topic Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit? in Deductions & credits

Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

11486 — Fri, 11 Apr 2025 02:14:18 GMT

I have foreign taxes paid of $610.47 on line 7 of form 1099-DIV. All of the foreign taxes paid were on passive ordinary dividend income from line 1a of form 1099-DIV. The TurboTax program assumes I must file form 1116 because the foreign taxes paid exceeded $600, which could be a limiting factor as I am married filing jointly. However, if you log into TurboTax.intuit.com and read Claiming the Foreign Tax Credit with Form 1116, you will discover when you scroll down to the heading Foreign Tax Credit Without Form 1116, that there are three conditions where you do not need to file Form 1116. The first of these, which is applicable to me, is “if all your foreign taxed income was 1099 reported passive income, such as interest and dividends, you don’t need to file form 1116, provided that any dividends came from stock you owned for at least 16 days.” That is the situation with my $610.47 foreign taxes paid. Apparently the TurboTax program will not allow you to take the full $610 credit on passive foreign income because it thinks you are subject to the second condition, which says that you must file form 1116 if you paid more than $600, but by implication must conclude that some or all of the income was not passive income. This becomes apparent because the program prompts you to tell the program what entity or country paid the. foreign dividend on which the foreign taxes were paid. In my case, using form 1116, TurboTax only allowed me a $309 foreign tax credit, instead of the $610 credit I should be entitled to without having to file form1116. They applied the excess $301 as a carryover to my 2025 taxes.

I believe this is a program oversight that needs to be addressed by TurboTax. If anyone can explain to me where my thinking is incorrect, I would appreciate hearing from them in this forum. Also, if I am correct in my analysis, does someone know how to report this oversight to TurboTax?

Thank you.

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

pk — Fri, 11 Apr 2025 02:31:38 GMT

@11486 , sometimes it is better to claim only the safe harbor amount of US$600 for MFJ filer. You will get the full amount. If you choose the form 1116 , it is always going to be limited to LESSER of actual Paid and Allocated US tax on the same foreign source income. The allocation is based on multiplying the total US tax on world income by the ratio of Foreign Source income to World Income. That is what the tax treaty calls out.

Is there more I can do for you ?

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

11486 — Fri, 11 Apr 2025 03:11:33 GMT

I am not sure if you addressed my issue with the program. As I stated above, one of the exceptions to filing form 1116 according to turbotax.intuit.com is if all the foreign tax income was passive income. That is the case with me. I did not choose to file form 1116, the program demanded it, which I think is wrong. I found the first sentence of your answer interesting because I thought I would be misreporting to the IRS the amount of foreign taxes paid. If there is indeed a "safe harbor" of $600 to avoid filing form 1116, that is news to me and the program did not give me that option. I certainly would have just claimed a $600 foreign tax credit if I knew such a maneuver was above board. In any event, I appreciate your input.

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

pk — Fri, 11 Apr 2025 17:09:19 GMT

@11486 , just to be sure,

(a) I created a dummy return with Social Security income, single tax payer, Dividend income of $20,000 and Foreign Taxes paid of US$ 300 ( the safe harbor amount for a single filer ). TurboTax automatically showed my tax amount ( the little Fed Tax box on top ribbon area).

(b) Then just for kicks I went to Deductions and Credits tab, chose " I will choose what I work on ", and selected " Foreign Tax Credit" and went through the screens to select "various" as foreign source income, Foreign income US$10,000 ( i.e. 10,000 out of the 20,000 dividend income ). Went to forms mode to see what Turbo has done -- it had filled out a Form 1116 ( copy-1 ) worksheet. Now I see that it has recognized the $300 as the foreign Taxes paid. and as credit / exception for line 18. Form 1040 worksheet shows the computed taxes and the credit of $300. Thus proving that TurboTax recognized the Foreign Tax Credit "Safe Harbor " amount.

(c) To your question about legality of recognizing incomes and expenses/ taxes paid --- While it is mandatory you recognize each and every income, there is no such requirement for taxes paid ( Foreign ) and/or expenses. This is generally expressed as " All income is taxable unless excluded by statute and all deductions are disallowed unless specifically allowed by statute".

