In case this helps any other reader, a Texas CPA told me the following regarding my question when posted to a CPA community board:
Question 1: Does the term "foreign qualified" apply only to "qualified dividends" or does "foreign qualified" also apply to the second half of the statement which is "l.t. capital gains"
Answer: If your client is a US citizen, general rule is that the capital gains are sourced to the US. IRC 865(a)(1). "Stock" is not an intangible for these purposes - see definition of intangible in IRC 865(d)(2). Thus, absent a treaty permitting re-sourcing of that gain, this income would not help to release any FTCs. Note that foreign qualified dividends are qualified generally only if the source country has a treaty w the US, or if the corp is incorporated in a US-possession, or if the foreign payor corp is publicly traded in the US.
Question 2: My mutual fund company provided a % for foreign source income but did not provide a separate % for foreign LTCG so I would not know how to calculate foreign LTCG if in fact I need to report FOREIGN LTCG.
Answer: See above reply.
