Foreign Tax Credit

[Anovice]

In 2020, I sold a property overseas and had a $9,788 long-term capital gain. I paid a $3,600 capital gain tax in the country the property was sold. I see that the tax preparer put the long-term capital gain in my 2020 tax return on Form 8949. On Form 1116, I see in Part II "Foreign Taxes Paid or Accrued" the $3,600. Going all the way to the bottom of page 2 on Form 1116, based on my tax return, the "maximum amount of credit" that I was able to use was $313. I do not see anywhere on Form 1116 to carry over unused foreign tax credit and there is no Form 1116 (Foreign Tax Credit) in my 2021 and 2022 tax returns. My question is, what happened to the remaining $3,287 that I paid in foreign taxes?

[student]

This may be useful. https://www.greenbacktaxservices.com/kn ... dit-guide/

[nalor511]

Form 1116 sch B tracks carryover, but was not created until 2021. So for 2020 you track the carryover yourself, and for 2021 you amend with a 1116 sch B

[Anovice]

Form 1116 sch B tracks carryover, but was not created until 2021. So for 2020 you track the carryover yourself, and for 2021 you amend with a 1116 sch B

Thank you for your post.

From what I posted, does it appear that I have $3,287 foreign tax credit remaining? In other words, is $3,287 the amount to carryover? I have a friend preparing my taxes and at the moment, I do not know if he filed my 2022 taxes. If he has filed my 2022 taxes, does he amend my 2021 and 2022 tax returns with Schedule B (Form 1116)? If he has not filed my 2022 taxes, he amends my 2021 taxes and does he use Form 1116 for 2022? Lastly, we know that my 2021 taxes were filed and assuming that my 2022 taxes were also filed, is it acceptable not to amend my 2021 and 2022 taxes and pick up with my 2023 taxes?

[nalor511]

Form 1116 sch B tracks carryover, but was not created until 2021. So for 2020 you track the carryover yourself, and for 2021 you amend with a 1116 sch B

Thank you for your post.

From what I posted, does it appear that I have $3,287 foreign tax credit remaining? In other words, is $3,287 the amount to carryover? I have a friend preparing my taxes and at the moment, I do not know if he filed my 2022 taxes. If he has filed my 2022 taxes, does he amend my 2021 and 2022 tax returns with Schedule B (Form 1116)? If he has not filed my 2022 taxes, he amends my 2021 taxes and does he use Form 1116 for 2022? Lastly, we know that my 2021 taxes were filed and assuming that my 2022 taxes were also filed, is it acceptable not to amend my 2021 and 2022 taxes and pick up with my 2023 taxes?

It seems that way, but without seeing your taxes it's not definitive. You need to file 1116 for any year you carry, and 1116.sch.b for any year 2021 and later. So you're amending 2021 and 2022 to add 1116+1116.sch.B for both years.

Side note, you should carry BACK this credit to 2019 before carrying FORWARD. The rule is back 1 year, then forward up to 10 years


https://www.greenbacktaxservices.com/kn ... carryover/

[Anovice]

Form 1116 sch B tracks carryover, but was not created until 2021. So for 2020 you track the carryover yourself, and for 2021 you amend with a 1116 sch B

Thank you for your post.

From what I posted, does it appear that I have $3,287 foreign tax credit remaining? In other words, is $3,287 the amount to carryover? I have a friend preparing my taxes and at the moment, I do not know if he filed my 2022 taxes. If he has filed my 2022 taxes, does he amend my 2021 and 2022 tax returns with Schedule B (Form 1116)? If he has not filed my 2022 taxes, he amends my 2021 taxes and does he use Form 1116 for 2022? Lastly, we know that my 2021 taxes were filed and assuming that my 2022 taxes were also filed, is it acceptable not to amend my 2021 and 2022 taxes and pick up with my 2023 taxes?

It seems that way, but without seeing your taxes it's not definitive. You need to file 1116 for any year you carry, and 1116.sch.b for any year 2021 and later. So you're amending 2021 and 2022 to add 1116+1116.sch.B for both years.

