Deductions & credits

I have been slow in responding to your 2nd post, DianeC958, because I wanted to be absolutely sure of what I am about to say:
1. It is NOT true that residents of the Netherlands (and of many other countries worldwide) should not list income from their IRAs (including 401k, 403b, 408, and other “qualified” retirement plans) on Form 1116. In the vast majority of tax treaties, these types of income are re-sourced to the country of residence and are taxed in the foreign country as regular income. Moreover, the values of Roth IRAs, stocks, bonds as well as holdings in US mutual fund companies (including all non-qualified retirement plans) are taxed here (i.e., in the Netherlands) as wealth, and in your US tax return these values should be listed on a separate Form 1116 for passive category income.
2. On the other hand, it IS true that social security benefits and rental income from US property are only taxed in the US, and should not be listed on a Form 1116. (As an aside: Even though the Netherlands does not tax rental income on property outside its borders, it does require its residents to list the [non-taxed] value of these properties on their Dutch tax returns.)
3. My references to the country that “taxes your income first” (typically, your country of residence) was my shorthand way of referring to the country that can claim that it is the income’s source. (The “sourcing” terminology gets tricky with types of income that are re-sourced by treaty.) The country that “taxes your income second” (again my shorthand) refers to the one that you need to request a tax credit from for taxes paid in the country that taxed it first. Once you are a Dutch resident, the Netherlands taxes your (re-sourced) IRA-type income and your worldwide wealth (excluding non-domestic real estate) first. You must then use Form 1116 to obtain tax credits (to prevent double-taxation of this income) on your US income tax return, since for these types of income the US gets second “crack” at taxing them. The tax treaties ensure that there is no income type that requires you to seek credits from both countries. The country that has second crack, is the country to which you apply for tax credits.
Some other useful facts about residing in the Netherlands:
a) As soon as you have lived in the Netherlands for 4 months, you are a Dutch resident (for both US and Netherlands) and are required to pay taxes retroactively to the day you arrived. (You are also required to buy health insurance from a Dutch health insurance company. Moreover, if you had not previously done so, you are also delinquent in registering your address and arrival date with your local city hall.)
b) Dutch income taxes are of four types: income (wages, re-sourced IRAs, etc.), business (about which I know nothing), wealth (market value of stocks, mutual fund holdings, non-qualified US retirement plans, etc.), and social health contribution. All these taxes are progressive, so it is not easy to convey precisely how they might apply in any specific case. However, anyone contemplating retirement in the Netherlands should be aware that as soon as your income (e.g., from IRAs) exceeds about 35,000 Euros, almost 40% of every penny over this amount goes to taxes (and it reaches over 50% for income over about 70,000 Euros). The only way for most retired folks to avoid this, is to have enough wealth to cover your expenses above this amount. Hint: Instead of renting your Stateside house, it might be wisest to sell it in case your other wealth won’t provide you with sufficient cash-flow.
I hope this information proves useful to others. It certainly would have been useful to me when we moved to the Netherlands back in 2016.