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Deductions & credits
If active income ( i.e. wages or self-employment ), then the most benefit you will get is for US not to tax you on the income. So you a choice of Foreign Earned Income Exclusion OR use Foreign Tax as a deduction ( limited by SALT limitations of US$10,000 ) OR Foreign Tax Credit which again is limited ( i.e. allowable portion ) by the lower of allocated US taxes on the foreign income OR actual amount paid ).
Thus we are back to your original question -- how to get the FTC used up if you continue to have Foreign Income and Foreign Tax Paid each year. It is lost . There is no curative path as long as the situation persists.
Sorry for the "No Good" News.
pk
‎August 31, 2024
9:27 AM