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Foreign qualified dividends. You must adjust your foreign

You figured your 2011 tax using the Schedule D Tax

source qualified dividends before you include those amounts on

Worksheet in the Schedule D (Form 1040) instructions and (a)

line 1a of the MTFTCE Form 1116 if:

line 18 of that worksheet is zero, (b) line 9 of that worksheet is

Line 45 of Form 8801 is smaller than line 46, and

zero or a loss, or (c) line 35 of that worksheet is equal to or

greater than line 36.

Line 34 of Form 8801 is greater than zero.

You figured your 2011 tax using the Schedule D Tax

But you do not need to make any adjustments if:

Worksheet in the Schedule D (Form 1041) instructions and (a)

You qualified for the adjustment exception under Qualified

line 17 of that worksheet is zero, (b) line 9 of that worksheet is

Dividends and Capital Gain Tax Worksheet (Individuals),

zero or a loss, or (c) line 34 of that worksheet is equal to or

Qualified Dividends Tax Worksheet (Estates and Trusts), or

greater than line 35.

Adjustments to foreign qualified dividends under Schedule D

You were not required to make adjustments to your foreign

Filers, whichever applies, in the Form 1116 instructions when

source qualified dividends under the rules described earlier (or

you completed your regular tax Form 1116 (or you would have

you would not have been required to make those adjustments if

qualified for that adjustment exception if you had completed a

you had foreign source qualified dividends).

regular tax Form 1116) for 2011, and

Line 32 of Form 8801 is not more than $175,000 ($87,500 if

Use Worksheet B if you:

married filing separately for 2011).

Cannot use Worksheet A,

Had 2011 foreign source capital gains and losses in no more

To adjust your foreign source qualified dividends, multiply

than two separate categories,

your foreign source qualified dividends in each separate

Did not have any item of unrecaptured section 1250 gain or

category by 0.5357 (instead of 0.4286) if the foreign source

28% rate gain or loss, and

qualified dividends are taxed at a rate of 15%. If you have foreign

Did not have any capital gains taxed at a rate of 0%.

source qualified dividends that are taxed at a rate of 0%, you

Instructions for Worksheets A and B. When you complete

adjust them by not including them on line 1a of MTFTCE Form

1116. Include the results on line 1a of the applicable MTFTCE

Worksheet A or Worksheet B, do not use any foreign source

Form 1116. But do not adjust the amount of any foreign source

capital gains you elected to include on line 4g of Form 4952. Use

0.5357 instead of 0.4286 to complete lines 11, 13, and 15 of

qualified dividend you elected to include on line 4g of Form

Worksheet B and to complete lines 8, 11, and 17 of the Line 15

4952.

Worksheet for Worksheet B.

Individuals with capital gain distributions only. If you had

no 2011 capital gains or losses other than capital gain

If you do not qualify to use Worksheet A or Worksheet B, use

distributions from box 2a of Form(s) 1099-DIV or substitute

the instructions for Capital Gains and Losses in Pub. 514,

statement(s), you must adjust your foreign source capital gain

Foreign Tax Credit for Individuals, to determine the adjustments

distributions before you include those amounts on line 1a of the

you make.

MTFTCE Form 1116 if you are required to adjust your foreign

Step 4. Complete lines 9 through 14 of the MTFTCE Form

source qualified dividends under the rules just described or you

1116. For line 9, use the same amount you entered on that line

would be required to adjust your foreign source qualified

for 2011 for the regular tax. Use your MTFTCE carryover, if any,

dividends if you had any.

on line 10.

To adjust your foreign source capital gain distributions,

Step 5. If you did not figure your 2011 AMTFTC using the

multiply your foreign source capital gain distributions in each

simplified limitation election, complete lines 15 through 17 of the

separate category by 0.5357 (instead of 0.4286) if the foreign

MTFTCE Form 1116.

source capital gain distributions are taxed at a rate of 15%. If you

have foreign source capital gain distributions that are taxed at a

Step 6. If you did not complete Part III of Form 8801, enter the

rate of 0%, you adjust them by not including them on line 1a of

amount from Form 8801, line 4, on line 18 of the MTFTCE Form

MTFTCE Form 1116. Include the results on line 1a of the

1116 and go to Step 7. If you completed Part III of Form 8801,

applicable MTFTCE Form 1116. But do not adjust the amount of

you must complete, for the MTFTCE, the Worksheet for Line 18

any foreign source capital gain distribution you elected to include

in the Form 1116 instructions to determine the amount to enter

on line 4g of Form 4952.

on line 18 of the MTFTCE Form 1116 if:

Other capital gains or losses. Use Worksheet A in the

Line 45 of Form 8801 is smaller than line 46, and

instructions for the 2011 Form 1116 to determine the

Line 34 of Form 8801 is greater than zero.

adjustments you must make to your foreign source capital gains

But you do not need to complete the Worksheet for Line 18 if:

or losses if you have foreign source capital gains or losses in no

You qualified for the adjustment exception under Qualified

more than two separate categories and any of the following

Dividends and Capital Gain Tax Worksheet (Individuals),

apply.

Qualified Dividends Tax Worksheet (Estates and Trusts), or

You figured your 2011 tax using the Qualified Dividends and

Adjustments to foreign qualified dividends under Schedule D

Capital Gain Tax Worksheet in the Form 1040 instructions and

Filers, whichever applies, in the Form 1116 instructions when

(a) line 3 of that worksheet minus the amount on line 4e of Form

you completed your regular tax Form 1116 (or you would have

4952 that you elected to include on line 4g of Form 4952 is zero

qualified for that adjustment exception if you had completed a

or less, (b) line 7 of that worksheet is zero, or (c) line 17 of that

regular tax Form 1116) for 2011, and

worksheet is equal to or greater than line 18.

Line 34 of Form 8801 is not more than $175,000 ($87,500 if

You figured your 2011 tax using the Qualified Dividends and

married filing separately for 2011).

Capital Gain Tax Worksheet in the Form 1040NR instructions

If you do not need to complete the Worksheet for Line 18,

and (a) line 3 of that worksheet is zero, (b) line 5 of that

enter the amount from line 4 of Form 8801 on line 18 of the

worksheet is zero, or (c) line 15 of that worksheet is equal to or

MTFTCE Form 1116.

greater than line 16.

Instructions for MTFTCE Worksheet for Line 18. Follow

Line 15 or 16 of your 2011 Schedule D (Form 1040) (column

these steps to complete, for the MTFTCE, the Worksheet for

(2) of line 14a or 15 of Schedule D (Form 1041)) is zero or a loss.

Line 18 in the Form 1116 instructions.

You figured your 2011 tax using Schedule D (Form 1041) and

line 18 of Schedule D minus the amount on line 4e of Form 4952

1. Enter the amount from Form 8801, line 4, on line 1 of the

that you elected to include on line 4g of Form 4952 is zero or

worksheet.

less.

2. Skip lines 2 and 3 of the worksheet.

-3-

Instructions for Form 8801 (2012)

Instructions For Form 8801 - Credit For Prior Year Minimum Tax-Individuals, Estates-Trusts - 2012 Page 3

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