Form 1116 — Foreign Tax Credit (Individual, Estate, or Trust)

This skill produces an audit-grade draft of Form 1116 from the user's foreign income, foreign taxes paid or accrued, and US tax facts. It walks the form line by line, applies the IRC §904 limitation per category (basket), validates the result, and emits a deliverable the filer can transcribe to a paper or e-file form.

The math is mechanical. The judgment is in (1) whether the user even needs Form 1116 vs. the de-minimis $300/$600 election, (2) which basket each income item belongs in, (3) how to allocate deductions between foreign- and US-source income, and (4) whether the FTC or a Schedule A deduction yields a better result.

This skill optimizes for "ask, don't guess." Foreign tax facts are highly user-specific; the agent must collect inputs, not invent them.

When to invoke

Engage this skill when any of the following is true:

• The user explicitly mentions Form 1116, "Foreign Tax Credit", "FTC", "foreign tax carryforward", or "FTC limitation"
• The user has a 1099-DIV with an amount in Box 7 (foreign tax paid) and wants to claim it
• The user paid foreign income tax on wages, self-employment income, dividends, interest, royalties, or capital gains earned outside the US
• The user is a US citizen or resident alien with foreign-source income and wants to avoid double taxation by credit (not by exclusion)
• The user is an estate or trust with foreign-source income reportable on Form 1041