Can I claim foreign tax credit when I am still expecting a tax refund of paid foreign taxes?

[rosevie]

I do not yet know the exact amount of the refund. Is it advisable to deduct an estimated refund from the taxes that I report as having paid for foreign tax credits?

[Vanessa]

You can, but you will need to include the refund in your income for next year. 

 Therefore, it may be easier to just not claim it on this year's return.

[rosevie]

Thanks a lot, I hadn't thought it would be an option to report as income next year! I just thought I would have to file an amended 2018 return in any case with an corrected amount of paid taxes.

[RobertG]

The only real way to account for a foreign income tax refund related to prior year returns would be to go back and amend these prior returns.

Go back to your prior years and recalculate your foreign tax credit with the amounts reduced related to these foreign tax refund payments. If the only change is a change in the foreign tax credit carry forward amount, then do not file any amended tax returns but recalculation the foreign tax credit carryovers for the current tax year.

If your tax liability changes due to this reducing in available foreign tax credits in those years, then you will need to file amended tax returns and the reason for amending would be "refund of foreign taxes claimed as foreign tax credits".

Nowhere does it say you can report foreign tax refunds in the year received.

Instructions for Form 1116 state:
You can't take a credit for the following foreign taxes.
1. Taxes paid to a foreign country
that you don't legally owe, including
amounts eligible for refund by the
foreign country. I

[rosevie]

@TurboTaxRobertG: Thank you for clarification! The amended return in my case would only reduce the carry forward amount. That means I would not even have to file an amended return, right? Many thanks!!