1040-US: Force fields for foreign income

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Question

I see force fields in Screen 2555-2 for wages, business income, and partnership income. How can I get these amounts to calculate automatically?

Answer

Use the Form 2555 allocation code field to classify income and deductions as foreign earned and eligible to report on Form 2555 and/or Form 1116. The following screens contain Form 2555 allocation fields: FEC, 1099M, W2, C, F, K1, 2106, and 3903. Enter the code that represents the appropriate allocation or use the fieldview to make the selection.

The following foreign earned income allocation codes are available.

Code Result
1 100% foreign during assignment
2 100% U.S. during assignment
3 U.S. and foreign days worked during assignment
4 U.S. and foreign days worked before / after assignment
5 Days worked before, during and after assignment

The tax application uses this field to allocate the income between U.S. and foreign earned income. Income calculated as foreign earned during the assignment is used to calculate the Form 2555 exclusion. Foreign income earned before, during, and after the foreign assignment is reported, less any applicable exclusion, by Form 1116 as eligible for the foreign tax credit. Form 2555 Allocation Worksheet reports the allocation between U.S. and foreign earned income. UltraTax CS uses the activities allocation code to allocate any related self-employment items.

Related topic: Foreign tax credits and earned income FAQs (1040)

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