@smicp , generally agreeing with your statements I.e.
1. Your total foreign source income would be your gross gain from the alienation of the property : i.e. the difference between Sales Proceeds ( Sales price LESS allowable sales expenses including any commission, transfer tax etc. ) and Your adjusted basis ( Acquisition basis + cost of any improvements over the years LESS accumulated allowable depreciation over the period as income property ). This is the income being doubly taxed.
2. Your Foreign taxes paid on this income is current taxes paid PLUS your Foreign Tax Credit carried forward ).
3. Your total Foreign Tax credit allowable for current tax year ( the year of recognition of the disposal of the asset ) is the lesser of the actual taxes paid / accrued OR allocated UIS taxes on this foreign sources income.
Hope this makes sense .
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pk
