Why would I need to adjust my foreign income for foreign qualified dividends, capital gain distributions, and capital gains and losses?

The IRS requires certain individuals to adjust their foreign qualified dividends and capital gains and losses. Most people qualify for an exception to this requirement, but if either of the following apply to you, you must adjust your foreign qualified dividends and capital gains and losses:

• Your foreign qualified dividends and capital gains are at least $20,000.
• Your overall qualified dividends and capital gains are greater than:
  • $394,600 if Married Filing Jointly or Qualifying Surviving Spouse
  • $197,300 if Single
  • $197,300 if Head of Household
  • $197,300 if Married Filing Separately

If you qualified for the adjustment exception, you can answer Yes to claim the exception here.