Lacerte Form 1116 - Why it picked up US sourced capital distribution?

[ellie036]

Hello everyone,

My client has foreign dividend of $1,867 and capital distribution of $75,701 from US source.

Why would Lacerte picked up the US source $75,701 to calculate the Net Foreign Source Capital Gain Distributions?

Please advise!

Thanks!

[itonewbie · Accepted solution]

The most likely culprit is Screen 12.

Check your entries under the Foreign Tax Credit section and make sure you have entered -1 for the line "Precentage foreign (.xxxx) or amount if different - Capital Gain Distributions".

If you have input for the other lines (i.e. Total Ordinary Dividends and Qualified Dividends), Lacerte (and ProConnect Tax for that matter) tends to treat a blank as 100% and the way to avoid that is to enter the all-powerful and magical -1.

If you already have -1 for CGD but yet that isn't fixed, check Screen 35.1.  Under the Gross Income Within Country section, make sure you have the correct adjustments and/or overrides for CGD.

[ellie036]

Thank you so much, itonewbie! 

It solved the problem! 

[itonewbie]

NP, @ellie036. Have a great day!