Thank you for this. I am the one in Italy (the initial post that I commented on was from somebody in Portugal). In Italy, my understanding is that my interest income will be taxed at a flat rate of 26% upon the completion and filing of that tax return and I do not believe any personal exemption exists or is allowed against that income. With my USA effective tax rate being no higher then 12% (of course after considering the standard or itemized deduction) I seemingly will end up with a substantial foreign tax carry forward. I use TurboTax online so I assume your instructions above are applicable to that and I will have to work thru them tomorrow morning my time. Kindly check back here tomorrow if I have any follow up comments or questions once I work thru the program and see the result. With my only income being USA and Canada sourced interest and with tax on that income being due to Italy because I am now a resident and also a citizen, I have to re-source it to Italy in order to generate the FTC necessary to eliminate most or all of the tax liability I will have in filing my USA return as a USA citizen. Just wasn’t sure exactly how to work thru the TurboTax software, especially since the tax slips received from the USA and Canada d not include any foreign tax amount…leaving me uncertain as to how the form 1116 would be populated. I will follow up tomorrow.
