Solved: Can you take a foreign tax credit in 2015 and still take a foreign income exclusion in 2016? Or is there a precendent that you cannot reverse (once tax credit always?)
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ComplexT
New Member

Can you take a foreign tax credit in 2015 and still take a foreign income exclusion in 2016? Or is there a precendent that you cannot reverse (once tax credit always?)

In 2014 we took a foreign income tax exclusion, in 2015 we took the foreign income tax credit.  This year in 2016, I think it is better for us to take the foreign income exclusion again but is there a reason we cannot?  This section of TTax is always a bit confusing.  My husband meets the criteria of physical presence, was not in US more than 15 days total in 2016.
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DDollar
New Member

Can you take a foreign tax credit in 2015 and still take a foreign income exclusion in 2016? Or is there a precendent that you cannot reverse (once tax credit always?)

No, taking a foreign tax credit or exclusion in one year does not set a precedent so that you cannot claim the other in a subsequent year.  If it is more beneficial for you to take the Foreign Tax Exclusion for 2016 you can do so if you qualify. 

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DDollar
New Member

Can you take a foreign tax credit in 2015 and still take a foreign income exclusion in 2016? Or is there a precendent that you cannot reverse (once tax credit always?)

No, taking a foreign tax credit or exclusion in one year does not set a precedent so that you cannot claim the other in a subsequent year.  If it is more beneficial for you to take the Foreign Tax Exclusion for 2016 you can do so if you qualify. 

View solution in original post

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