So to answer your situation, try recognizing safe harbor amount for your filing status and see what TurboTax does.

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

11486 — Fri, 11 Apr 2025 22:30:40 GMT

Thank you for this, PK. I appreciate the time you put into my problem.

Since my original post last night (April 10), I’ve done some further research regarding the TurboTax.intuit.com article > Claiming the Foreign Tax Credit with Form 1116 > Foreign Tax Credit Without Form 1116. I was interpreting their three bullet point exceptions as each being an independent exception for the need to file form 1116. However, after consulting the IRS.gov instructions for filling out form 1116, the instructions make it clear that all of the three bullet point exceptions are required in order to qualify for being exempt from filing form 1116.

I think that the TurboTax article is somewhat ambiguous and confusing, the way it presents filing for the foreign tax credit without form 1116. The article talks about a qualifying definition in the first sentence, but then goes down to say “for example,” followed by the three bullet points, making me think that each bullet point was a qualifying definition. Perhaps I am the outlier to how most people would interpret the way TurboTax presented the section Foreign Tax Credit Without Form 1116.

My misunderstanding of the actual qualifications needed to claim the foreign tax credit without filing form 1116 made me think that TurboTax’s refusal to grant me a foreign tax credit in excess of $600 (in my case $610) was a glitch in the program. I was wrong and TurboTax will properly file with or without form 1116 based on the inputted foreign tax paid.

PK, to your tax simulation, I have no doubt that TurboTax performed as it should. What I would be interested in, were you to do another simulation (for married filing jointly), where the foreign tax credit is, let us say $700, whether Turbo Tax would grant the full $600 foreign tax credit or some lower amount based on the criteria you used for foreign dividends.

I have concluded that it is just one of the perversities of the tax code that you can get a full $600 foreign tax credit, no questions asked, if this is the amount you enter on line 7 of form 1099-DIV TurboTax worksheet. However, if you were to enter on line 7 an amount greater than $600 (let’s say $650), it is my belief that TurboTax will calculate a substantially smaller foreign tax credit than the “safe harbor” amount of $600 (based on the criteria for foreign dividend amount and country or entity paid entered), creating a carryover of the difference to the following year. This seems fundamentally unfair to foreign taxpayers such as myself.

PK, you seem very knowledgeable about taxes and tax laws, and I am not questioning your assertion that a $600 safe harbor provision exists. The only way that you could utilize this maneuver in TurboTax would be to enter $600 on line 7 of the TurboTax worksheet instead of the actual greater amount. I find it odd that TurboTax does not give filers who have a de minimis amount of foreign taxes paid over $600 the suggestion to not enter the actual amount but only the $600 amount to avoid filing form 1116. I would certainly have done so had TurboTax suggested that as a viable option to avoid the rigamarole of filing form 1116.

Any further thoughts?

Many thanks.

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

pk — Sat, 12 Apr 2025 17:29:48 GMT

@11486 ,

(a) I went back and tried with 301 ( 300 resulted in safe harbor credit of 300 ), -- and Turbo cleared out the 1116 data and deleted the safe harbor credit.. It therefore isa acting as it should.

(b) Turbo does not warn you about the safe harbor, because it assumes that the tax-payer knows and needs to choose the amount of Credit/Deduction . It cannot legally suggest to the Tax Payer that instead of say $800 ( as shown on the 1099-DIV as foreign tax paid ), the taxpayer may be better off by claiming only $600. Because it is your return and it is your choice. Besides officially it does not have all the facts at this point ( while filling out form 1116 ), even though it can guess . It is just playing by the rules and leaving all the decision s to the User/Client/Taxpayer.

(c) Also note that this safe harbor availability is kind of limited to only US based earnings i.e. where a 1099-DIV/INT is issued. I don't remember the exact statute language on this though.

I hope this now closes your query -- Is there more I can do for you ?

