@pk & @gmangesh
Like @gmangesh, after putting quite a bit of thought into this issue with the Ttax software, my question is: "Is there a way to report this behavior to TurboTax so perhaps they can improve TT's handling of this use case?"
The software shouldn't be:
> telling users things like, it "can't see the income" without explaining why, and instructing exactly where to enter whatever it can't see but needs to see, especially when the foreign taxes have been uploaded on a 1099-DIV; if more detail about the related foreign income is needed, why not just ask for it?;
The software shouldn't be:
> steering users to the FTC safe harbor, then dropping the topic with no explanation of why or what to do when the safe harbor doesn't generate an FTC that can be utilized in the tax year.
The software shouldn't be:
> skipping the Form 1116 track entirely, such that users are left to override a bunch of erroneous "zeroes" to even get the software to report the actual carryover amount.
I don't think improving the software's FTC flow such that it generates correct carryover amounts in all cases is "offering tax advice." I know I only came here for help because the program was asking for info it already had, and providing incorrect results. I had no idea how to make it "see" what it said was missing. To me, the flow should be: Does the safe harbor apply, if yes, great. If not, fine, go ahead with the key Form 1116 questions ... wouldn't take long to determine whether any of the FTC may be used in the tax year, and the rest should carry over.
Everyone has to decide for themselves what to do, practically, but I do not plan to amend my 2023 return either, as there is no change in 2023 tax. I also plan to add my FTC carryover as an override to my 2024 prep next year, with a brief supporting statement of how it arose and could not be used in 2023. I think that is reasonable, and I'll keep a copy of this discussion in my file in case anyone might think it is not.
Also, I believe the safe harbor is there to allow the FTC in modest amounts in the current year, without a bunch of Form 1116 complexity, so long as the FTC can be used in that year. I don't think it's supposed to deprive anyone of a carryover if it actually doesn't apply.
Thank you both for an interesting and informative discussion!
