According to my 1040 tax return I can deduct $5 foreign tax credit because in 2020 I had earned passive category income (Part 1, Line 7 calculation) outside the US. I paid no taxes in foreign country on my foreign income because I didn't have to. The Form 1116 shows and calculates $5 foreign tax credit which goes to schedule 3 (Form 1040) Line 1 and 7 and can be deducted on Form 1040, Line 20.
Form 1116, Part 2 Line 8 is blank so is Part 3 Line 9, but line 10 (carryover) shows my previously paid taxes and calculates my Foreign Tax Credit ($5) in Part 3 Line 24 which flows to part 4 line 35 ($5). If I cannot deduct my tax credit, why Turbo Tax Form 1116 shows that I can do that even if I did not pay foreign taxes on my foreign income in 2020 and uses my foreign taxes paid in previous years? It also attaches Foreign Tax Credit Carryover Statement to my Form 1040. I'm a little lost here.