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

11486 — Tue, 15 Apr 2025 23:53:04 GMT

PK -

I agree that we have established that Turbo Tax correctly determines the foreign tax credit one is eligible for using form 1116. However, I do not agree with two of the assertions in your responses.

Assertion #1. You claim in your response to my initial email query that "sometimes it is better to claim only the safe harbor amount of US$600 for MFJ filer." IRS publication 514, Foreign Tax Credit for Individuals, clearly states on page 41 under the heading Form 1116 "you must file form 1116 to claim Foreign Tax Credit unless you meet one of the following exceptions," followed by the exceptions I have discussed with you in a previous post. Nowhere does it suggest, affirm, recommend or allow the taxpayer the option of claiming only US$600 when the amount of foreign tax paid exceeds that amount. This tactic seems to be what you are advising and claiming to be a foreign tax credit safe harbor.

In addition, if you go to google and type in "safe harbor for payment of income taxes", it correctly describes the conditions that would allow you to underpay without penalty, commonly understood to be a safe harbor, to wit, 100% of last year's taxes due or 90% of current taxes due.

If, however, you google "safe harbor for foreign taxes", you get no such description, to wit, you can enter US$600 as foreign tax paid on your income tax return even if your 1099-DIV line7 shows an amount greater than US$600 in order to avoid filing form 1116. Instead, what google shows is simply the IRS instructions for form 1116.

Therefore, I think there is no such safe harbor provision for foreign taxes paid, as you claim. If you continue to insist that such a "safe harbor"exists, you are going to have to direct me to the IRS form or publication or other tax authority that supports that.

Assertion #2. In your last post to me, you say: "(b) Turbo does not warn you about the safe harbor, because it assumes that the taxpayer knows and needs to choose the amount of Credit/Deduction. " This (b) was in response to my comment saying "I find it odd that Turbo Tax does not give filers who have a de minimis amount of foreign taxes paid over $600 the suggestion to not enter the actual amount but only the $600 amount to avoid filing form 1116."

TurboTax has no basis to assume that the taxpayer knows about the so-called "safe harbor." Also, if my memory serves correctly, Turbo Tax gives the taxpayer options in several different circumstances, for example, as to whether to take the standard deduction or to itemize. If you elect to fill in the Schedule A worksheet, it will calculate your tax based on which is more favorable. Another example is the foreign tax credit worksheet itself, where it gives you the option of whether to claim the credit or take the credit as a deduction.

Therefore, if this foreign tax credit safe harbor exists as you define it, I can think of no reason why that could not be one of your options in the foreign tax credit worksheet regardless of what you say in (b). I thought the whole point of Turbo Tax was to allow the taxpayer to pay the least amount of taxes legally required.

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

pk — Wed, 16 Apr 2025 17:07:31 GMT

@11486

Page 18 of Pub 514 ( on the subject of whether the safe harbor amount exists)

Exemption from foreign tax credit limit.

You will not be subject to this limit and will be able to claim the credit without using Form 1116 if the following requirements are met.

Your only foreign source gross income for the tax year is passive category income. Passive category income is defined later under Separate Limit Income. However, for purposes of this rule, high-taxed income and export financing interest are also passive category income.
Your qualified foreign taxes for the tax year are not more than $300 ($600 if married filing a joint return).
All of your gross foreign income and the foreign taxes are reported to you on a payee statement (such as a Form 1099-DIV or 1099-INT).
You elect this procedure for the tax year.

If you make this election, you cannot carry back or carry over any unused foreign tax to or from this tax year.

This election exempts you only from the limit figured on Form 1116 and not from the other requirements described in this publication. For example, the election does not exempt you from the requirements discussed earlier under What Foreign Taxes Qualify for the Credit..

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

11486 — Wed, 16 Apr 2025 21:14:38 GMT

PK - How you are now defining the “safe harbor” for the foreign tax credit is like saying the standard deduction is the “safe harbor” for deductions. Nobody does that.