Side note, you should carry BACK this credit to 2019 before carrying FORWARD. The rule is back 1 year, then forward up to 10 years


https://www.greenbacktaxservices.com/kn ... carryover/

If he has not filed my 2022 taxes, is it correct that he needs to FIRST amend my 2021 taxes first with 1116 Schedule B? If he is to carry back this credit to 2019 before carrying forward, doesn't that mean that my 2019 tax return needs to be amended as well with Form 1116 Schedule B? If so, is that "rule" criticle?

Thank you.

[nalor511]

Form 1116 sch B tracks carryover, but was not created until 2021. So for 2020 you track the carryover yourself, and for 2021 you amend with a 1116 sch B

Thank you for your post.

From what I posted, does it appear that I have $3,287 foreign tax credit remaining? In other words, is $3,287 the amount to carryover? I have a friend preparing my taxes and at the moment, I do not know if he filed my 2022 taxes. If he has filed my 2022 taxes, does he amend my 2021 and 2022 tax returns with Schedule B (Form 1116)? If he has not filed my 2022 taxes, he amends my 2021 taxes and does he use Form 1116 for 2022? Lastly, we know that my 2021 taxes were filed and assuming that my 2022 taxes were also filed, is it acceptable not to amend my 2021 and 2022 taxes and pick up with my 2023 taxes?

It seems that way, but without seeing your taxes it's not definitive. You need to file 1116 for any year you carry, and 1116.sch.b for any year 2021 and later. So you're amending 2021 and 2022 to add 1116+1116.sch.B for both years.

Side note, you should carry BACK this credit to 2019 before carrying FORWARD. The rule is back 1 year, then forward up to 10 years


https://www.greenbacktaxservices.com/kn ... carryover/

If he has not filed my 2022 taxes, is it correct that he needs to FIRST amend my 2021 taxes first with 1116 Schedule B? If he is to carry back this credit to 2019 before carrying forward, doesn't that mean that my 2019 tax return needs to be amended as well with Form 1116 Schedule B? If so, is that "rule" criticle?

Thank you.

1116.sch.b didn't exist until 2021.
Amend first, yes.

[Anovice]

Form 1116 sch B tracks carryover, but was not created until 2021. So for 2020 you track the carryover yourself, and for 2021 you amend with a 1116 sch B

Thank you for your post.

From what I posted, does it appear that I have $3,287 foreign tax credit remaining? In other words, is $3,287 the amount to carryover? I have a friend preparing my taxes and at the moment, I do not know if he filed my 2022 taxes. If he has filed my 2022 taxes, does he amend my 2021 and 2022 tax returns with Schedule B (Form 1116)? If he has not filed my 2022 taxes, he amends my 2021 taxes and does he use Form 1116 for 2022? Lastly, we know that my 2021 taxes were filed and assuming that my 2022 taxes were also filed, is it acceptable not to amend my 2021 and 2022 taxes and pick up with my 2023 taxes?

It seems that way, but without seeing your taxes it's not definitive. You need to file 1116 for any year you carry, and 1116.sch.b for any year 2021 and later. So you're amending 2021 and 2022 to add 1116+1116.sch.B for both years.

Side note, you should carry BACK this credit to 2019 before carrying FORWARD. The rule is back 1 year, then forward up to 10 years


https://www.greenbacktaxservices.com/kn ... carryover/

If he has not filed my 2022 taxes, is it correct that he needs to FIRST amend my 2021 taxes first with 1116 Schedule B? If he is to carry back this credit to 2019 before carrying forward, doesn't that mean that my 2019 tax return needs to be amended as well with Form 1116 Schedule B? If so, is that "rule" criticle?

Thank you.

1116.sch.b didn't exist until 2021.
Amend first, yes.

I am almost there!

Let's assume that my 2022 taxes were not filed, and we are only dealing with 2021. I realize that 1116 schedule B needs to be filed for 2021. Does Form 1116 need to be filed with my amended 2021 taxes as well?

I am not certain that I got the answer on the rule of carrying back this foreign tax credit to 2019 before carrying forward. Is this a must or optional? My relationship is already strained, and I only want to do what is necessary. Also, if my 2019 tax return is amended, then my 2020 will need to be amended too. If at all possible and assuming that my 2022 taxes were not filed, I would highly prefer to only have my 2021 taxes amended. Would this be acceptable?

