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Author Topic: AMT Form 1116  (Read 3778 times)
at09
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« on: February 18, 2010, 06:06:05 PM »

I am calculating our taxes using the FTC (Foreign Tax Credit), as it appears to be more favorable for us than the FEIE.

In taking the FTC, we end up owing $1200 in AMT. However, when I fill out an AMT Form 1116, we no longer owe any AMT.

Is this too good to be true? Our FTC on the regular Form 1116 is $5800, while our FTC on the AMT Form 1116 is $4800 (I am rounding off here, they're not that exact).

Can we file BOTH of these Forms 1116--ie., take BOTH the regular FTC and the AMTFTC? Or are we double-dipping in some way?

In other words: Are we supposed to use one or the other of these figures on line 47 of the Form 1040? Or is the AMTFTC figure ($4800) solely for use on Form 6251, and I can still use the regular FTC figure ($5800) on line 47?

If anyone can explain this, I would be so grateful! I thought I was making good progress, but this issue totally has me stumped.  Huh

(Also, if anyone can explain the simplified limitation election in plain English--and why someone may or may not want to take it--I would really appreciate it!)
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guya
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« Reply #1 on: February 18, 2010, 09:02:49 PM »

Yes - you file both but the AMT FTC is solely for the 6251.

Most folks use software for these forms because Congress has made them truly complex...
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at09
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« Reply #2 on: February 18, 2010, 09:32:42 PM »

*Thank you* for clearing that up, guya!

I bought the H&R Block software simply because Form 1116 is so complicated; and to my dismay, it makes you fill in many of the fields by hand! It also did NOT prompt me to fill in an AMT Form 1116, even though we owed AMT--I stumbled across that in the IRS instructions (luckily, the software supports the additional form; although, again, many of the fields must be completed by hand).  Roll Eyes
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theOAP
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« Reply #3 on: February 18, 2010, 09:34:05 PM »

Congratulations at09! You've now learned why some of us use 1116 and 1116AMT instead of 2555.

If line 13, 1116, is larger than line 20 (the limitation), you now have some credits in the bank for next year. And if current AMT legislation for 2010 remains unchanged (reduction in the AMT exemption amount), the credits in the bank are valuable, as you can use them on next years 1116AMT if needed through carryover/carryback. If not required next year, they're still good for 10 years (from 2009). The same applies for the amounts on your 1040 FTC.
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guya
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« Reply #4 on: February 18, 2010, 09:44:20 PM »

Don't forget to make sure you pay the foreign taxes in the year you want to use them and that you have the excess credits in the right basket...so general limitation for most income including high tax kickout and passive for UK dividends, non high tax kickout other investment type income and no basket at all for PFIC income...

Now I guess you have just the FBARS and the UK Return to handle?
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LeftCoasttransplant
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« Reply #5 on: April 19, 2010, 05:59:06 PM »

Not sure if the original question was ever answered fully.

I seem to have a similar situation where page 2 of 116 multiplier = 1.0 in both cases.  Lines 18-20 of Form 1116 AMT vs 1116 General Income version are exactly the same.   Perhaps no need for AMT hence 6251/1116?

Form 6251 line 33 > than line 32 hence result of subtracting it is a negative number - assume AMT then 0?

Any advice welcomed.
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theOAP
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« Reply #6 on: April 19, 2010, 07:33:55 PM »

Please read the instructions for form 6251 carefully, particularly for line 33. There are special rules for lines 17 and 19 of the 1116AMT (on page 10 of the 6251 instructions).

You may have already done this, but check the special AMT rules for lines 3a and 3b of 1116AMT.  
« Last Edit: April 19, 2010, 07:43:53 PM by theOAP » Logged
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