Looking for a Form 1118 Templates? Download it for free!

Instructions for Schedule K

Department of the Treasury

Internal Revenue Service

(Form 1118)

(Rev. October 2017)

preceding tax year, this carryover amount

the amount from line 8, column (iv) of the

Section references are to the Internal Revenue

Code unless otherwise noted.

will expire unused. This activity is shown

prior year Schedule K.

on line 5 of the Schedule K (Form 1118).

Future Developments

Line 2. Adjustments to line 1. Report

Furthermore, the corporation will generate

on lines 2a, 2b, 2c, 2d, etc. any

a foreign tax carryover in the current tax

adjustments resulting from events that

For the latest information about

year which can be carried back to the prior

occurred between the filing of the prior

developments related to Schedule K

tax year and/or carried forward to future

year tax return and the filing of the current

(Form 1118) and instructions, such as

tax years (see Carryback and

year tax return.

legislation enacted after they were

Carryforward of Excess Foreign Taxes in

published, go to IRS.gov/Form1118.

the instructions for Form 1118 for details).

Line 2a. Carryback adjustment.

This activity is shown on lines 6 through 8

Enter on line 2a, column (xii) the

What’s New

of the Schedule K (Form 1118).

difference between any estimated

carryback amount you may have used on

Who Must File

Line 1 of the schedule has been revised to

your prior year carryover schedule (i.e.,

instruct filers to enter the amounts from

any estimated carryback amount that you

With respect to each separate category of

the appropriate columns of line 8 of the

entered on line 7, column (xiii) of the prior

income, any corporation filing Form 1118

prior year Schedule K. The line 1

year Schedule K (Form 1118)) and the

that has a foreign tax carryover in the prior

instructions have been amended to clarify

actual carryback amount.

tax year, the current tax year, or both must

“the appropriate columns of line 8” (see

file Schedule K (Form 1118) for that

Example. In the 2017 tax year,

below).

separate category of income.

Corporation A has excess foreign taxes of

$100 (i.e., the sum of lines 1 through 4 of

The “Caution” at the top of the Line 1

Definitions

Form 1118, Schedule B, Part II exceeds

Reconciliation Worksheet on page 3 of

Form 1118, Schedule B, Part II, line 11 by

these instructions has been amended to

Excess limitation. If the corporation's

$100) entered on Schedule K (Form

clarify that the worksheet applies only in

foreign tax credit limitation (Schedule B,

1118), line 6. Corporation A enters $20 on

cases where the corporation is amending

Part II, line 11) exceeds its current year

line 7 as the estimated amount of line 6 to

its 2009 foreign tax credit within the

foreign taxes available for credit (the sum

be carried back to the 2016 tax year.

10-year period described in section

of Schedule B, Part II, lines 1 through 4),

Corporation A enters $80 on line 8 as the

6511(d)(3) (or section 6511(c) if the period

the corporation has excess limitation.

carryover amount for following years. The

is extended by agreement).

actual carryback amount to the 2016 tax

Excess foreign taxes. If the

General Instructions

year is later determined to be $15. In the

corporation's current year foreign taxes

2018 tax year, Corporation A enters $80

available for credit (the sum of

on line 1, column (xii) as the carryover

Schedule B, Part II, lines 1 through 4)

Purpose of Schedule

from the 2017 tax year, corresponding to

exceed its foreign tax credit limitation

the amount entered on line 8, column (xiii)

Schedule K (Form 1118) is used to

(Schedule B, Part II, line 11), the

of the Schedule K filed for the 2017 tax

reconcile the corporation's prior year

corporation has excess foreign taxes.

year. Because the estimated carryback

foreign tax carryover with its current year

amount of $20 from the 2017 tax year to

Specific Instructions

foreign tax carryover. Corporations are

the 2016 tax year (entered on line 7 of the

thus reporting running balances of their

Schedule K filed for the 2017 tax year)

foreign tax carryovers showing all activity

Important: All information reported on

exceeds the actual carryback of $15, on

since the filing of the prior year income tax

Schedule K (Form 1118) must be in

the Schedule K for the 2018 tax year,

return.

English. All amounts must be stated in

Corporation A enters the $5 excess ($20 -

U.S. dollars.

Lines 1 through 3. On these lines, the

$15) on line 2a as a positive number.

corporation computes its adjusted foreign

Checkboxes at top of page 1.

Assuming no other adjustments are

tax carryover from the prior tax year which

Complete Schedule K separately for each

needed, the total carryover amount from

is available for credit in the current tax

category of income. Check the box for the

2017 entered on line 3, column (xii) of the

year. The line 3 total is included on Form

category of income for which this schedule

2018 Schedule K will be $85 ($80 + $5).

1118, Schedule B, Part II, line 5.

is being completed.

Line 2b. Adjustments for section

Line 4. If the corporation has a current

Line 1. Foreign tax carryover from the

905(c) redeterminations. Enter on

year excess limitation (defined below),

prior tax year. Enter on line 1 the

line 2b any adjustments needed for

some or all of the line 3 adjusted foreign

amounts from the appropriate columns of

section 905(c) redeterminations. See

tax carryover amount will be utilized in the

line 8 of the prior year Schedule K (Form

Foreign Tax Credit Redeterminations in

current tax year. This activity is shown on

1118). For example, enter on line 1,

the instructions for Form 1118 for

line 4 of the Schedule K (Form 1118).

column (i) of the current year Schedule K

additional information.

the amount from line 8, column (ii) of the

Lines 5 through 8. If the corporation has

Lines 2c, 2d, 2e, etc. Include on

prior year Schedule K. Enter on line 1,

current year excess foreign taxes (defined

these additional lines the following types

column (ii) of the current year Schedule K

below), none of the line 3 adjusted foreign

of adjustments needed to reflect:

the amount from line 8, column (iii) of the

tax carryover amount will be utilized in the

prior year Schedule K. Enter on line 1,

current tax year. If the corporation has any

column (iii) of the current year Schedule K

remaining carryover from the 10th

Jul 11, 2017

Cat. No. 52009v

Instructions For Schedule K (Form 1118) - Foreign Tax Carryover Reconciliation Schedule

Related Articles

Related forms

Related Categories