[nalor511]

Carry back first is the rule. Rules are not optional. You can file 1116 even if it doesn't help you, so, yes I would file it (it has a carry line, which you need populated). It can't hurt you.

[Anovice]

Carry back first is the rule. Rules are not optional. You can file 1116 even if it doesn't help you, so, yes I would file it (it has a carry line, which you need populated). It can't hurt you.

So, that means a 2019, 2020, and 2021 amended return?

[nalor511]

Carry back first is the rule. Rules are not optional. You can file 1116 even if it doesn't help you, so, yes I would file it (it has a carry line, which you need populated). It can't hurt you.

So, that means a 2019, 2020, and 2021 amended return?

If you want to (and can) carry back. If you had no foreign income, carry back won't work. Otherwise just 20/21

[Anovice]

Carry back first is the rule. Rules are not optional. You can file 1116 even if it doesn't help you, so, yes I would file it (it has a carry line, which you need populated). It can't hurt you.

So, that means a 2019, 2020, and 2021 amended return?

If you want to (and can) carry back. If you had no foreign income, carry back won't work. Otherwise just 20/21

I just found out that my 2022 taxes were completed, but not filed. I had no foreign income for 2019, so nothing needs to be done with my 2019 tax return. 2020 tax year was the first year that I filed Form 1116 (property was sold in 2020) and that was done properly. This seems to indicate that all I need to do is amend my 2021 taxes to include Schedule B (Form 1116) and Form 1116, and include Form 1116 in my 2022 taxes. Correct?

[international001]

I didn't know about schd B. Turbo Tax has a handy worksheet 'Foreign Tax Credit Carryovers' that I reference, and takes care of it for the next year.

Why did you have only $313 of credit. Didn't you have any other significant income on 2020?
Do you think you'll have enough allowed credit for 2021 (to cover the $3,287 )?

I always assumed that you can choose where to apply where to apply the remaining credit. 1 year backwards and 10 years forward, but you can choose between those 11 years as you wish. e.g. I had some FTC left on 2020 but I didn't bother filing an amendment for 2019 to simplify my life. Is my assumption correct?

[nalor511]

I didn't know about schd B. Turbo Tax has a handy worksheet 'Foreign Tax Credit Carryovers' that I reference, and takes care of it for the next year.

Why did you have only $313 of credit. Didn't you have any other significant income on 2020?
Do you think you'll have enough allowed credit for 2021 (to cover the $3,287 )?

I always assumed that you can choose where to apply where to apply the remaining credit. 1 year backwards and 10 years forward, but you can choose between those 11 years as you wish. e.g. I had some FTC left on 2020 but I didn't bother filing an amendment for 2019 to simplify my life. Is my assumption correct?

No. You must carry back 1 year, then forward up to 10 years, that's the rule. Whether you follow the rules is always up to you. Pre-2021, you were responsible for tracking your own carryover. 2021-forward, you must file 1116.sch.B to track the carryover.

[international001]

I didn't know about schd B. Turbo Tax has a handy worksheet 'Foreign Tax Credit Carryovers' that I reference, and takes care of it for the next year.

Why did you have only $313 of credit. Didn't you have any other significant income on 2020?
Do you think you'll have enough allowed credit for 2021 (to cover the $3,287 )?

I always assumed that you can choose where to apply where to apply the remaining credit. 1 year backwards and 10 years forward, but you can choose between those 11 years as you wish. e.g. I had some FTC left on 2020 but I didn't bother filing an amendment for 2019 to simplify my life. Is my assumption correct?

No. You must carry back 1 year, then forward up to 10 years, that's the rule. Whether you follow the rules is always up to you. Pre-2021, you were responsible for tracking your own carryover. 2021-forward, you must file 1116.sch.B to track the carryover.

