
Demystifying the Form 1118 Part 9. Schedule G Reduction of Taxes Paid, Accrued, or Deemed Paid by a CFC
By Anthony Diosdi In order to provide the Internal Revenue Service (“IRS”) with the information necessary to claim a foreign tax credit, a U.S. corporation claiming a foreign tax credit must attach Form 1118 otherwise known as “Foreign Tax Credit - Corporations,” to its tax return. This is the ninth of a series of articles designed to provide a basic overview of the Form 1118. This article is designed to supplement the instructions for the Form 1118 promulgated by the IRS.Introduction to Schedule GSchedule G of Form 1118 is designed to report any reductions of the deductibility of foreign credits claimed by a domestic corporation. Part 1- Reduction AmountsLine A. Reduction of Taxes Under Section 901(e)Line A asks the preparer to reduce taxes under Section 901(e). Internal Revenue Code Section…