A of the...
On schedule A of the 1040 , on what line would you deduct a foreign tax credit carryover from 2016?
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Answered in 4 minutes by:
3/12/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,137
Experience: Taxes, Immigration, Labor Relations
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Foreign tax credit is NOT reported on schedule A...

That foreign tax credit carryover from prior years is reported on form 1116 - Part III line 10

https://www.irs.gov/pub/irs-pdf/f1116.pdf

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Customer reply replied 4 months ago
Maybe I didnt phrase my question properly.
If I have a foreign tax credit carryover from a preceding year, couldn't I take a deduction for it on schedule A?
If yes, on what line would that go on?

That is correct - if you selected to use a foreign tax credit on your 2016 tax return - that is your choice.

You may not use a part of foreign taxed for the credit or another part for deduction.

If you want to choose deduction - that choice should be made on your 2016 tax return .

If you want to make such choice - you should NOT use form 1116 with your 2016 tax return.

In this case - you claim a deduction for foreign tax credit on 2016 schedule A line 8.

However if on your 2016 tax return you elected to claim a foreign tax credit - you may NOT deduct these foreign taxes neither on 2016 nor on any other tax return.

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Customer reply replied 4 months ago
are you saying the following:
A)If the foreign tax carryover credit is from a preceding year lets say 2014 and you never used any portion of the credit in any years 2014 thru 2016, you could take a deduction in 2017 on schedule A line 8.
B) If in 2016. you applied some of the credit from the 2014 carryover, you can never take a deduction for it on schedule A and have to carry it forward as a credit to be used at a later date
Customer reply replied 4 months ago
i want to make sure I understand this.

A)If the foreign tax carryover credit is from a preceding year lets say 2014 and you never used any portion of the credit in any years 2014 thru 2016, you could take a deduction in 2017 on schedule A line 8.

That is NOT correct interpretation.

If on your 2014 tax return you make a choice to claim a foreign tax credit and not to claim deduction for foreign taxes - you will NOT be able to claim a deduction for these taxes - regardless if you will or will not use a part of that amount.

On your 2017 tax return - you will be able to make a separate choice - but only for foreign taxes paid or accrued in 2017.

.
B) If in 2016. you applied some of the credit from the 2014 carryover, you can never take a deduction for it on schedule A and have to carry it forward as a credit to be used at a later date

Unused foreign tax credit is carried forward up to 10 years.

After ten years - unused portion is forfeited.

NO deduction is allowed for unused foreign tax credit.

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Customer reply replied 4 months ago
WOW!
How do you suggest one take advantage of a foreign tax credit carryover ? What can one do?
Please suggest

It may be used ONLY if you have foreign sourced income in following ten years.

If you will not have foreign sourced income - the unused portion is forfeited.

Lev
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