Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Foreign Tax Credit and Completing Form 1116

Summary and Exercises

Question 3 of 6

The scenario continues. Miguel Candela is a 35-year-old, single, U.S. citizen living in Puerto Rico. Miguel earned $39,596 working for the U.S. government. His Puerto Rico income tax liability is $4,921 and his federal Form 1040 tax liability on line 16 is $3,119.

Does Miguel need to reduce his foreign taxes on Form 1116, line 12?