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Carryovers gained or lost due to

line 11 exceeds the sum of lines 1 through

back to the first preceding tax year. If, at

reorganizations of the corporation's

4 of Form 1118, Schedule B, Part II by

the time the corporation files its current

controlled/consolidated group.

$250). The amount on line 3, column (i) is

year income tax return, the actual amount

Domestic audit adjustments.

$80. The amount on line 3, column (ii) is

is not available, an estimated or tentative

Any other adjustments needed to

$60. The amount on line 3, column (iii) is

amount may be entered on line 7. If an

properly reflect the total carryover amount

$130. The amount on line 3 of all

estimated amount is entered on line 7 and

from the prior tax year that is available for

subsequent columns is irrelevant for

this amount differs from the actual

credit in the current tax year.

purposes of this example. Corporation A

carryback amount, the difference will be

enters $80 on line 4, column (i); $60 on

entered on line 2a of the subsequent year

Note. Be sure to enter a brief description

line 4, column (ii), $110 on line 4, column

Schedule K (Form 1118).

of each applicable adjustment item

(iii), the $250 subtotal on the line 4,

immediately after the lower case letter in

Note. In order to carry back amounts to

column (vii), the $250 subtotal on line 4,

the first column of the schedule.

the first preceding tax year, that first

column (viii), and the $250 total on line 4,

preceding tax year must be an excess

column (xiv).

Line 3. Adjusted foreign tax carryover

limitation year (as defined on page 1).

from prior tax year. Combine lines 1

The line 4, column (xiv) total

and 2. The total amount in line 3, column

cannot exceed the amount of the

Note. When this line 7 carryback amount

(xiv) is the adjusted carryover amount

current year excess limitation.

is subtracted from line 6, the difference is

CAUTION

from the prior tax year. It is included on

the amount of the foreign tax carryover

Schedule B, Part II, line 5 (and, if filing an

Line 5. Foreign tax carryover expired

generated in the current tax year which will

amended return, combined with

unused in current tax year. Line 5 is

be carried forward to the subsequent tax

carrybacks into the current tax year) to

completed only with respect to the 10

year.

determine the total amount of foreign

preceding tax year (and the “Subtotal” and

taxes that are available for credit in the

Line 1 Reconciliation

“Totals” columns). For the 10

preceding

current tax year.

tax year (column (i)), combine lines 3 and

Worksheet

4 and enter the result on line 5, column (i).

Line 4. Foreign tax carryover utilized in

If the corporation is amending its 2009

current tax year. With respect to a given

Line 6. Foreign tax carryover gener

foreign tax credit within the 10-year period

separate limitation, line 4 is completed

ated in current tax year. With respect to

described in section 6511(d)(3) (or section

only if the corporation has a current year

a given separate limitation, line 6 is

6511(c) if the period is extended by

excess limitation (defined above).

completed only if the corporation has

agreement), use the worksheet on page 3

current year excess foreign taxes (defined

Enter in each column the foreign tax

to compute the amounts to be entered on

on page 1). Enter in column (xiii) (the

carryover utilized in the current tax year.

line 1 of the corporation's Schedule K.

current tax year column) the amount of the

Starting with column (i), the amount to be

corporation's unused foreign tax for the

Lines 2 through 5. Use the instructions

entered on line 4 of a given column will be

for lines 4 through 7 of the Schedule K

current tax year (i.e., the amount by which

the amount on line 3 of that column, but

above to complete lines 2 through 5,

the sum of lines 1 through 4 of Form 1118,

only to the extent that it does not exceed:

respectively, of the Line 1 Reconciliation

Schedule B, Part II, exceeds the amount

The amount of the current year excess

Worksheet.

on Form 1118, Schedule B, Part II,

limitation (defined above), less

line 11). Also enter the same amount in

The sum of all amounts entered in all

Additional Information

the “Totals” column (column (xiv)).

previous columns of line 4.

For more information, see section 904(c)

Line 7. Actual or estimated amount of

Example. For the current tax year,

and Regulations section 1.904-2 and

line 6 carried back to the prior tax

Corporation A has an excess limitation of

Temporary Regulations section 1.904-2T.

$250 (i.e., Form 1118, Schedule B, Part II,

year. Enter the amount of line 6 carried

Instructions For Schedule K (Form 1118) - Foreign Tax Carryover Reconciliation Schedule Page 2

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