# Form 1116 Line 10



## angin (10 mo ago)

Good morning...I,m new here, hope you can help me out with the following..
I,m a dual national Spain-U.S. Retired living in Spain for the last 6 years. I,ve been filing Spanish and U.S returns.
For my U.S return I,ve been using Form1116 FTC. I,ve accumulated 6 years of tax carryforwards and haven,t used any yet as my spanish cpa deducts what I pay to the irs, 300 to 350$ annually from my spanish taxes.
My question is....Can I, starting 2021, continue filing form1116 but leaving line 10 blank, 0, and forget about tax carryforwads, supporting schedules etc?
I get Social security from Spain and U.S...approx..25000$
Thank you
AG


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## Moulard (Feb 3, 2017)

The only time you can actually use the carryover is if you have income that is taxable in the US but not taxable in its source.

If that does not happen it just gets carried over until it expires after 10 years.

If you are using Form 1116 you need to maintain the carryover spreadsheet.. that cover the past 10 years..


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## angin (10 mo ago)

Thanks so much.....so far i always used the Supporting Schedule showing all carryovers but for 2021 they introduced a Schedule B reconciliation worksheet ,which is, at least for me, very complicated. Do you think if I enclose to my return, as usual, the Supporting Schedule with carryovers from 2016 to 2020 would be ok?....2006-2016 expired.unused...Thanks for your help.


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## Moulard (Feb 3, 2017)

Hmm.. I will have to investigate.. truth to tell I am a bit behind this year and haven't started my return this year. Normally because the Australian tax year runs July-June, I am basically ready to submit on 1 Jan and have to wait... but like for so many this has not been a normal year.

Opening the instructions for Form 1116 while I type...

I can see a new schedule B and a very quick glance at the schedule itself suggests to me that fundamentally, its just a soupped up version of the standard supporting schedule just turned on its side to run across the page not down the page.

You may well be able to cut and paste a fair bit from the old format into the new. But there may be fields in the reconcillation which you would have to dig out of past returns.. I just haven't had long enough to deep dive.

So as a starting point, I would suggest digging out your old carryover worksheet and cut and paste into the new schedule B

You may need to carefully parse the instructions for the new schedule to work it out.. but I cannot imagine they are asking for any new information -- just standardizing the way it is collected..

This is a five minute assessment without the benefit of my morning coffee..

oh.. and I am sorry.. I may be personally responsible for this.. making the carryover attachment a standard form was one of the many suggestions I made to the taxpayer advocate when they were writing a report to the IRS on issues for overseas filers -- I focused on the blockers to e-filing.. and the lack of a standard form to capture carryover was one of them (no attachments on Free Fillable Forms are allowed)


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## angin (10 mo ago)

Thank you so much


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## Moulard (Feb 3, 2017)

I understand your pain and anguish and am trying to grapple my head around it all now.. (I need a glass of wine)

In essence, it appears as if the new Form 1116 schedule B is just a summary of the last 10 years of Form 1116 that you have filed

But the way they have done it is probably the most convoluted way possible.

I mean if they just rotated the table so that years went down the page they could have made it so much simpler to understand and follow...

I think you will find that apart from the grief of going through and digging out the last 10 years of returns it will mostly be a cut and paste exercise

which is it itself a convoluted way to say that I think my assessment above is on the money..

I need to dig into it properly over the weekend, if my opinion changes I will post my thoughts then.


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## angin (10 mo ago)

please clarify.......Irs instructions for the worksheet says....enter the applicable amount from page III line 10....
what would be the applicable amount?
Example...foreign tax 3000....Utilized 750....carryover 2250.......would 2250 be the appliable amount? 
Thanks and sorry for the questions


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## Moulard (Feb 3, 2017)

Its part3 not page 3. It means dig out your last 10 tax returns and copy the value from Line 10 in Part 3 of your Form 1116 and add it into the worksheet. You will need to do it for any Form 1116 you submit... Passive, General and their AMT versions if you had to submit them along with any other category of FTC.

Unless you have been using your carryover or have had to carryback then I suspect that will be the end of the worksheet for you. 

That all then gets copied into the new schedule B.


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## angin (10 mo ago)

Thanks so much...please one last question (promise its the last).
Tax years 2006-2015 are expired....do I have to complet all 10 tax years...or just 2016 to 2020?
thank you again.


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## Moulard (Feb 3, 2017)

Only 2006-2010 will have expired as the the carryover is for 10 years... 

So you will need to refer to your 2011-2020 tax returns. 

If you have not kept those returns, you should be able to figure out what was on Line 10 from your detailed calculations as it is basically your carryover amount 

Which you do have to keep for 10 years in the event of a foreign tax re-determination


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## angin (10 mo ago)

sorry to breake my promise.....in tax year 2016 I had 0 in line 10....


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## Moulard (Feb 3, 2017)

So I have now spent a fair amount of time staring at the instructions and my own tax records and I think I have a handle on it.

Your example you provided above is basically correct, and my initial reading was wrong..

I had taken the new schedule as a summary of ones position at each tax year over the past 10 years not a breakdown of the current tax year into its yearly components.

So your example... is correct.



> foreign tax 3000....Utilized 750....carryover 2250.......would 2250 be the appliable amount?


You would enter 2250 into Line 1 of the reconciliation worksheet for relevant tax year.

If on any return Part III Line 10 was zero in a prior year then that means you will have consumed the prior years tax credits so you would simply enter 0 on line 1 because no portion of the tax credits carried forward into the current tax year.

So.. if Part III line 10 was 0 in 2016 for one category of FTC, then no portion of your tax credits for the current year can have had their origin prior to 2016.... so for that category of income columns i through viii would be be zero.

Hope this makes sense.


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## angin (10 mo ago)

Thank you so much..I really appreciate your help..


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