Foreign tax paid last year, additional foreign tax accrued

[velvetmonster]

Yes, this is for US taxes.

This year we paid substantial Canadian tax (the "deemed disposition" exit tax) having emigrated from Canada to the US as dual citizens, and last year we paid substantial Canadian tax that we did not claim on our 1040. In the first case, the tax would be accrued, in the second, it would be paid.

When I try to enter the amounts on the 1116, I have to select either paid or accrued, when actually we have both. Most likely the tax will be carried over, so I'm guessing I could claim this year's tax as foreign tax paid on next year's return, but it's a very big chunk of money so I don't want to get this wrong.

Thank you for any guidance.

[Mike9241]

US tax law foreign tax credit. you must choose to take the FTC either on those paid or those accrued in the same tax year. in other words, you can not take the credit for both types in the same year. 

if you choose paid, then you don't report the accrued amount until the year it's paid.

from form 1116 instructions

 Generally, you can take a foreign tax
credit in the tax year you paid or
accrued the foreign taxes, depending
on your method of accounting. If you
report on the cash basis, you can
choose to take the credit for accrued
taxes by checking the “accrued” box in
Part II. But once you choose to do this,
you must credit foreign taxes in the year
they accrue on all future returns

[velvetmonster]

Thank you! I have been using the accrued method. So for the foreign tax I erroneously did not claim, I will need to file an amended return, correct?