vijoshi
Apr 6, 2008, 12:47 PM
Hello I am having trouble filling out form 1116.
For Jan 07 through Dec 2007 I have US income. During the same year for Jan 2007 through March 2007 - I have paid taxes ($1634) in India on the income earned in the US for these 3 months (Gross Income $17495) . US taxes were also deducted atr source in the US.
Also, I had no Indian income for the above 3 months. When filling 1116, if the "Gross Income in foreign country" is ZERO (which is true in my case) - and if I mention $1634 as foreign taxes paid - it shows that I am eligible for a foreign tax credit of $1634.
But for LINE 16, if the value for net foreign source taxable income is ZERO, it says that I cannot have a foreign tax credit.
So how do I claim the credit if my FOREIGN SOURCE INCOME was ZERO, but foreign taxes were paid? Please advise... does FORM 1116 needs to be filled out differently?
vijay
For Jan 07 through Dec 2007 I have US income. During the same year for Jan 2007 through March 2007 - I have paid taxes ($1634) in India on the income earned in the US for these 3 months (Gross Income $17495) . US taxes were also deducted atr source in the US.
Also, I had no Indian income for the above 3 months. When filling 1116, if the "Gross Income in foreign country" is ZERO (which is true in my case) - and if I mention $1634 as foreign taxes paid - it shows that I am eligible for a foreign tax credit of $1634.
But for LINE 16, if the value for net foreign source taxable income is ZERO, it says that I cannot have a foreign tax credit.
So how do I claim the credit if my FOREIGN SOURCE INCOME was ZERO, but foreign taxes were paid? Please advise... does FORM 1116 needs to be filled out differently?
vijay