Deductions & credits

Hi @Mike9241 thanks for the input despite your busy schedule.

As I am not an expert, I may not have understood your answer completely but allow me to ask whether my understanding is correct:

1. Electing the "Simplified Method" for the AMTFTC uses the same calculation as the regular FTC for the AMT, meaning I will have only one form 1116 in my return.

2. The "Other Method" which is the more complex method calculated the AMTFTC separately by consdering only income and deductions allowed for AMT purposes and if I choose this I will have two 1116 forms in my return?

3. Just to clarify, since this is the first year that I am claiming the Foreign Tax Credit (FTC), I am eligible to make an election between, "Simplified" vs. "Other" and although you are indicating whether one of the other would be better for my situation, but I must elect the simplified method as it is the first year I am clamining the AMT FTC? Sorry that I am bit confused here...

4. Since the decision on election can not be reserved unless an IRS consent is given allow me to ask the following question:

- It is very likely that my income situation may not change for the coming years. Again, I confidently expect that there will be two sources of income - General/Passive. 1) General - which will be the main source of income in the form of a foreign income which I pay/accrue income tax since I work and reside in a foreign country and 2) Passive - interests gained from foreign bank accounts which again I pay taxes on. These are the sources for taking the foreign tax credits in the first place.

- As mentioned in my original post, the reason I am claiming FTC this year is due to Foreign Earned Income Exclusion (FEIE) not fully covering my foreign income. But I am curious to know whether if I have gained lower general and passive income in 2024 and expect that it would be fully excluded under FEIE, how will AMT and its reporting work? Is AMT only relevant when I have foreign tax credtis to claim? So if in 2024 I have no foreign tax credits as the FEIE covered to exclude all my foreign income, I would like to be required to report anything related to AMT?

Sorry for the rather long message and I hope the queries make sense, if not, please do not hesitate to ask for clarifications.

In addition, one side question: I am being asked to provide a detailed explanation on "foreign tax reduction" as below screenshot:

Could you shed a bit more light on your experience on this explanation? Can I just say "None"?

Thanks again for you or anyone's support.