Hello,

I have what should be a very simple question, though neither the IRS helpline, the IRS webpages, nor the local IRS office was willing or able to answer!

I've lived abroad for many years. For 2012 I filed the f1116 form for the tax on interest income in my non-US savings accounts. I did not use all the foreign tax credit, and there was almost $400 left over. For 2013 I do not have any taxes on foreign savings interest (well I do, but will be able to reclaim them from the foreign government), so do not need to file a f1116. I will owe taxes in the US this year due to a combination of passive foreign income and US capital gains.

So my question is, when I file for 2013, how exactly do I document the carryover amount from last year's f1116? Do I simply enter it on my 1040, line 47, and attach a statement and/or photocopy of last year's f1116, showing where I got the amount? Or do I have to file a new f1116 just to show the carryover, even though I have no foreign tax to claim for 2013?

Any help would be appreciated! Thanks in advance.

#1;in general, you can choose to take the amount of any qualified foreign taxes paid during the year as a foreign tax credit or as an itemized deduction on sch A of 1040. You can carry back for one year or carry forward for 10 years the unused foreign tax. Unused foreign taxes paid because of the
limit can only be carried forward to a year in which you have an excess limit. Then the unused foreign taxes paid is applied to that year's excess.
If there is no excess limit in a year, you continue to carry forward all of the prior years of carried forwards until you get to a year in which you have an excess limit.



#2; For each year in which you might file f1116, you need to calculate whether the year produces a carryover ,line 13 exceeds line 20, or can absorb a carryover ,line 20 exceeds line 13 . The sum of all unexpired carryforward is what goes on line 10 of the next year's f1116;as mentioned above, you can enter it on 1040 line 47 or on Sch A line 8 , I guess.you will retain a schedule attached to your annual US expat taxes that includes all of the foreign tax carryforwards for which you are eligible.
As you can see, only only a feww CPAs/EAs canhandle this sort of internatinla taxation /returns or etc, so you can contact the intl tax repre att he IRS for more info in detail.

Thanks for those clarifications.

So, in order to actually account for where this year's credit comes from, do I need to fill out a new f1116?

For each year in which you might file f1116, you need to calculate whether the year produces a carryover ,line 13 exceeds line 20, or can absorb a carryover ,line 20 exceeds line 13 . The sum of all unexpired carryforward is what goes on line 10 of the next year's f1116;as mentioned above, you can enter it on 1040 line 47 or on Sch A line 8 , I guess.you will retain a schedule attached to your annual US expat taxes that includes all of the foreign tax carryforwards for which you are eligible.


Yes sicne you need to enter the unused foreign taxes in the separate category from another tax year that are eligible to be carried forward to or back to 2014 in part 3 line 20. HOWEVER,If, for any year, you elected to claim the foreign tax credit WITHOUT filing Form 1116 , then,
You cannot CARRY OVER unused foreign taxes paid or accrued in a year to which the election does not apply to or from any year for which you made the election.
•The carryforward period is not extended if you are unable to use a carryforward because you made the election.
•You should not not reduce carryforward by the amount you would have used in the election year if you had not made the election.
As siad, previously, yu can talk ot an intl tax repre at the IRS fo rmore help in detail

Thanks, that makes sense.

Sadly, I've been unable to get the right information from anyone at the IRS. I tried their helpline as well as going in to the local office and they said they are unable to answer questions on my issue. They suggested I contact a CPA or tax attorney!

Actually not many CPAs/EAs Tax Attorneys are very familiar with intl taxation.So i guess you can file f1116 each year for your ftc c/o as there is no penalty in filing f 1116 with the IRS.