Foreign Tax Credit Carryforward Help!

[Cheryl Rein]

Help! I have a client from England who has two foreign tax credit carryforwards, Regular $1742 and AMT $4240, for a total of 5982. He is a citizen and lived here all year (2005). Can he use these carryforwards against US income or does he have to carry them forward until he has foreign income to offset them? If deductible, can I just put them on line 21 Other Income. He only has (in US dollars) Interest Income $68, foreign tax withheld $14, and $54 net. He closed the savings account and will no longer have any foreign income.

I'm not sure I'm filling out Form 1116 right. It seems to not be generating any tax credit at all.

All of his other income is from US sources.

Thank you so much for your help!!!
You can also call me at 407-854-7743.

[Gretel]

I just struggled myself with this credit, first year taken for my client.

The little bit I know is that if you don't have enough tax liability the year you take the credit it will be carried forward and should then appear again on pg. 2 1040. Line 21 is wrong.

I would read the instructions for form 1116.

[Unregistered]

The credits must be carried forward until (in the next 10 years) the client has foreign source income in the relevant basket.

[JG EA]

The relevant basket

Sounds positively poetic.