Deductions & credits
Your assumptions are correct.
You will need to prepare Form 1116 for your passive income as well as Form 1116 for your nonpassive income. In this situation, Social Security is considered nonpassive income and therefore would not be reported with interest and dividend income. You will need to enter each type of income separately to ensure TurboTax generates 2 separate foreign tax credit forms.
For any income that is resourced according to the tax treaty, you will classify that portion of income accordingly when entering the details for the foreign tax credit under the Deductions & Credits screen in TurboTax. The details would be entered under the Foreign Taxes section. Proceed through the screens and you will see the following screen asking you to choose the type of income. For any income that is resource, be sure to select "Income resourced by treaty" to ensure it is reported accurately on Form 1116.
As far as Form 8833, it is not supported within TurboTax. However, please see this follow excerpt from IRS Publication 519 which outlines when Form 8833 would be required depending upon your specific situation.
