If unemployment benefits is not earned income, and one cant use F2555 foreign income exclusion help with double taxation, then can one use F1116 foreign tax credit to help with double taxation? if so, how do you do that in Turbo Tax? When i try , it creates "Generation Skipping tax" in error.
Per pub 514 page 7, bottom of first two columns says:
Income Tax
A foreign levy is an income tax only if it meets both of the following requirements:
1. It is a tax; that is, you have to pay it and you get no specific economic benefit from paying it.
2. The predominant character of the tax is that of an income tax in the U.S. sense.
A foreign levy may meet these requirements even if the foreign tax law differs from U.S. tax law.
Unemployment payments: A foreign tax imposed on an individual to pay for unemployment is not payment for a specific economic benefit if the amount of the tax does not depend on the age, life expectancy, or similar characteristics of that individual.
