Foreign Tax Carryover Reconciliation (Estate or Trust)

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Instructions for Schedule B
(Form 1116)

Department of the Treasury
Internal Revenue Service

(December 2021)

Foreign Tax Carryover Reconciliation Schedule

DRAFT AS OF
November 17, 2021
Section references are to the Internal Revenue
Code unless otherwise noted.

must file Schedule B for that separate
category of income.

Future Developments

Definitions

For the latest information about
developments related to Schedule B
(Form 1116) and its instructions, such as
legislation enacted after they were
published, go to IRS.gov/Form1116.

Excess limitation. If your foreign tax
credit limitation (Form 1116, Part III,
line 23) exceeds your current year foreign
taxes available for credit (Form 1116, Part
III, line 9), you have an excess limitation.

General Instructions

Excess foreign taxes. If your current
year foreign taxes available for credit
(Form 1116, Part III, line 9) exceed your
foreign tax credit limitation (Form 1116,
Part III, line 23), you have excess foreign
taxes.

Purpose of Schedule

Schedule B (Form 1116) is used to
reconcile your prior year foreign tax
carryover with your current year foreign
tax carryover. Taxpayers are therefore
reporting running balances of their foreign
tax carryovers showing all activity since
the filing of their prior year income tax
return.
Lines 1 through 3. On these lines, you
figure your adjusted foreign tax carryover
from the prior tax year which is available
for credit in the current tax year. The total
amount on line 3, column (xiv), is included
on Form 1116, Part III, line 10.
Line 4. If you have a current year excess
limitation (defined later), some or all of the
line 3 adjusted foreign tax carryover
amount will be utilized in the current tax
year. This activity is shown on line 4 of
Schedule B.
Lines 5 through 8. If you have current
year excess foreign taxes (defined later),
none of the line 3 adjusted foreign tax
carryover amount will be utilized in the
current tax year. If you have any remaining
carryover from the 10th preceding tax
year, this carryover amount will expire
unused. This activity is shown on line 5 of
Schedule B. Furthermore, you will
generate a foreign tax carryover in the
current tax year which can be carried back
to the prior tax year and/or carried forward
to future tax years (see the line 10
instructions in the Instructions for Form
1116 for details). This activity is shown on
lines 6 through 8 of Schedule B.

Who Must File

With respect to each separate category of
income, if you are filing Form 1116 that
has a foreign tax carryover in the prior tax
year, the current tax year, or both, you

Oct 12, 2021

Specific Instructions
Important: All information reported on
Schedule B must be in English. All
amounts must be stated in U.S. dollars.
Checkboxes at top of page 1. Use a
separate Schedule B for each applicable
category of income and check the
corresponding box. Check only one box
for each completed Schedule B.
See Categories of Income in the
Instructions for Form 1116 for additional
information regarding separate categories.
For country codes on lines (h) and (i), see
IRS.gov/CountryCodes for the code to
use.
Note. Don’t complete Schedule B for
section 951A category income because
the carryover provisions of section 904(c)
don’t apply to foreign taxes assigned to
section 951A category income.
Line 1. Foreign tax carryover from the
prior tax year. Enter on line 1 the
amounts from line 6 of the Line 1
Reconciliation Worksheet at the end of the
instructions. See the instructions under
Line 1 Reconciliation Worksheet, later,
before completing the worksheet.
Line 2. Adjustments to line 1. Report
on lines 2a, 2b, 2c, 2d, etc., any
adjustments resulting from events that
occurred between the filing of your prior
year tax return and the filing of your
current year tax return.
Line 2a. Carryback adjustment.
Enter on line 2a, column (xii), the
difference between any estimated
carryback amount you may have used on
your prior year carryover schedule (that is,
Cat. No. 37626c

the equivalent of any estimated carryback
amount that you would have entered on
line 7, column (xiii), of Schedule B had that
schedule existed last year) and the actual
carryback amount.
Example. For 2021, Sam has excess
foreign taxes of $100 entered on
Schedule B, line 6, column (xiii). Sam
enters $20 on line 7 as the estimated
amount of line 6 to be carried back to
2020. He enters $80 on line 8 as the
carryover amount for following years. The
actual carryback amount to 2020 is later
determined to be $15. In 2022, Sam
enters $80 on line 1, column (xii), as the
carryover from 2021, corresponding to the
amount entered on line 8, column (xiii), of
Schedule B filed for the 2021 tax year.
Because the estimated carryback amount
of $20 from 2021 to 2020 (entered on
line 7 of Schedule B filed for 2021)
exceeds the actual carryback of $15, Sam
will enter the $5 excess ($20 − $15) on
line 2a of his 2022 Schedule B as a
positive number. Assuming no other
adjustments are needed, the total
carryover amount from 2021 entered on
line 3, column (xii), of Sam’s 2022
Schedule B will be $85 ($80 + $5).
Line 2b. Adjustments for section
905(c) redeterminations. Enter on
line 2b any adjustments needed for
section 905(c) redeterminations. See
Foreign Tax Redeterminations in the
Instructions for Form 1116 for additional
information.