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

user17598634558 — Tue, 07 Oct 2025 19:05:21 GMT

It states, you can take the credit only if all the requirements are met. One of the requirements is: " Your qualified foreign taxes for the tax year are not more than $300 ($600 if married filing a joint return).". It doesn't say "Your qualified foreign taxes for the tax year you want to claim are not more than $300($600 if mfj)". I take this to mean, if you have paid foreign taxes more than the $300(or $600 for mfj), you are not eligible to take the simplified credit, but instead you must file form 1116". Is that not correct?

Google AI response:

No, if your total creditable foreign taxes are more than $600 ($300 if single), you cannot choose to include less than the full amount to qualify for the simplified foreign tax credit

. The $600 threshold applies to the total foreign taxes paid, not the amount of credit you want to claim.

Here is an overview of why this isn't an option:

The requirement is based on total foreign taxes paid. If you are married filing jointly and your total qualified foreign taxes paid for passive income (like interest and dividends reported on a Form 1099) exceed $600, you are legally required to file Form 1116, Foreign Tax Credit, to claim any credit.
Forgoing the credit is an option, but underpayment isn't. You can choose to not claim the foreign tax credit at all and instead take the foreign taxes as an itemized deduction on Schedule A. However, you cannot claim a credit for only a portion of your total qualified foreign taxes to stay below the Form 1116 filing threshold.
Losing the carryover benefit. The primary advantage of the simplified method (claiming the credit without Form 1116) is its simplicity. But if you are required to use Form 1116 because your taxes exceed the threshold, you may be able to carry forward any unused credit to future tax years. By purposefully underreporting your foreign taxes to stay under the $600 limit, you would forfeit the ability to carry over the excess credits.
Tax software may prevent it. Many tax software programs will not allow you to underreport the amount of foreign taxes paid. If the total on your information statements (like a Form 1099-DIV) is over the limit, the program will force you to complete Form 1116 to claim any credit.

Your options if you paid over $600 in foreign taxes

File Form 1116 to claim the credit. This is generally the best option for most taxpayers, as it allows you to get a dollar-for-dollar reduction of your U.S. tax liability. If your credit is limited, you can carry the excess forward to future tax years.
Take an itemized deduction. If you do not want to use Form 1116, you can choose to deduct your foreign taxes as an itemized deduction on Schedule A. For most people, a credit is worth more than a deduction, as it reduces your tax bill directly rather than just reducing your taxable income.

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

pk — Tue, 07 Oct 2025 19:54:24 GMT

@user17598634558 whereas your statements are correct but I take solace in :

(a) you must recognize all incomes in toto i.e. you have zero choice in this matter.

(b) there is nothing in the code ( despite AI comments ) that says you are required to recognize each and every deduction -- i.e. all deductions are disallowed unless specifically allowed by code. By extension there is nothing that says you must recognize the full quantum of foreign taxes paid. Clearly you cannot recognize more than paid ( perjury jurat ) but nothing prevents you from recognizing less ( perjury is still valid , because you indeed paid that lesser amount, you are just choosing not to recognize the rest). Is the IRS going to chase you for not recognizing all the Foreign Taxes Paid ? That makes no sense --yes ?

Is there more I can do for you ?

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

user5921485 — Mon, 24 Nov 2025 19:51:38 GMT

Thanks for the help.

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

user5921485 — Mon, 24 Nov 2025 19:53:48 GMT

Thank you!

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

NCperson — Mon, 24 Nov 2025 23:13:35 GMT

@pk I skimmed this thread. While it may be true that you don't have to take a tax credit that is afforded to you (and so in this instance stop taking the credit at $300/ $600), doesn't one have to assess the unintended consequence of that action?

If TT's math is that only $309 was eligible for the foreign tax credit, then what permits the taxpayer to grab the

entire $600 from the IRS? Certainly that can't be permitted by any safe harbor. I would question (with no basis frankly) that the IRS would permit you to claim less to get a higher tax refund.

Why is this any different than a Sch C self-employed taxpayer not claiming expenses so that the resulting income is higher and the CTC and EITC tax credits are higher. That is not permitted.

