I took a look at the numbers and everything is calculating correctly. The IRS Form 1116 instructions state:
Lines 2 Through 5—Deductions and Losses
You must reduce your foreign gross income on line 1a by entering on lines 2 through 5:
- Any of your deductions that definitely relate to that foreign income; and
- A ratable share of your other deductions that don’t definitely relate to that foreign income, any other foreign income, or U.S. source income.
Because your Schedule A Line 5d SALT deductions are limited to the $40,000 cap, when pulling out the non-income taxes (Sch A 5b + 5c) over to Form 1116 to be deducted, they must be prorated by the amount of the limitation % on Line 7 against the total.
If you select Forms > 1116 Comp Wks, you'll see this ratable share calculation working on both your Sch A 5b and 5c amounts:
40,000/51,775 = 0.772574
0.772574 * 24,703 = 19,085
0.772574*563 = 435
19,085 + 435 = 19,520
However, you seem to be missing out on a deduction that "definitely relate(s) to that foreign income," - the foreign portion of your Sch A Line 5a state tax:
Because you live in California, I highly recommend you take a look at this thread to include CA tax ...
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