Foreign interest income (1040)

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If you have a 1099-INT or 1099-OID, visit Form 1099-INT Data entry and/or Form 1099-OID Data entry.

Otherwise, to enter foreign interest income to be reported on Schedule B and Form 1116:

  1. In the Income folder, open either the B&D screen or the Broker screen. Only use the Broker screen if you are entering a consolidated 1099.
  2. Open the Interest income statement and complete these fields:
    • F/S: If the interest is federal-only or state-only, code it as federal or state. If the interest should be reported on both federal and state, leave this field blank. If there are multiple states on the return, see Entering interest and dividend income for a multi-state return.
    • TSJ: Code the interest to the Taxpayer, the Spouse, or as Joint. This field does not exist if you come from the Broker screen because the entire Broker screen is coded to the Taxpayer, Spouse, or Joint and the Interest income statement automatically picks up the code from there.
    • Type Code: Leave blank.
    • Payer: Enter the payer name.
    • Interest income: Enter the total amount of taxable interest, foreign or not.
    • Foreign Amt (If different): Enter the amount of foreign source interest income. If the foreign amount is the same as the Interest income amount, you can skip this field and mark the X if Foreign . If you don't see this field, click the globe show foreign columns icon.
    • Foreign Tax Paid: Enter the amount of foreign taxes paid on foreign interest income to calculate Form 1116.
    • X if Foreign: Mark this field to indicate there is foreign interest in this line. UltraTax CS uses the Foreign Tax Paid amount and the Foreign Amt (if different) amount to calculate Form 1116. If you did not enter an amount in the Foreign Amt (if different) field, UltraTax CS uses the Interest income
    • FATCA: Enter X if the FATCA checkbox is marked in the source document. There may be additional filing requirements for Form 8938 and/or FinCEN Form 114. Review the filing instructions for more information.
  3. For fields that were skipped during these steps, fill them in as needed for your client or to get your desired result on Schedule B.
  4. Open to the Credits folder.
  5. Click the 1116 tab.
  6. Review the data entry on this screen. Some fields will fill out automatically, but some may need adjustment to get your desired result on Form 1116.

Once you complete your data entry in the Interest income statement, review the additional fields on the B&D/Broker screen related to foreign taxes and complete them as needed.

Nominee, accrued, OID, or ABP Adjustments

If you need to make an adjustment, do not manually adjust the amount in the Interest income field. Instead:

  1. Create a second line in the Interest income statement.
  2. Enter code 3, 4, 5, or 6 in the Type code field.
  3. Enter the adjustment as a positive amount in the Interest income field.

UltraTax CS calculates a subtotal for each code and reports it on Schedule B.

Form 1116

When you complete the Interest income statement as described above, portions of the 1116 screen in the Credits folder will fill out.

Fields automatically completed on the 1116 screen Where it transfers to on Form 1116
Description Passive Income from B&D
Category of Income Passive Income
Description of income for line 1a Dividends & Interest
Country code/name or Mutual fund or other regulated investment company (RIC) income Field data
Foreign gross income Total taxable interest income
Foreign long-term cap gain/loss Capital Gain/Loss Worksheets
Foreign qualified dividends Total taxable dividend income
Date paid or accrued 1099 Tax
In US dollars - taxes withheld on Interest Total foreign taxes paid

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