Foreign Tax Credit & Reclaimable Tax

Technical topics regarding tax preparation.
#1
gusser  
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283
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7-Nov-2019 5:18pm
Location:
CT
This is a first for me. Goldman Sachs actually lists reclaimable tax on it's 1099. I know you can file a tax return in various countries to obtain refunds (tax treaty countries may refund in full) but does the foreign tax paid on line 7 of the DIV have to be reduced by the potential reclaimable tax? I have never done this and never knew about it until now. Per IRS instructions to Form 1116:

"You can’t take a credit for the following foreign taxes:

Taxes paid to a foreign country that you do not legally owe, including amounts eligible for refund by the foreign country. If you do not exercise your available remedies to reduce the amount of foreign tax to what you legally owe, a credit for the excess amount is not allowed."
 

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