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Foreign Tax Credit Question

CUSO
Level 3

Hello,

I have a client who was an expat and has accrued a massive tax credit to carryforward.  I do not specialize in foreign tax credits and was wondering if anyone knows how he can use his accrued tax credit to offset his ordinary income taxes?  Thank you!

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2 Comments 2
sjrcpa
Level 15

He probably can't. It can only be used against foreign income.

Since a lot of countries have higher tax rates than the US, a lot of people end up with foreign tax credit carryovers they can't use.

The more I know, the more I don't know.
CUSO
Level 3

Thank you for the response.  Do you know if income can be qualified as foreign sourced income if you are an employee working for a domestic company but working abroad for a short period of time?

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