| FEDTAX * IRS
* HOME * PUB_514
How To Claim the Credit
You must file Form 1116 to claim the foreign tax credit unless you meet one of the following exceptions.
Exceptions. If you meet the requirements discussed under Exemption from foreign tax limit, earlier, and choose to be exempt from the foreign tax credit limit, do not file Form 1116. Instead, enter your foreign taxes directly on line 43 of Form 1040.
If you are a shareholder of a controlled foreign corporation and chose to be taxed at corporate rates on the amount you must include in gross income from that corporation, use Form 1118 to claim the credit. See Controlled foreign corporation shareholder under You Must Have Paid or Accrued the Tax, earlier.
You must file a Form 1116 with your U.S. income tax return, Form 1040. You must file a separate Form 1116 for each of the following categories of income for which you claim a foreign tax credit.
A Form 1116 consists of four parts as explained next.
Records To Keep
You should keep the
following records in case you are later asked to verify the taxes shown on your Form 1116
or Form 1040. You do not have to attach these records to your Form 1040.
The receipt or return you keep as proof should be either the original, a duplicate original, a duly certified or authenticated copy, or a sworn copy. If the receipt or return is in a foreign language, you also should have a certified translation of it. Revenue Ruling 67-308 in Cumulative Bulletin 1967-2 discusses in detail the requirements of the certified translation. You can buy the Cumulative Bulletin from the Government Printing Office. Copies of the Cumulative Bulletins are also available in most IRS offices and you are welcome to read them there.
Alternative Minimum Tax
In addition to your regular income tax, you may be liable for the alternative minimum tax. A foreign tax credit may be allowed in figuring this tax. See the instructions for Form 6251, Alternative Minimum Tax--Individuals, for a discussion of the alternative minimum tax foreign tax credit.