cpa how may taxes paid by an individual to a foreign country be treated course hero

by Jacinto Wisoky 8 min read

Should I take foreign income tax credits?

Question 6 10 points How may taxes paid by an individual to a foreign country be from ACCT 323 6381 at University of Maryland, University College

How is foreign tax imposed on the combined income?

The requirement is to determine how taxes paid by an individual to a foreign country may be treated. Foreign income taxes paid by an individual may be deducted as an itemized deduction (not subject to the 2% floor), or may be subtracted as a credit against federal income taxes due. A is incorrect because foreign taxes can be deducted as an itemized deduction, but would not be …

Can I deduct foreign taxes on my taxes?

The following information about geographic areas is also reported if feasible: 1) External revenues attributed to the home country and to all foreign countries, 2) Material external revenues attributed to an individual foreign country, 3) The basis for attributing revenues from external customers, and 4) Certain information about assets.

What is a foreign country on a tax return?

Sep 10, 2010 · Question 9 10 10 pts TCO E CPA 06884 Sams year 2 taxable income was 175000 with from ACCOUNTING ACCT-592-1 at DeVry University, Keller Graduate School of Management

What form do I file to claim a foreign tax credit?

File Form 1116, Foreign Tax Credit, to claim the foreign tax credit if you are an individual, estate or trust, and you paid or accrued certain foreign taxes to a foreign country or U.S. possession. Corporations file Form 1118, Foreign Tax Credit—Corporations, to claim a foreign tax credit.

What form do I need to file if I have a foreign tax redetermination?

If a foreign tax redetermination occurs, a redetermination of your U.S. tax liability is required in most situations. You must file a Form 1040-X or Form 1120-X. Failure to notify the IRS of a foreign tax redetermination can result in a failure to notify penalty.

How long do you have to file a tax return?

Generally individual taxpayers have ten (10) years to file a claim for refund of U.S. income taxes paid if they find they paid or accrued more creditable foreign taxes than what they previously claimed.

Can you claim foreign tax credit?

You can claim a credit only for foreign taxes that are imposed on you by a foreign country or U.S. possession. Generally, only income, war profits and excess profits taxes qualify for the credit. See Foreign Taxes that Qualify For The Foreign Tax Credit for more information.

Can I take foreign income tax as a deduction?

Taken as a deduction, foreign income taxes reduce your U.S. taxable income. Deduct foreign taxes on Schedule A (Form 1040), Itemized Deductions. Taken as a credit, foreign income taxes reduce your U.S. tax liability. In most cases, it is to your advantage to take foreign income taxes as a tax credit. If you elect to exclude either foreign earned ...

Is foreign tax credit complex?

The foreign tax credit laws are complex. Refer to Foreign Tax Credit Compliance Tips for help in understanding some of the more complex areas of the law. Below are some of the compliance issues:

Can you take a credit for foreign taxes?

If you paid or accrued foreign taxes to a foreign country or U.S. possession and are subject to U.S. tax on the same income, you may be able to take either a credit or an itemized deduction for those taxes.

Qualifying Foreign Taxes

  • You can claim a credit only for foreign taxes that are imposed on you by a foreign country or U.S. possession. Generally, only income, war profits and excess profits taxes qualify for the credit. See Foreign Taxes that Qualify For The Foreign Tax Creditfor more information. Taken as a deduction, foreign income taxes reduce your U.S. taxable income. Deduct foreign taxes on Sche…
See more on irs.gov

How to Claim The Foreign Tax Credit

  • File Form 1116, Foreign Tax Credit, to claim the foreign tax credit if you are an individual, estate or trust, and you paid or accrued certain foreign taxes to a foreign country or U.S. possession. Corporations file Form 1118, Foreign Tax Credit—Corporations, to claim a foreign tax credit.
See more on irs.gov

Compliance Issues

  • The foreign tax credit laws are complex. Refer to Foreign Tax Credit Compliance Tipsfor help in understanding some of the more complex areas of the law. Below are some of the compliance issues: 1. Foreign sourced qualified dividends and/or capital gains (including long-term capital gains, collectible gains, unrecaptured section 1250 gains, and section 1231 gains) that are taxe…
See more on irs.gov

References/Related Topics