Discussion:AMT form 1116

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Discussion Forum Index --> Consumer Questions --> AMT form 1116


Java (talk|edits) said:

4 January 2010
I am doing a tax year 08 return. Client lives in UK and pays large tax. Did form 1116 and AMT kicks in, also did form 2555. He makes over $500K is the AMT correct? Any suggestions would help.

Umk395 (talk|edits) said:

5 January 2010
Did you also do an AMT 1116? (In addition to the Regular 1116?)

Java (talk|edits) said:

5 January 2010
yes my software figures them both.

Guya (talk|edits) said:

5 January 2010
So ... have you scaled down the foreign tax, claimed bonus days under PPT if the year of move, prepared 3520s for the UK pension plan, FBARs etc?

In terms of AMT is this an MFS return?

Java (talk|edits) said:

5 January 2010
Filing status is single, not the year of move, did not prepare 3520 or fbar (not sure what fbar is)

Guya (talk|edits) said:

5 January 2010
That FBAR comment is probably the funniest thing I have heard this year (all 5 days of it).

You are handling someone in the UK but don't know about the FBAR filing rules!! Good luck - do get to take specialist advice if you are not familiar with these issues given the size of potential penalties.

Are you treaty resourcing under Article 24 following the non-dom changes from 6 April 2008, or perhaps he is paying the £30,000 remittance base charge?

Kuku (talk|edits) said:

20 February 2010
Java,

I am looking for answer to specific question ( wrt a posting you made earlier). DO you know the difference in computation for regular 1116 and AMT 1116?. The question may sound stupid but my software doesn't calculate it and asks to manually calculate it

Kevinh5 (talk|edits) said:

20 February 2010
the AMT 1116 is based on the income and deduction rules for AMT - apply them to all of the lines on 1116.

Kuku (talk|edits) said:

22 February 2010
Kevin,

Thanks for the reply.

Before any more details I tried IRS AMT tool states that no need to file 6251 ( line 36 of Form 6251 is 0). If I don't need to file 6251 do I still need to file AMT 1116? (For filing AMT 1116 I looked page 9 of 6251 instructions ( guidance for line 33 of 6251).

To elaborate further: This salary has a component in a country other than US . The tax software updates 1116 form for this foreign income ( under general income category). But not AMT 1116 and it asks to manually work on AMT 1116.

Last year I took help of a tax accountant and he filed two 1116 ( normal and AMT and no 6251 form ). In both 1116 all entroes were same till we reached line 17. (Line 17 Instructions -->Individuals: Enter the amount from Form 1040, line 41). Line 41 0f 1040= Adjusted Gross Income (AGA)- Deductions(D). From here onwards the two 1116 starts taking different values.

From last year's tax computations:

  • In Normal 1116 line 17= AGA-D.
  • In AMT 1116 line 17 : AGA.

Thus tax tax credit in normal 1116 is TC1 and tax credit in TC2. ( TC>TC2). Foreign tax credit claimed= TC1. Foreign Tax Credit Carry over amount TC1-TC2.

My Doubt

1>Is this right approach? what could be the explanation? what is the guidance on when does one need to file an AMT 1116 along with normal 1116?

Thanks And Regards,

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