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    summersky's Avatar
    summersky Posts: 4, Reputation: 1
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    #1

    Apr 1, 2007, 10:29 PM
    Form 1116, foreign tax credit: Tax paid vs tax accrued, exchange rates and dates
    Hi, I'm applying for foreign tax credit on taxes I've paid / accrued on interest earned in savings accounts and certificate deposits in New Zealand. For cds, the bank statements don't give precise dates for when taxes were withheld. And so I have several questions relating to form 1116, Part II:

    1) When filling out form 1116, should I list that the credit is claimed for taxes paid or taxes accrued?

    2) What should I fill in for the date (line A , column o)? All the taxes paid on the interest earned in 2006 are definitely paid by the end of 2006, though they are multiple small amounts throughout the year.

    3) Since I don't have access to all of the exact dates when taxes were withheld / paid, can I use the average exchange rate for 2006 as provided by the Federal Reserve Board? Form 1116 only allows the use of the average exchange rate for taxes accrued (not taxes paid), but I don't have all the dates available.

    Thanks in advance for answers to this!
    Mobea's Avatar
    Mobea Posts: 220, Reputation: 15
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    #2

    Apr 3, 2007, 01:38 PM
    You can use "Various" as date paid
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Apr 13, 2007, 11:57 AM
    1) If you have PAID the taxes in a tax return, use TAXES PAID. Otherwise, TAXES ACCRUED>

    2) Like Mobea said, use "various".

    3) Average exchange rate is fine.
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