Serbinski Accounting Firms

I’m struggling with the Instructions for Form 1116 (2010), page 17, center column, “1. Allocation of foreign lossesâ€￾. The first paragraph reads, “If you have a loss on line 14 of one Form 1116 and you have income on line 14 of one or more other Forms 1116, you must reduce the foreign income by a pro rata share of the loss before you use any remaining loss to reduce U.S. source income.â€￾

My question is this: Where (what line of what form) would I use a remaining loss to reduce U.S. source income? Where does this subtraction actually take place?

I wish the IRS had used the example at the bottom of the center column with a $10,000 general category loss and then showed how and where the numbers flow out from there.

Thanks for your help!

(By the way, I've applied for the automatic filing extension for this year.)

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