to get a benefit of the unused FTC you need foreign source income of the same nature that gave rise to the carryover. in decades of professional practice, I have never seen FTC carryover fully used. Eventually the carryover period expires and the FTC is lost.
FTC carryover arise because the rate paid on the foreign income is higher than the effective US tax rate. an over-simplified example: foreign income $3000 FTC paid $750 (25%) us effective tax rate on you return 18%
$540 allowed $210 carryover.
the actual computation is different but the result is the same it's the ratio of foreign income to federal taxable income times the federal income taxes. say 3000 foreign income with us taxable 100000 = 3% federal tax 18000 allowed $540 or if less the amount of FTC for current year + any carryover
so to use your carryover you need foreign income on which you paid a lower rate than your US effective rate.
you can carryback 1 year and then
forward 10 years any foreign tax you
paid or accrued to any foreign country
or U.S. possession (reduced as
described under Line 12, later) on
income in a separate category that is
more than the limitation.
