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Topic: Form 1116 apportioning tax between passive and general income  (Read 263 times)

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Hey I have passive income (rent and dividends) and general income (consulting services) in the UK. I pay my UK income tax. In the US I have to do two Form 1116’s for each sort of income to claim the full tax credit, but how do I apportion uk taxes paid between the two forms? Pro rata the total UK tax bill?

And anyone know how a UK tax refund should be reported in the US?

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Re: Form 1116 apportioning tax between passive and general income
« Reply #1 on: April 28, 2019, 04:11:25 PM »
If the UK tax rate is the same on both the passive income and the general limitation income, then allocating the UK taxes pro rata based on the net income from each makes sense.  On the other hand, if the UK tax rate differs for the two categories of income, you should determine the amount of the UK tax attributable to each type of income.

Assuming you have never elected to claim foreign tax credits on the accrual basis, a refund of UK tax for a prior year requires you to amend the prior year tax return and adjust the foreign tax credits claimed.  This is called a tax redetermination.  For more, see https://www.irs.gov/publications/p514#en_US_2017_publink1000224389

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