I was just preparing a return for a client with $7,387 in foreign passive income, $336 of which was high-taxed, and getting Lacerte to calculate the foreign tax credit correctly was a nightmare.

Form 1116 for passive category income is supposed to show income and deductions for each foreign country in a separate column, with high-taxed income entered as a subtraction in its own column. There is no way to do this properly in Lacerte.

If you enter the high-taxed income on a separate page in screen 35.1, the program fills out the country columns correctly, but doesn't add them together right; it adds the income together but ignores the HTKO column.

To get the credit to calculate correctly, I had to change the income category for two countries to high-taxed, but this caused those two countries to be omitted from page 1 of the 1116.

Line 1a on the finished form for passive income shows two countries with income of $7,687 and $376, plus the HTKO column showing -$384. The Total column shows $8,063, which is not the sum of those three numbers. There should be five columns, including the HTKO, with the missing $384 showing on the missing two columns.

The issue seems to be that the program doesn't properly subtract the HTKO from foreign source passive income, so I have to enter it in a roundabout way.

My question is: is Intuit working to fix this?