So if I have excess credits one year, I *must* file an amendment for the previous year?
You have any IRS documentation proving that? Any source I read tells me 'you can carry the excess forward or back'

It seems over complicated.
What if I haven't done it and I am not on time to file the amendment?
So let's say I get extra $1000 credits on 2020 and I can use 300. The $700 can be used (because I have enough foreign income) on 2019 and 2022
I have to file an amendment on 2019 and le's say it allows me to use $100 credits
Then I have to file an amendment on 2021 so Sch B reflects that I only have $200 credits left. Or this isn't necessary?
Then I can file 2022 and use the $200 credits left

Is this how it works?

[grabiner]

In 2020, I sold a property overseas and had a $9,788 long-term capital gain. I paid a $3,600 capital gain tax in the country the property was sold. I see that the tax preparer put the long-term capital gain in my 2020 tax return on Form 8949. On Form 1116, I see in Part II "Foreign Taxes Paid or Accrued" the $3,600. Going all the way to the bottom of page 2 on Form 1116, based on my tax return, the "maximum amount of credit" that I was able to use was $313.

That credit seems unusually low. The foreign tax credit is limited to your US tax, times the share of your taxable income which is foreign (with some adjustments). Thus the credit would only be that low if your total US tax was around 3% of your taxable income. If your US tax was, say, 20% of your taxable income, the credit should have been around $2000. (You will almost surely have a carryover, since the foreign country taxed the capital gain at 37%, and your US tax is always less than 37% of your taxable income even in the 37% tax bracket.)

Did your tax preparer mistakenly adjust the capital gain? Since you had less than $20K of foreign capital gains, you shouldn't have needed to adjust the capital gain (multiplying by 15/37 if the US tax rate was 15%, and ignoring completely any amount taxed at 0%) unless you are in the 32% tax bracket, and if you are in that 32% bracket, your tax rate would be much higher.

[nalor511]

I didn't know about schd B. Turbo Tax has a handy worksheet 'Foreign Tax Credit Carryovers' that I reference, and takes care of it for the next year.

Why did you have only $313 of credit. Didn't you have any other significant income on 2020?
Do you think you'll have enough allowed credit for 2021 (to cover the $3,287 )?

I always assumed that you can choose where to apply where to apply the remaining credit. 1 year backwards and 10 years forward, but you can choose between those 11 years as you wish. e.g. I had some FTC left on 2020 but I didn't bother filing an amendment for 2019 to simplify my life. Is my assumption correct?

No. You must carry back 1 year, then forward up to 10 years, that's the rule. Whether you follow the rules is always up to you. Pre-2021, you were responsible for tracking your own carryover. 2021-forward, you must file 1116.sch.B to track the carryover.

So if I have excess credits one year, I *must* file an amendment for the previous year?
You have any IRS documentation proving that? Any source I read tells me 'you can carry the excess forward or back'

It seems over complicated.
What if I haven't done it and I am not on time to file the amendment?
So let's say I get extra $1000 credits on 2020 and I can use 300. The $700 can be used (because I have enough foreign income) on 2019 and 2022
I have to file an amendment on 2019 and le's say it allows me to use $100 credits
Then I have to file an amendment on 2021 so Sch B reflects that I only have $200 credits left. Or this isn't necessary?
Then I can file 2022 and use the $200 credits left

Is this how it works?

https://www.irs.gov/publications/p514#e ... 1000224367

[Anovice]

In 2020, I sold a property overseas and had a $9,788 long-term capital gain. I paid a $3,600 capital gain tax in the country the property was sold. I see that the tax preparer put the long-term capital gain in my 2020 tax return on Form 8949. On Form 1116, I see in Part II "Foreign Taxes Paid or Accrued" the $3,600. Going all the way to the bottom of page 2 on Form 1116, based on my tax return, the "maximum amount of credit" that I was able to use was $313.

That credit seems unusually low. The foreign tax credit is limited to your US tax, times the share of your taxable income which is foreign (with some adjustments). Thus the credit would only be that low if your total US tax was around 3% of your taxable income. If your US tax was, say, 20% of your taxable income, the credit should have been around $2000. (You will almost surely have a carryover, since the foreign country taxed the capital gain at 37%, and your US tax is always less than 37% of your taxable income even in the 37% tax bracket.)

