I have client who owns a business in Greece and files a return in that country. The Greek taxing authority ignores the business income reported (which is actual) and instead taxes the client of an estimated amount based upon the business code and the location of the business.
In preparing the client's US 1040 we are reporting the actual income of the business rather than the estimated as ascertain by the Greek tax department. (do you agree ?).
My question is the tax credit limitation as per Form 1116 Part III line 15. For purposes of the limitation % do we report the actual revenue (as reported on the 1040) or do we report the basis used by the Greek Tax Department (estimated but higher) ?
Has anyone handled this type of issue?
Thank you
Shelly
SHELDON H. KRONOWITZ CPA P.C.