Foreign Tax Credit - on Qualified Dividends in Switzerland stock to a 1040 USA citizen in 2024 and 2025

Forum|Forum|7 months ago
November 18, 2025
1 reply
9 views

in 2024 a 1040 USA citizen paid Switzerland tax on qualified dividends of $140,000 at 35% or $49,000 and in the last five year up to 2024 would get a rebate of $28,000 in the same year and get a $21,000 FTC on his 1040 return. In 2024 the $28,000 rebate happened in 2025 so he reported $49,000 FTC. He uses a Cash based accounting system. Do I have to prepare a 1040X amendment on the rebate of $28,000 in 2024 or can he report the net FTC in 2025 (assuming the same number) of $49,000 less the $28,000 rebate?

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sjrcpa

Level 15

You are not supposed to use foreign tax paid if you know you are getting a refund, no matter when it is actually received.

So yes you should amend the 2024 return to use only $21,000 as foreign tax paid. But if the tax credit won't change?

The more I know the more I don’t know.

C

charleslyeAuthor

Level 3

Thanks for your feedback. The returned FTC was of $46,343 was used as the amount paid. This was the actual amount FTC paid in 2024 because client uses a cost accounting system. He did not know the amount of rebate he would receive in 2025. I guess this was my error and will go the 1040X route. I should have read Pub. 514 before filing!

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