Every year I have $1,000 in foreign taxes on $5,000 of foreign income. I have little other income and large deductions, so haven't paid any taxes the last couple years; and haven't gotten any credits. I hope to have enough income to pay taxes in a year or two and might use the credits then.
The way I read 1116, I can carry the for foreign taxes forward 10 years, but not the foreign income; so it would very quickly get to the point where there was no point to carrying them forward because in any year I might actually pay enough taxes to use the credit, I wouldn't have enough foreign income to support them. (5 years hence, I would have $5,000 in foreign taxes (with carry forward), but only $5,000 in income, so I wouldn't get much) Is that correct, or am I missing something.
I did have enough income in 2007 to carry the credits from 2008 back and get benefit from them. The problem is that I already amended my
2007 return (my previous accountant made a bunch of serious mistakes) before I did my 2008 return. My new account doubts it is cost effective to do it again. Is that more to it than filing a revised 1040 an a revised 1116, and getting a $1,000 refund? That shouldn't be expensive. His first amended return was 4" thick, but this amendment is rather simpler. Am I underestimating the challenge? Can you amend a 2007 return twice?