How much VTIVX before exceeding $600 foreign tax credit (MFJ)

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krishna1
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Joined: Mon Nov 30, 2020 10:45 pm

How much VTIVX before exceeding $600 foreign tax credit (MFJ)

Post by krishna1 »

Hi,

Would like to know how much VTIVX (Target Retirement 2045) I can own without exceeding the $600 foreign tax credit ? We are Married Filing Jointly. Not sure how to go about using the worksheet at https://advisors.vanguard.com/iwe/pdf/t ... 012022.pdf to do the calculation

Thanks
Topic Author
krishna1
Posts: 3
Joined: Mon Nov 30, 2020 10:45 pm

Re: How much VTIVX before exceeding $600 foreign tax credit (MFJ)

Post by krishna1 »

Hi, Bumping up to see if anyone knows how to calculate. I saw a calculation done in 2017 for a different fund here viewtopic.php?t=234311 . But don't know how to apply the latest FTC worksheet for VTIVX
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grabiner
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Re: How much VTIVX before exceeding $600 foreign tax credit (MFJ)

Post by grabiner »

The worksheet says that the foreign tax paid was 3.30% of the dividend, so a dividend of $18,181 would have foreign tax of $600. With the SEC yield of the fund at 2.11%, you would need about $840K in the fund to get that large a dividend.

(I'm not sure whether the short-term capital gain the fund distributed this year is included in the dividend computation, but it wouldn't make much difference; that gain was 0.3% of the fund value. Most of this year's gain is long-term.)
Wiki David Grabiner
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