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Level 3
December 7, 2019
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Could I claim foreign tax credit paid on foreign rents? if so, should I enter as expenses, depreciation expenses on Form 1116 ?

  • December 7, 2019
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Best answer by itonewbie

Yes, you can.  It's in the passive basket but subject to high tax kick-out.  Rental expenses are directly allocable for FTC purposes.  But very often, you would end up with a loss and not having any limitation to claim the credit on because of SLL/OFL.

1 reply

itonewbie
itonewbieAnswer
Level 15
December 7, 2019

Yes, you can.  It's in the passive basket but subject to high tax kick-out.  Rental expenses are directly allocable for FTC purposes.  But very often, you would end up with a loss and not having any limitation to claim the credit on because of SLL/OFL.

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itonewbie
Level 15
December 7, 2019
If you don't like the answer, you are probably doing it wrong and should read up on the topics highlighted in the response.
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