Topic: When FTC & AMT (incremental $ tax kicking-in) happen first time, whether to elect 'Simplified'
@pk said: >> if your foreign income is of general category ( wages, interest income etc. ) then you are correct in using the simplified method. If you have incomes from many categoreis, including trusts, complicated investment portfolios etc. and / or multi category carry over credits, do not choose simplied method.
My Qs: Thanks so much, very helpful (re FTC when AMT (incremental $ tax) is indeed kicking-in!
1) Can you elaborate on why + what the effect/ interplay tends to be please?
2) Is the 'simplified election' just to save man-hours when filling forms? OR does it also help reduce near term tax bills (i.e. give you a higher immediate foreign tax credit limit figure)?
3) Going forward if one expects to have mainly foreign property rental income which may sometimes be deemed passive categ (in years where lesser time is spent on managing the properties), and may sometimes be deemed general income categ (in years where more time is spent on property biz) then what is likely the better choice?
4) Since the diff in Form 1116 (FTC calculator) and Form 1116 AMT version is mainly that the latter strips out deductions (from numerator and denominator of the ratio), is it the size of your typical overall US itemized deductions that drives the choice (i.e. Simplified or not)?
Thanks so much!!
