1040-US: Calculation of Form 1116, line 3e

Alerts and notices

Question

How does the tax application calculate gross income from all sources reported on Form 1116, line 3e?

Answer

Gross income is all income received in the form of money, property, and services that is not exempt from tax. It is the total income received before allowable deductions. For a business, gross income is total receipts minus cost of goods sold.

A not required statement prints that details how the gross income for Form 1116, line 3e, is calculated. The following is included as gross income.

  • Wages, salaries, tips, etc.
  • Taxable interest
  • Dividends
  • Taxable refunds of state and local taxes
  • Alimony received
  • Gross business income from Schedule C, line 7
  • Capital gains from Schedule D. Only gains are included. Losses are not netted against gains.
  • Capital gain distributions reported on Schedule D
  • Gains on sale of business property from Form 4797. Only gains are included. Losses are not netted against gains.
  • Taxable IRA distributions, pensions, annuities, and Social Security benefits
  • Gross rental income from Schedule E
  • Gross royalty income from Schedule E
  • Taxable net income from an estate or trust (Schedule E, line 37)
  • Income from a REMIC reported on Schedule E, line 38
  • Gross farm rental income from Form 4835, line 7
  • Farm income from Schedule F, line 9
  • Distributive share of gross income from a partnership
  • Pro rata share of gross income from an S Corporation
  • Unemployment compensation
  • Other income reported on Form 1040 that is not reported with any of the items listed above
  • Total gain on sale of home even if part or all of the gain can be excluded or postponed
  • Foreign earned income excluded on Form 2555 or Form 2555-EZ

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