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

Mike9241 — Wed, 26 Nov 2025 16:52:08 GMT

@NCperson @pk interesting. Back decades ago, when there were no PC's, internet and you could carry the entire IRC in one hand, there was a court case about a somewhat similar issue. H&W claimed only enough in schedule A real estate taxes to avoid the AMT. The court said too bad you must use the entire amount even though it creates AMT. I don't know if this was appealed. I felt that the court decision was wrong.

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

NCperson — Wed, 26 Nov 2025 17:52:32 GMT

in this instance, the IRS instructions read that you are not required to file form 1116 if

Your total creditable foreign taxes aren't more than $300 ($600 if married filing a joint return).

note the word "are" - if they are above $300 / $600, the mere pencil eraser stroke does not magically make that become no more than $300 / $600

they are what they are and I do not see that the taxpayer has the right to reduce it of their own will.

If they did, any time someone had foreign tax credit above $300 / $600, they would reduce to that level if the math on Form 1116 resulted in something less than $300/ $600, which appeared to be the case for this OP.

I do not believe that is the intent- if it was, why wouldn't the IRS just design the instructions and the form that way?

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

pk — Wed, 26 Nov 2025 18:22:40 GMT

Hello @Mike9241 , yes those were the days when pub 17 was only a few pages and easy to digest. While I am not familiar with the case that you mention, I would suggest that the decision was based on " a taxpayer cannot take any action/steps/claims if it were ONLY with the purpose of avoiding a tax " -- in this case avoiding AMT.

My contention that you can choose to claim a reduced amount of Foreign Tax are based on :

(1) there is nothing in the code that says you have to recognize any Foreign Taxes paid -- thus it assumes that the taxpayer would do everything legal to reduce the tax burden. The tax treaties themselves generally provide a path to reduce double taxation burden by requiring the contracting states to provide tax relief through foreign tax credit ( full amount paid) and US chooses to recognize the full amount CLAIMED but allows amount limited to lesser of amount claimed/paid and allocated US tax on the same doubly taxed foreign source income. But there is nothing that says a taxpayer must recognize the tax treaty or claim FTC

(2) the code actually uses " if taxpayer chooses..." regarding claiming Foreign Taxes paid

" 26 USC 901 --

"(a)
Allowance of credit
If the taxpayer chooses to have the benefits of this subpart, the tax imposed by this chapter shall"

(3) it cautions the taxpayer that by choosing to use the "simplified / safeharbor" amount of US$300 per filer, taxpayer cannot carryback/forward -- suggesting that the writers of the code did envisage that some taxpayers may claim an amount less than actual paid of Foreign Taxes and so wanted to cutoff the "double dipping"

(4) this is not a way to reduce tax liability i.e. this is not solely for purpose "avoidance" of taxation.

(5) To @NCperson , I don't know how to answer your point about increasing net income on schedule-C and thereby qualifying for "other / income based " credits. But for my small brain, it seems that IRS / code cannot force a filer to recognize expenses against an income even if that means credits ( non-refundable or otherwise) while paying higher income tax and SECA taxes. I am not very familiar with the language of the relevant code sections. My general sense is that while one has to recognize all income ( it is a must function), only specific deductions are allowed ( and therefore it is a "may" function ).

I am, by no means, asking a user to use this mechanism to bypass the form 1116 limitations ( and giving up any carry over benefits ) but offering a possibility. The choice and the results belong to the individual user.

regards

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

pk — Wed, 26 Nov 2025 18:27:54 GMT

@NCperson , generally agreeing with you in some aspects -- but note that 1116 recognizes the full amount claimed and only limits the current year allowable amount to the lesser of US tax ( allocated) and Foreign Tax claimed.

The 300 per filer allows the full amount claimed ( upto 300 ) but allows no carry over. And of course this is for specific category of income only.

