AMT foreign tax credit

I'm sorry you didn't get an answer to your question as I have never been able to figure out AMTFTC and am curious. Without any other guidance I suggest you get out the trusty form 8801 and work out the numbers. It seems like it will depend on whether the AMTFTC was created on exclusion items or not. You don't have to pay an AMT to get it back, and in fact you can only get it back in a year you don't otherwise owe AMT. Anyway, the only way you will get it back is by completing the 8801. good luck ed

Well, since nobody else answered, I'll give it a go, and maybe make ed happy as well. :-) When you pay AMT in a given year, you may or may not be generating an AMT credit carryforward. Thus, for example, if you are in AMT because of thngs like taxes paid or miscellaneous itemized deductions, you do not generate a credit. If, OTOH, the AMT is generated by "timing difference" type items, like stock options or depreciation, then the AMT attributable to those items becomes an AMT credit to be used in any year when you are NOT in the AMT. The AMT you paid because the FTC was limited to 90% of the Tentative AMT in prior years is definitely an AMT that generates an AMT credit. Thus, any of your AMT that was generated this way (to be calculated using form 8801 and, essentially, using the allowable AMT tax credit BEFORE the

90% limitation as the AMTFTC on the 8801) is available to use as a credit in any future year, without expiration, that your regular tax exceeds your tentative AMT, in order to reduce your tax to that tentative AMT. In affect, you continue to pay your tentative AMT as your tax, even though it is lower than your regular tax, until you use up the credit. Your second question has to do with utilization of an AMTFTC carryover - foreign taxes paid that were not utilized against tax. That carryover is used exactly the same way your regular tax FTC carryover is used - you calculate how much is used to reduce your AMT based on your foreign source income, tax rate, etc. If you are still in the UK, then the odds are that you are accumulating additional FTC carryovers, not using the ones you already have. Until you have foreign source income that is taxed at a higher rate in the US than in the foreign country you won't use up your FTC carryovers.

-- Bruce E. Cobern, CPA mailto: snipped-for-privacy@pipeline.com

Thanks, Bruce, that helps.

ed

Thanks Bruce and Ed. That's very helpful. I've always thought that AMTFTC was terribly confusing. The amount of time I spend on it each year is worth many, many times my US tax liability. dg