2018 UltraTax CS
Question
Why is Form 1116 not prepared even though information is entered on Screen 1116?
Answer
If 100 percent of the current-year foreign tax credit is allocated to the beneficiaries (on a simple trust, on a final return, through data entry on Screen Allocate in the Allocation folder, or in View > Beneficiary Information > Federal tab), Form 1116 is not prepared. Only fiduciary amounts are reported on Form 1116. All current-year foreign income and tax are reported on the beneficiary’s Schedule K-1.
To prepare Form 1116 for a simple trust and retain the credit at the trust level, mark the Final return or simple trust: Allocate credits, estate taxes, or state withholding between trust and beneficiaries checkbox on Screen Allocate in the Allocation folder.
Note: If Form 1116 still does not complete, verify that there is no credit percentage entered for foreign tax credit in View > Beneficiary Information > Federal tab.
Related topic: 1041-US: Form 1116 FAQs