Form 6251: Simplified FTC election must be entered

Forum|Forum|2 years ago
March 6, 2024
1 reply
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In my Federal Review, I get the following question: Form 6251: Simplified FTC election must be entered.

I then have to fill out the following form:

Simplified Foreign Tax Credit Election Smart Worksheet

A) In the first tax year after 1997 that the foreign tax credit was claimed, was the Simplified AMT

Foreign Tax Credit Limitation elected? This is the first year [This box is CHECKED and I can't modify it] Yes, No

B) Elect to use the Simplified AMT Foreign Tax Credit Limitation this year? Yes, No

I am not sure how to answer this question. Or what it means. Through some initial research, it seems like if you make a selection here, it could affect all future tax returns? So just want to make sure I choose correctly here. Thanks in advance for your help!

Ask the Experts - MetLife III - Mar 2024

taxcurious1Author

Level 2

RobertB4444

Level 15

It depends on what the foreign income is. The simplified method is, well, simple. If your income is simple like wages or interest or dividends or something then choose the simplified method. If you have foreign income from trusts and other complex sources then you need to select no and start answering all of the questions.

@taxcurious1

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taxcurious1Author

Level 2

Thank you! Yes the income is simple. I only have income from wages and interest/dividends.

Couple followup questions:

For the question: "Indicate whether this is the first year you are eligible to make the simplified foreign tax limitation election for alternative minimum tax (AMT) purposes. Once you make this election, it applies to all later tax years and can't be changed unless you obtain IRS consent.", how do I know if this is my first year? I don't remember ever having to make this decision in the past so I think it would be my first year?
If I select yes to use the simplified AMT foreign tax credit limitation this year, how does that affect future years? Does it mean that I can't use the simplified AMT FTC limitation in future years? Does it mean that I'll have to always use it in future years?