Foreign Tax Credit Carry Forward Confusion...

Mar 19, 2011 6 Replies
T

In each of 2008, 2009, and 20010 I paid foreign taxes of about $2,000 on dividends. I could not been take the credit because in 2008 I had no income and in 2009 and 2010 I was heavily into AMT. I know I can carry it forward for 10(?) years. Do I have to do anything special to do the carry forward, other than being able to document it when I take it? Do I have to file anything with my returns in 2008, 20009 and 2010 to show the carry forward not being used?



I am beginning to suspect I will never get to take it; I will always be in AMT or have no income. I could carry the 2008 credit back to



2007 when I had income but wasn't in AMT. It is too late to do that now (the limit is 3 years to amend isn't it?), but I amended my 2007 return in late 2008 (but before filing my 2008 return...), so it is less than 3 years on the amended 2007. Does that mean I am still in the 3 years, or is it 3 years from the original filing regardless of amendments?
Vote
Twitter Facebook LinkedIn
A

I have never ever seen a case where the carry forward foreign tax credit ever did get put to use, but that doesn't mean it's not possible.

Vote
Twitter Facebook LinkedIn
J

I've used it. Had a whole bunch of Quebec income one year with a big slug of taxes, most of which got carried forward. More recently I've had other foreign income with no tax paid, so I've been whittling it down.

R's, John

Vote
Twitter Facebook LinkedIn
T

That is reassuring, but do I have to do anything on the tax returns on which I couldn't use it to make sure I can carry it forward? Or do I just have to be able to document the carry forward when I do use it?

Vote
Twitter Facebook LinkedIn
D

It's NOT too late to amend a 2007 timely filed return, but it will be in about 4 weeks. The IRS must receive the amended return before the period of limitations closes (and certainly to make certain there's no dispute over timely receipt).

Vote
Twitter Facebook LinkedIn
R

I thought the foreign tax credit was allowed under AMT. They have a special line for it last time I looked at form 6251.

Vote
Twitter Facebook LinkedIn
T

Okay, but what do you have to do to carry it forward? Do you have to do anything on your return to show you are carrying it forward, or just in the year that you use it?

Vote
Twitter Facebook LinkedIn

Join the Discussion

Have something to add? Share your thoughts — no account required.

Didn't find your answer?

Ask the community — no account required