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Why does this suggestion for foreign tax show up when credit us given?

cakeen
Level 3

One "suggestion" I get regularly but not always is "Taxpayer received either foreign source qualified dividends and/or foreign source capital gain distributions. No adjustment was made to these amounts as the taxpayer qualified for the adjustment exception."

I get the above suggestion EVEN when the foreign credit fully comes through to line 20 on the 1040.

Any thoughts on why it appears I don't have this entered correctly?

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2 Comments 2
PhoebeRoberts
Level 11
Level 11

It's informational. It says that the normal rule that a dollar of foreign-source qualified dividends counts as less than a dollar of total foreign-source income doesn't apply to your client. It explains why the 1116 doesn't match your Excel workpaper that assumes the qualified dividend adjustment applies. This is a separate issue entirely from whether the FTC itself is limited.

Diagnostics are not necessarily suggestions, and they don't necessarily mean you've made an inappropriate entry. They might mean that if you have no idea what they're talking about, you might want to read some forms instructions.

sjrcpa
Level 15
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