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Fixed Assets and UltraTax CS 2023 help is now on Help and Support. We're still moving articles, but you can find most content for the 2023 tax year there. Continue using the Help & How-To Center for tax years 2022 and older.

Question

How do foreign tax credit carryover amounts calculate?

Answer

If, because of the limit on the credit, the full amount of qualified foreign taxes paid or accrued in the tax year cannot be used, a one-year carryback and then a ten-year carryover is allowed. The carryback and carryover calculate based on entries you made in Screen 1116CO.

The alternative minimum tax (AMT) foreign tax credit calculates separately, using AMT income and deductions. Separate carryovers are calculated for the AMT foreign tax credit. Any unused AMT credit available for carryover includes the amount not taken because of the AMT credit limit.

UltraTax CS provides a Foreign Tax Credit Carryover Worksheet for each applicable foreign income category. Positive amounts from the last column of this worksheet transfer to the Foreign Tax Credit Carryover Report, which reports both regular and AMT foreign tax credit carryovers. Overrides entered on the Foreign Tax Credit Carryover Worksheet will transfer to the Foreign Tax Credit Carryover Report and will proforma to next year.

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