I am working on a Trust's K-1 form and 1041. All income has been given to the trust's beneficiary and therefore need to allocate the income and credits for her taxes (K-1). We have US federal withholding and foreign tax withholding from Canada (Foreign tax credit). What additional forms need to be completed to give this credit to the beneficiary? Thanks for the help.

“We have US federal withholding and foreign tax withholding from Canada (Foreign tax credit). What additional forms need to be completed to give this credit to the beneficiary?”=====You need to attach Form 1116 if you elect to claim credit for income or profits taxes paid or accrued to a foreign country or a U.S. possession. The estate or trust may claim credit for that part of the foreign taxes not allocable to the beneficiaries (including charitable beneficiaries). Enter the estate's or trust's share of the credit on line 2a. Then your beneficiary will report it on 1040 line 47 or itemize it by reporting it on Sch A of 1040 line 8 as other taxes.

Thanks so much for the information. I want to make sure I understand.

If I want to give all the credits to the beneficiary and not claim any of the foreign tax credit for the trust would the trust need to complete a 1116 to add to the 1041 and K-1 or just the beneficiary file a 1116 since she will be receiving all the income and all the credits from the trust?

Thanks so much for clarifying it for me!

"If I want to give all the credits to the beneficiary and not claim any of the foreign tax credit for the trust would the trust need to complete a 1116 to add to the 1041 and K-1 or just the beneficiary file a 1116 since she will be receiving all the income and all the credits from the trust? "===>Then, the beneficiary NEEDS to fiel form 1116 on her return.

Thank you so very much for your help and your time. I understand and appreciate the help!

There is no space for Form 1116 on Sch K1 of 1041;

Trusts are entitled to a Foreign Tax Credit on 1116 on foreign taxes paid on income also taxed in the U.S. Regulation §1.642(a)(2)-1 permits an estate or trust to take a credit for taxes paid but “only for so much of those taxes as are not properly allocable under that section to the beneficiaries