I’ve been studying the FTC, and I don’t think it is at all as benign and helpful as some here make it out to be. The way I see the calculations work, you only get credit for a portion of the foreign tax paid, but deviously, that percentage is dependent on the ratio of foreign to total gross income. So you never receive a 1:1 benefit for your foreign tax, and you are indeed effectively double-taxed. I could understand the cut off being related to not enough US tax to offset or if it were compensating for a higher US tax rate by charging the difference- but the current way it is structured seems patently unfair.
