Same here, it feels unfair, I had a foreign rental profit of 6 thousand dollars, I paid taxes on that profit in Europe, and now I am required to pay taxes on that profit even here in US, I wasn’t expecting that. Due to the calculation involving the standard deduction which won’t allow me to use any of my foreign tax credit that I earned this year. And yes, it is supposedly calculated corectly like that. Very few people seems to understand this correctly. The way that this is explained is that you are not being double taxed since the portion of the standard deduction which is allocated for your foreign income offsets foreign taxes paid. The standard deduction is being allocated based on your gross income, so if you have a small net foreign profit, but large gross foreign profit before your deductions, the large portion of the standard deduction allocated to the foreign income will eliminate your net profit, and won’t allow the credit to be used this year, but it will be forwarded to next year. You pretty much use up portion of your US standard deductions against the foreign profit.