Did your tax preparer mistakenly adjust the capital gain? Since you had less than $20K of foreign capital gains, you shouldn't have needed to adjust the capital gain (multiplying by 15/37 if the US tax rate was 15%, and ignoring completely any amount taxed at 0%) unless you are in the 32% tax bracket, and if you are in that 32% bracket, your tax rate would be much higher.

Thank you for your post.

In 2020, my Total Income and AGI was $54,600. My Taxable Income was $40,800. Line 20 of my Form 1040 (Amount from Schedule 3, line 7) shows $313, which I see on Schedule 3.

In my 2020 tax return, there is a two-page Form 1116. On page 1 Part 1, Taxable Income or Losses From Sources Outside the United States, it shows my $9,788 long-term capital gain on the sale (and a $29 dividend from a mutual fund). On page 1 Part II, Foreign Taxes Paid or Accrued, it shows the $3,600 (Paid). On page 2 Part III, Figuring The Credit, it goes through, well whatever the calculation that his software does (I have no doubt that he never looked at this) and lines 20-24 all show $313. On page 2 Part IV, Summary of Credits From Separate Parts III, lines 33 and 35 also show $313. Based on this, do you think that my remaining credit is $3,287?

Regarding my 2021 tax return, my AGI was $94,000, my total tax was $7,275. Form 1116 was not included in my tax return. My 2022 taxes have been prepared but have not been filed. Since I had zero foreign income in 2019, it appears that there is no need/reason/purpose/ability to go back and file an amended return for 2019. It appears that he needs to amend my 2021 taxes with 1116 Schedule B (Form 1116) and include Form 1116 too because it has a carry line which needs to be populated. Lastly, my 2022 taxes need to be rerun to include Form 1116.

Thoughts?

[grabiner]

In 2020, my Total Income and AGI was $54,600. My Taxable Income was $40,800. Line 20 of my Form 1040 (Amount from Schedule 3, line 7) shows $313, which I see on Schedule 3.

This may explain the low credit. If much of that income was from qualified dividends and long-term gains, your total tax could be very low. (See below where I show that $1741 total tax before credits would give a credit of $313.)

In my 2020 tax return, there is a two-page Form 1116. On page 1 Part 1, Taxable Income or Losses From Sources Outside the United States, it shows my $9,788 long-term capital gain on the sale (and a $29 dividend from a mutual fund). On page 1 Part II, Foreign Taxes Paid or Accrued, it shows the $3,600 (Paid). On page 2 Part III, Figuring The Credit, it goes through, well whatever the calculation that his software does (I have no doubt that he never looked at this) and lines 20-24 all show $313.

Line 20 of Form 1116 should not be $313. Line 20 is the total tax before foreign tax credit. Line 19 should be very close to $9815/54600=.1798. (Line 19 is the percentage of your taxable income that is foreign, which is the same as the percentage of your total income that is foreign if you took the standard deduction and have no adjustments.) If your total tax was $1741 (3.19% of your gross income), that should appear on Line 20, and then the product of Line 19 and Line 20 would be $313, which you enter on Line 21.

On page 2 Part IV, Summary of Credits From Separate Parts III, lines 33 and 35 also show $313. Based on this, do you think that my remaining credit is $3,287?

If the above calculation is correct, then the remaining credit is $3287.

Regarding my 2021 tax return, my AGI was $94,000, my total tax was $7,275. Form 1116 was not included in my tax return. My 2022 taxes have been prepared but have not been filed. Since I had zero foreign income in 2019, it appears that there is no need/reason/purpose/ability to go back and file an amended return for 2019. It appears that he needs to amend my 2021 taxes with 1116 Schedule B (Form 1116) and include Form 1116 too because it has a carry line which needs to be populated. Lastly, my 2022 taxes need to be rerun to include Form 1116.

This looks right. If you had a mutual fund which paid foreign tax and the foreign tax was less than $300, you would not have needed to file Form 1116 to claim the credit in 2021. However, you do need to file Form 1116 to carry over an unused credit from a previous year. (You might not get much benefit from the carryover in 2021, since your total tax was 8% of your total income, and 8% is about the tax that most mutual funds pay on their qualified dividends. You will get more benefit if you have more income.)