Lines 2c, 2d, 2e, etc. Include on
these additional lines the following types
of adjustments needed to reflect:
• Domestic audit adjustments, and
• Any other adjustments needed to
properly reflect the total carryover amount
from the prior tax year that is available for
credit in the current tax year.
Note. Be sure to enter a brief description
of each applicable adjustment item
immediately after the lower case letter in
the first column of the schedule.
Line 3. Adjusted foreign tax carryover
from prior tax year. Combine lines 1
and 2. The total amount on line 3, column
(xiv), is the adjusted carryover amount
from the prior tax year. It is included on
Form 1116, Part III, line 10 (and, if filing an
amended return, combined with
carrybacks into the current tax year) to

determine the total amount of foreign
taxes that are available for credit in the
current tax year.
Line 4. Foreign tax carryover used in
current tax year. With respect to a given
separate limitation, line 4 is completed
only if you have a current year excess
limitation (defined earlier).
Enter in each column the foreign tax
carryover utilized in the current tax year.
Starting with column (i), the amount to be
entered on line 4 of a given column will be
the amount on line 3 of that column, but
only to the extent that it doesn’t exceed:
• The amount of the current year excess
limitation (defined earlier), less
• The sum of all amounts entered in all
previous columns of line 4.

Line 5. Foreign tax carryover expired
unused in current tax year. Line 5 is
completed only with respect to the 10th
preceding tax year (and the “Subtotal” and
“Totals” columns). For the 10th preceding
tax year (column (i)), combine lines 3 and
4 and enter the result on line 5, column (i).
Line 6. Foreign tax carryover generated in current tax year. With respect to
a given separate limitation, line 6 is
completed only if you have current year
excess foreign taxes (defined under
Definitions, earlier). Enter in column (xiii)
(the current tax year column) the amount
of your unused foreign tax for the current
tax year (that is, the amount by which
Form 1116, Part III, line 9, exceeds the
amount on Form 1116, Part III, line 23).
Also enter the same amount in the “Totals”
column (column (xiv)).

Note. In order to carry back amounts to
the first preceding tax year, that first
preceding tax year must be an excess
limitation year (as defined earlier under
Definitions).
Note. When this line 7 carryback amount
is subtracted from line 6, the difference is
the amount of the foreign tax carryover
generated in the current tax year which will
be carried forward to your subsequent tax
year.

DRAFT AS OF
November 17, 2021
Example. For the current tax year,
Bob has an excess limitation of $250. The
amount on line 3, column (i), is $80. The
amount on line 3, column (ii), is $60. The
amount on line 3, column (iii), is $130. The
amount on line 3 of all subsequent
columns is irrelevant for purposes of this
example. Bob enters $80 on line 4,
column (i); $60 on line 4, column (ii); $110
on line 4, column (iii); the $250 subtotal on
line 4, column (vii); the $250 subtotal on
line 4, column (viii); and the $250 total on
line 4, column (xiv).

!

CAUTION

The line 4, column (xiv), total can’t
exceed the amount of the current
year excess limitation.

Line 7. Actual or estimated amount of
line 6 to be carried back to the prior
tax year. Enter the amount of line 6
carried back to the first preceding tax year.
If, at the time you file your current year
income tax return, the actual amount isn’t
available, an estimated or tentative
amount may be entered on line 7. If an
estimated amount is entered on line 7 and
this amount differs from the actual
carryback amount, the difference will be
entered on line 2a of your subsequent
year Schedule B.

-2-

Line 1 Reconciliation
Worksheet

Use the worksheet at the end of the
instructions to figure the amounts to be
entered on line 1 of your Schedule B.

Lines 2 through 5. Use the instructions
for lines 4 through 7 of Schedule B earlier
to complete lines 2 through 5,
respectively, of the Line 1 Reconciliation
Worksheet.

Additional Information

For more information, see section 904(c),
Regulations section 1.904-2, and
Temporary Regulations section 1.904-2T.

Instructions for Schedule B (Form 1116) (12-2021)

Instructions for Schedule B (Form 1116) (12-2021)

-3-

Foreign tax carryover used in
your tax year beginning in
2020 (enter as a negative
number).

Foreign tax carryover expired
unused in your tax year
beginning in 2020 (enter as a
negative number).

Foreign tax carryover
generated in tax year
beginning in 2020.

Amount of line 4 carried back
to your tax year beginning in
2019 (enter as a negative
number).

Combine lines 1 through 5
and enter the results here
and on line 1 of your
Schedule B.

2

3

4

5

6

Note: The line 6 amounts above
are to be entered on the following
corresponding columns of line 1
of your Schedule B for your tax
year beginning in 2021.

For each column, enter the
applicable portion of the
amount from Part III, line 10,
of your Form 1116 for your
tax year beginning in 2020.

1

(i)
(ii)
10th
9th
preceding preceding
tax year
tax year

(i)
(ii)
(iii)
Tax year Tax year Tax year
beginning beginning beginning
in 2010
in 2011
in 2012

(iii)
8th
preceding
tax year

(iv)
Tax year
beginning
in 2013

(iv)
7th
preceding
tax year

(v)
Tax year
beginning
in 2014

(v)
6th
preceding
tax year

(vi)
Tax year
beginning
in 2015

(vi)
(ix)
(x)
(xi)
(xii)
5th
4th
3rd
2nd
1st
preceding preceding preceding preceding preceding
tax year
tax year tax year
tax year
tax year

(xii)
Totals
(vii)
(viii)
(ix)
(x)
(xi)
(add
Tax year Tax year Tax year Tax year Tax year
columns
beginning beginning beginning beginning beginning
(i)
in 2016
in 2017
in 2018
in 2019
in 2020
through
(xi))

Caution: This worksheet is to be completed only for purposes of computing the amounts to be entered on line 1 of your Schedule B (Form
1116) for your tax year beginning in 2021.

Line 1 Reconciliation Worksheet

DRAFT AS OF
November 17, 2021