2015 Instructions For Form 1116 printable pdf download

2015

Department of the Treasury

Internal Revenue Service

Instructions for Form 1116

Foreign Tax Credit

(Individual, Estate, or Trust)

Schedule K-1 (Form 1120S), or similar

Section references are to the Internal Revenue

You paid or accrued certain foreign

Code unless otherwise noted.

substitute statements.

taxes to a foreign country or U.S.

Your total creditable foreign taxes are

possession.

Future Developments

not more than $300 ($600 if married

See

Foreign Taxes Eligible for a

filing a joint return).

Credit, later, to determine if the taxes

For the latest information about

you paid or accrued qualify for the

developments related to Form 1116 and

This election is not available to

credit.

its instructions, such as legislation

estates or trusts.

Do not use Form 1116 to figure a

enacted after they were published, go to

credit for taxes paid to the U.S. Virgin

If you make this election:

Islands. Instead, use Form 8689,

You cannot carry over to or from any

Allocation of Individual Income Tax to

General Instructions

other year any foreign taxes paid or

the U.S. Virgin Islands.

accrued in a tax year to which the

Text below is an excerpt from page 2, column

Election To Claim the

election applies (but carryovers to and

Nonresident aliens. If you are a

1 of instructions for IRS FORM 1116, 2015.

from other years are unaffected). See

nonresident alien, you generally cannot

Foreign Tax Credit Without

the instructions for

line

10, later.

take the credit. However, you may be

Filing Form 1116

You are still required to take into

Foreign Taxes Not Eligible for a

able to take the credit if:

account the general rules for

You were a resident of Puerto Rico

You may be able to claim the foreign tax

Credit

determining whether a tax is creditable.

during your entire tax year, or

credit without filing Form 1116. By

See

Foreign Taxes Eligible for a Credit

making this election, the foreign tax

You pay or accrue tax to a foreign

and

Foreign Taxes Not Eligible for a

credit limitation (lines 15 through 21 of

country or U.S. possession on income

You cannot take a credit for the following

Credit, later.

the form) will not apply to you. This

from foreign sources that is effectively

foreign taxes.

You are still required to reduce the

election is available only if you meet all

connected with a trade or business in

taxes available for credit by any amount

of the following conditions.

the United States. But if you must pay

you would have entered on line 12 of

tax to a foreign country or U.S.

Taxes paid to a foreign country that you

All of your foreign source gross

Form 1116. See the instructions for

possession on income from U.S.

do not legally owe, including amounts

income was “passive category income”

line

12, later.

sources only because you are a citizen

eligible for refund by the foreign country.

(which includes most interest and

or a resident of that country or U.S.

To make the election, just enter on

dividends). See

Passive Category

possession, do not use that tax in

If you do not exercise your available

the foreign tax credit line of your tax

Income, later. However, for this

figuring the amount of your credit.

remedies to reduce the amount of foreign

return (for example, Form 1040, line 48)

purpose, passive income also includes

See section 906 for more information

the smaller of (a) your total foreign tax or

(a) income subject to the special rule for

tax to what you legally owe, a credit for

on the foreign tax credit allowed to a

(b) your regular tax (for example, the

high-taxed income

described later, and

the excess amount is not allowed.

nonresident alien individual.

total of lines 44 and 46 on Form 1040).

(b) certain export financing interest.

All the income and any foreign taxes

Credit or Deduction

Purpose of Form

Example . Country X withholds $25 of tax from

paid on it were reported to you on a

Instead of claiming a credit for eligible

qualified payee statement. Qualified

a payment made to you. Under the income

Who should file. File Form 1116 to

foreign taxes, you can choose to deduct

payee statements include Form

claim the foreign tax credit if the

foreign income taxes. Form 1040 filers

tax treaty between the United States and

1099-DIV, Form 1099-INT,

election, earlier, does not apply and:

choosing to do so would deduct foreign

Schedule K-1 (Form 1041),

Country X, you owe only $15 and can claim

You are an individual, estate, or trust;

income taxes on Schedule A (Form

Schedule K-1 (Form 1065),

a refund from Country X for the other $10.

and

1040), Itemized Deductions. Generally,

Schedule K-1 (Form 1065-B),

if you take the credit for any eligible

Only $15 is eligible for the foreign tax credit

foreign taxes, you cannot take any part

Tax Help

(whether or not you apply for a refund).

of that year's foreign taxes as a

deduction. However, even if you take

For more information about, or assistance with, figuring the foreign tax credit, the following IRS

the credit for eligible foreign taxes for

resources are available.

the year, you can take a deduction for:

IRS Contacts

•

Call 267-941-1000 (overseas) (not toll free).

Foreign taxes not allowed as a credit

•

Write to Internal Revenue Service, International Accounts,

because of boycott provisions.

Philadelphia, PA 19255-0725.

Taxes paid to certain foreign

Publications

•

Pub. 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.

countries for which a credit has been

•

Pub. 514, Foreign Tax Credit for Individuals.

denied, as described in item (2) under

•

Pub. 519, U.S. Tax Guide for Aliens.

Foreign Taxes Not Eligible for a

Credit,

•

Pub. 570, Tax Guide for Individuals With Income From U.S.

later.

Possessions.

Taxes on income or gain that are not

•

Pub. 575, Pension and Annuity Income.

creditable because you do not meet the

Dec 29, 2015

Cat. No. 11441F

2015 Instructions For Form 1116

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