mtp79 and rtrace11,
Good question and answer. In general, if all the foreign income earned by the trust is treated as distributable to its beneficiaries for fiduciary income tax purposes, any foreign tax credits attributable to that income would flow through to them on Schedules K-1. In that case, the Form 1116 release issue should not be relevant to the trust; such income and related credits would need to be addressed by the beneficiaries and their tax advisors. However, to the extent that all or a portion of the income is not treated as distibuted and therefore taxed to the trust, Form 1116 availability should be a concern.
