How do apply foreign tax carryover credits?
I have a foreign tax credit carryover to 2016 from 2015 and also paid foreign tax in 2016. Do I utilize the 2016 amount for the 2016 credit first and then the carryover amount from 2015 OR do I use the 2015 carryover amount first and then the 2016 amount?
For example, 2015 foreign tax carryover is $75 and 2016 foreign tax paid was $100. I am eligible to take a $60 credit in 2016. Do I apply this credit to the 2015 carryover so that the remaining 2015 carryover is $15 and the 2016 carryover to 2017 would be $100? Or, does the 2015 carryover remain at $75 and the 2016 carryover becomes $40?