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

NCperson — Thu, 27 Nov 2025 11:25:26 GMT

@pk maybe I do not understand the point (and admit to being anal about it at this point),

The IRC states:

"(B) the amount of the creditable foreign taxes paid or accrued by the individual during the taxable year does not exceed $300 ($600 in the case of a joint return)"

How can a taxpayer arbitrarily change what their mutual fund or ETF may have PAID in foreign taxes! it was already paid or accured on the taxpayer's behalf! It's on the broker statement! What is PAID is out of the control of the taxpayer. While I can see that a taxpayer can arbitrarily change the credit (to something lower than it otherwise would be and that is after completing form 1116 and not before), I can not see that a taxpayer can arbitrarily change what was PAID.

the IRC doesn't mention the foreign tax credit; it mentions the foreign taxes paid. Aren't those different things? What I paid may or may not be credited back to me, depending on the math on form 11116, which I do not have to complete if the foreign taxes PAID is less than $300.

While I note your comment that the code doesn't require the taxpayer to take the credit, you would not know what that credit is until Form 1116 is completed. There is no credit determined without that form. The $300 / $600 just means if your taxes paid is less than these limits you are not required to complete form 1116 to determine what the credit is; just use the taxes paid and be done with it!

Further all the language about carryforward and carry back just means that if I had a carry forward item from last year, and choose not to complete form 1116 (because the taxes paid was under $300), I can't take advantage of the carryforward; if I have carryforward that I want to take advantage of but my foreign taxes paid is under $300, I need to complete form 1116 to do so.

thoughts?

Re: Foreign Tax Credit - Glitch in Program Calculation of Amount of Foreign Tax Credit?

11486 — Wed, 03 Dec 2025 19:55:10 GMT

I am the originator of this email thread beginning in March 2024. I continue to be amazed and chagrined at pk’s obstinate refusal to concede that you cannot report a lower amount of foreign taxes paid to the irs shown on your 1099 DIV to avoid filing form 1116 and thereby claiming a larger credit than you are legally entitled to. I submitted the following query to safari from my apple iPad with the response provided below:

Does the IRS consider it legal or tax compliant for a taxpayer to report a lower amount of foreign taxes paid than that shown on form 1099-DIV line 7 to avoid having to file form 1116, thereby putatively allowing you to claim a $600 tax credit if married filing jointly even if the reported taxes were more than $600, no questions asked? Further, if form 1116 was filed it very likely could result in a credit less than $600.

No, it is not legal or tax compliant to intentionally underreport the amount of foreign taxes paid to avoid filing Form 1116. Taxpayers are required to report all income and taxes accurately based on the information provided on official statements like Form 1099-DIV.

Key Reasons for Non-Compliance

Accuracy of Reporting: The IRS requires accurate reporting of all tax-related information. Intentionally misstating amounts from a qualified payee statement (like a 1099-DIV) on your tax return is considered an intentional disregard of the rules and regulations, which can lead to penalties.
Threshold Requirement: The exception that allows married couples filing jointly to claim a foreign tax credit of up to $600 without filing Form 1116 is based on the total amount of qualified foreign taxes paid, not the amount a taxpayer chooses to report. If your total foreign taxes paid exceed $600, you are legally required to file Form 1116 to claim any credit.
IRS Matching: The IRS receives copies of all Forms 1099-DIV from financial institutions and matches this information to your tax return. Discrepancies can trigger audits or correspondence from the IRS.
Tax Avoidance vs. Evasion: The IRS distinguishes between tax avoidance (legal means to minimize taxes) and tax evasion (illegal misrepresentation of facts to avoid tax liability). Intentionally underreporting income or taxes falls under the latter.

Correct Options

If your total foreign taxes paid exceed the $600 threshold, you have a couple of compliant options:

File Form 1116: This is the correct procedure to claim the foreign tax credit when your taxes exceed the de minimis limit. This method also allows you to carry forward any unused foreign tax credits to future years.
Take a Deduction: You can choose to take the foreign taxes as an itemized deduction on Schedule A (Form 1040) instead of a credit. You must choose one method for all qualified foreign taxes in a given year. You do not need to file Form 1116 in this case, but you must still report the full amount of tax paid accurately.

So unless pk is a tax law attorney who will agree to represent all who follow his advice pro bono in a tax court when they are flagged by the IRS for tax evasion et al, I sincerely hope anyone aware of this thread disregards his advice and follows IRS instructions regarding the foreign tax credit.