Specify ▶ — 2025 Inst 1116 (PDF)

1. Separate category capital gain or (loss) . . . . . . . . . . . . . . . . . . . . . 1.

2. Foreign source capital gain net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.

3. Capital gain net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.

4. Total U.S. capital loss adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.

5. Adjusted separate category capital gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.

6. U.S. capital loss adjustment factor. (For each separate category, divide line 1 by line 2 and round off the result to at least four decimal places.) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.

7. U.S. capital loss adjustment. (For each separate category, multiply line 4 by line 6.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.

8. Adjusted separate category capital gain. (For each separate category, subtract line 7 from line 1. Enter the result here and include the result on line 1a of the applicable Form 1116.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.

Instructions for Worksheet A

Line 1. For each separate category for which you have foreign source capital gains or losses, combine your foreign source capital gains and losses in that separate category and enter the result on line 1. Show a loss on line 1 of this worksheet as a negative amount and include the loss on line 5 of the Form 1116 you are filing for that separate category.

Line 2. Combine the amounts entered on line 1. If the result is zero or less, don’t complete the rest of the worksheet. Instead, for each separate category with a positive amount on line 1 of this worksheet, include that positive amount on line 1a of the Form 1116 you are filing for that separate category.

Line 3. Enter the amount from line 16 of Schedule D (Form 1040), less the portion of net capital gain you included on Form 4952, line 4g. If the result is zero or less, enter -0-.

Estates and trusts: Enter the amount from line 19 of Schedule D (Form 1041), less any amount shown on line 25 of that Schedule D. If the result is zero or less, enter -0-.

Line 4. Subtract line 3 from line 2 and enter the result on line 4. If the result is zero or less, don’t complete the rest of the worksheet. Instead, for each separate category with a positive amount on line 1 of this worksheet, include that positive amount on line 1a of the Form 1116 you are filing for that separate category.

Line 5.

If both separate categories have a positive amount on line 1, skip line 5 and go to line 6.
If only one separate category has a positive amount on line 1, subtract line 4 from that positive amount. Enter the result here and include the result on line 1a of the Form 1116 you are filing for that separate category. Skip lines 6–8 of this worksheet.

12 Instructions for Form 1116 (2025)

Worksheet B (See instructions.) Keep for Your Records

	Category #1 ▶ Specify ____________		Category #2 ▶ Specify __________
	(1) Short-term	(2) Long-term (15%)	(3) Short-term	(4) Long-term (15%)	(5) Other
1. Separate category rate group capital gain or (loss)
2. U.S. capital loss adjustment amount
3. Subtotal (subtract line 2 from line 1 gain amounts)
4. Net U.S. long-term capital loss
5. U.S. long-term capital loss adjustment
6. Excess net U.S. long-term capital loss
7. Long-term capital gain (or adjustment amount)
8. Limitation percentage
9. Long-term limitation amounts
10. Adjustment amounts
11. Rate differential adjustments
12. Long-term gains
13. Rate differential adjustment
14. Long-term gain
15. Adjusted separate category capital gains and losses

Instructions for Form 1116 (2025) 13

Instructions for Worksheet B

Line 1. For each separate category, combine the capital gains and losses as follows.

Combine your foreign source short-term capital gains and losses and enter the result in column (1) or (3).
Combine your foreign source long-term capital gains and losses and enter the result in column (2) or (4).

Line 2. Complete the Line 2 Worksheet for each column on line 1 with a gain.

Line 4. Enter your net long-term capital loss (if any) from U.S. sources. To determine this amount, subtract your long-term capital losses from U.S. sources from your long-term capital gains from U.S. sources. Enter the loss (if any) as a positive amount in column (5). If you don’t have a loss, leave line 4 blank and skip lines 5 through 14.

Line 5. Combine the amounts (if any) from columns (2) and (4) on line 2. Enter the result in column (5). If you don’t have any amount entered in either column, enter -0- in column (5).

Line 6. Subtract line 5 from line 4. Enter the result in column (5). If the result is zero or less, leave line 6 blank and skip lines 7 through 14 of this worksheet.

Line 7.

If you entered an amount in either column (2) or (4) (but not both) of line 3, subtract line 6 from the amount entered in either column (2) or (4) of line 3. Enter the result in column (2) or (4) on line 7 and skip lines 8 through 12.
If you entered amounts in both columns (2) and (4) on line 3, combine those amounts and enter the result in column (5) on line 7.

Line 8. Divide line 3, column (2), by line 7, column (5). Enter the result on line 8, column (2). Divide line 3, column (4), by line 7, column (5). Enter the result on line 8, column (4). Round off each result to at least four decimal places.

Line 9. Multiply each decimal amount on line 8 by line 6 and enter the results in the appropriate columns on line 9.

Line 10. Subtract line 9, column (2), from line 3, column (2), and enter the result on line 10, column (2). Subtract line 9, column (4), from line 3, column (4), and enter the result on line 10, column (4).

Line 11. Multiply each amount on line 10 by 0.4054 and enter the results here.

Line 12. Combine line 11, column (2), with line 9, column (2), and enter the result on line 12, column (2). Combine line 11, column (4), with line 9, column (4), and enter the result on line 12, column (4). Include the amounts on line 1a of the applicable Form 1116. Skip lines 13 and 14.

Line 13. Multiply the amount on line 7 by 0.4054 and enter the result here in the applicable column.

Line 14. Combine line 6 and line 13 and enter the result here. Include the result on line 1a of the applicable Form 1116.

Line 15. If you have a:

Short-term gain shown in column (1) or (3) of line 3, enter the amount of that short-term gain on line 15, column (1) or (3).
Long-term gain shown in column (2) or (4) of line 3, and line 6 is blank, multiply the amount of each gain by 0.4054 and enter the result on line 15, column (2) or (4).
Short-term loss in any column of line 1, complete the Line 15 Worksheet for each column with a loss.
Long-term loss in column (2) or (4) of line 1, multiply ~~the amount of the lo~~ ss by 0.4054 and enter the result on line 15 in the appropriate column.

After you have completed line 15:

Include line 15 gain amounts on line 1a of the applicable Form 1116, and
Include line 15 loss amounts on line 5 of the applicable Form 1116.

14 Instructions for Form 1116 (2025)

Line 2 Worksheet (For Line 2 of Worksheet B) Keep for Your Records (See instructions below.)

Category #1 Category #2