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Page 1 of 3 10:40 - 11-Jul-2017
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Department of the Treasury
Instructions for Schedule K Internal Revenue Service
(Form 1118)
(Rev. October 2017)
Section references are to the Internal Revenue preceding tax year, this carryover amount the amount from line 8, column (iv) of the
Code unless otherwise noted. will expire unused. This activity is shown prior year Schedule K.
on line 5 of the Schedule K (Form 1118).
Line 2. Adjustments to line 1. Report
Future Developments Furthermore, the corporation will generate
on lines 2a, 2b, 2c, 2d, etc. any
a foreign tax carryover in the current tax
adjustments resulting from events that
For the latest information about year which can be carried back to the prior
occurred between the filing of the prior
developments related to Schedule K tax year and/or carried forward to future
year tax return and the filing of the current
(Form 1118) and instructions, such as tax years (see Carryback and
year tax return.
legislation enacted after they were Carryforward of Excess Foreign Taxes in
published, go to IRS.gov/Form1118. the instructions for Form 1118 for details). Line 2a. Carryback adjustment.
This activity is shown on lines 6 through 8 Enter on line 2a, column (xii) the
What’s New of the Schedule K (Form 1118). difference between any estimated
carryback amount you may have used on
Line 1 of the schedule has been revised to Who Must File your prior year carryover schedule (i.e.,
instruct filers to enter the amounts from any estimated carryback amount that you
the appropriate columns of line 8 of the With respect to each separate category of
prior year Schedule K. The line 1 income, any corporation filing Form 1118 entered on line 7, column (xiii) of the prior
instructions have been amended to clarify that has a foreign tax carryover in the prior year Schedule K (Form 1118)) and the
“the appropriate columns of line 8” (see tax year, the current tax year, or both must actual carryback amount.
below). file Schedule K (Form 1118) for that Example. In the 2017 tax year,
separate category of income. Corporation A has excess foreign taxes of
The “Caution” at the top of the Line 1 $100 (i.e., the sum of lines 1 through 4 of
Reconciliation Worksheet on page 3 of Definitions Form 1118, Schedule B, Part II exceeds
these instructions has been amended to Form 1118, Schedule B, Part II, line 11 by
clarify that the worksheet applies only in Excess limitation. If the corporation's $100) entered on Schedule K (Form
cases where the corporation is amending foreign tax credit limitation (Schedule B, 1118), line 6. Corporation A enters $20 on
its 2009 foreign tax credit within the Part II, line 11) exceeds its current year line 7 as the estimated amount of line 6 to
10-year period described in section foreign taxes available for credit (the sum be carried back to the 2016 tax year.
6511(d)(3) (or section 6511(c) if the period of Schedule B, Part II, lines 1 through 4), Corporation A enters $80 on line 8 as the
is extended by agreement). the corporation has excess limitation. carryover amount for following years. The
Excess foreign taxes. If the actual carryback amount to the 2016 tax
corporation's current year foreign taxes year is later determined to be $15. In the
General Instructions available for credit (the sum of 2018 tax year, Corporation A enters $80
Schedule B, Part II, lines 1 through 4) on line 1, column (xii) as the carryover
Purpose of Schedule exceed its foreign tax credit limitation from the 2017 tax year, corresponding to
Schedule K (Form 1118) is used to (Schedule B, Part II, line 11), the the amount entered on line 8, column (xiii)
reconcile the corporation's prior year corporation has excess foreign taxes. of the Schedule K filed for the 2017 tax
foreign tax carryover with its current year year. Because the estimated carryback
foreign tax carryover. Corporations are amount of $20 from the 2017 tax year to
thus reporting running balances of their Specific Instructions the 2016 tax year (entered on line 7 of the
foreign tax carryovers showing all activity Important: All information reported on Schedule K filed for the 2017 tax year)
since the filing of the prior year income tax Schedule K (Form 1118) must be in exceeds the actual carryback of $15, on
return. English. All amounts must be stated in the Schedule K for the 2018 tax year,
Lines 1 through 3. On these lines, the U.S. dollars. Corporation A enters the $5 excess ($20 -
$15) on line 2a as a positive number.
corporation computes its adjusted foreign Checkboxes at top of page 1. Assuming no other adjustments are
tax carryover from the prior tax year which Complete Schedule K separately for each needed, the total carryover amount from
is available for credit in the current tax category of income. Check the box for the 2017 entered on line 3, column (xii) of the
year. The line 3 total is included on Form category of income for which this schedule 2018 Schedule K will be $85 ($80 + $5).
1118, Schedule B, Part II, line 5. is being completed.
Line 2b. Adjustments for section
Line 4. If the corporation has a current Line 1. Foreign tax carryover from the 905(c) redeterminations. Enter on
year excess limitation (defined below), prior tax year. Enter on line 1 the line 2b any adjustments needed for
some or all of the line 3 adjusted foreign amounts from the appropriate columns of section 905(c) redeterminations. See
tax carryover amount will be utilized in the line 8 of the prior year Schedule K (Form Foreign Tax Credit Redeterminations in
current tax year. This activity is shown on 1118). For example, enter on line 1, the instructions for Form 1118 for
line 4 of the Schedule K (Form 1118). column (i) of the current year Schedule K additional information.
Lines 5 through 8. If the corporation has the amount from line 8, column (ii) of the
current year excess foreign taxes (defined prior year Schedule K. Enter on line 1, Lines 2c, 2d, 2e, etc. Include on
below), none of the line 3 adjusted foreign column (ii) of the current year Schedule K these additional lines the following types
tax carryover amount will be utilized in the the amount from line 8, column (iii) of the of adjustments needed to reflect:
current tax year. If the corporation has any prior year Schedule K. Enter on line 1,
remaining carryover from the 10th column (iii) of the current year Schedule K
Jul 11, 2017 Cat. No. 52009v
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