[Anovice]

Thank you.

This may explain the low credit. If much of that income was from qualified dividends and long-term gains, your total tax could be very low. (See below where I show that $1741 total tax before credits would give a credit of $313.)

3a Qualified Dividends: $36,600

Line 20 of Form 1116 should not be $313. Line 20 is the total tax before foreign tax credit. Line 19 should be very close to $9815/54600=.1798. (Line 19 is the percentage of your taxable income that is foreign, which is the same as the percentage of your total income that is foreign if you took the standard deduction and have no adjustments.) If your total tax was $1741 (3.19% of your gross income), that should appear on Line 20, and then the product of Line 19 and Line 20 would be $313, which you enter on Line 21

I double checked. Line 20 is in fact $313. Line 19 is 1.0000. On the 1040, line 12 Standard deduction or itemized deductions (from Schedule A) $12,400. Schedule A Itemized Deductions $1,090. Should I let the tax preparer know that line 20 of Form 1116 is incorrect? Will he need to file an amended 2020 tax return?

If the above calculation is correct, then the remaining credit is $3287.

It seems that the calculation on page 2, Part III Figuring the Credit, is not correct, so I guessing that the $313 showing in Part IV Summary of Credits from Separate Parts III can't be correct.

This looks right. If you had a mutual fund which paid foreign tax and the foreign tax was less than $300, you would not have needed to file Form 1116 to claim the credit in 2021. However, you do need to file Form 1116 to carry over an unused credit from a previous year. (You might not get much benefit from the carryover in 2021, since your total tax was 8% of your total income, and 8% is about the tax that most mutual funds pay on their qualified dividends. You will get more benefit if you have more income.)

On my 2021 tax return, Schedule 3, I see a $49 foreign tax credit. Doesn't that mean a $49 foreign tax credit was taken in 2021 without Form 1116? But, since it appears that the tax preparer will need to file an amended 2020 tax return to get the foreign tax credit amount right and a 2021 amended tax return to carry over the unused credit, I guess that he would include the $49 in the 2021 Form 1116. Is this correct?

[grabiner]

Reminder and disclaimer: I am not your tax advisor and thus you cannot treat anything on this forum as tax advice. I am just an investor trying to read and follow the directions on the tax form, and it looks like your tax preparer made a mistake somewhere and should fix it.

Thank you.

This may explain the low credit. If much of that income was from qualified dividends and long-term gains, your total tax could be very low. (See below where I show that $1741 total tax before credits would give a credit of $313.)

3a Qualified Dividends: $36,600

That would make your total tax very low. In fact, if the foreign capital gain was long-term, your tax should have been $120. In 2020, a single taxpayer paid no tax on qualified dividends and long-term capital gains up to $40,000 of taxable income; yours was $40,800 so you would pay 15% tax on the $800. This may have been another mistake by your tax preparer unless you had a premium tax credit repayment (Schedule 2, line 2); any other tax such as self-employment tax is not eligible for the foreign tax credit.

If all your capital gains were short-term, then you would pay 10% tax on $40,800-$36,600=$4200 of ordinary income, which would be $420. If you had some long-term gains, your tax would be somewhere between $120 and $420.

Line 20 of Form 1116 should not be $313. Line 20 is the total tax before foreign tax credit. Line 19 should be very close to $9815/54600=.1798. (Line 19 is the percentage of your taxable income that is foreign, which is the same as the percentage of your total income that is foreign if you took the standard deduction and have no adjustments.) If your total tax was $1741 (3.19% of your gross income), that should appear on Line 20, and then the product of Line 19 and Line 20 would be $313, which you enter on Line 21

I double checked. Line 20 is in fact $313. Line 19 is 1.0000. On the 1040, line 12 Standard deduction or itemized deductions (from Schedule A) $12,400. Schedule A Itemized Deductions $1,090. Should I let the tax preparer know that line 20 of Form 1116 is incorrect? Will he need to file an amended 2020 tax return?

Given the above discussion, Line 20 may be correct, but Line 19 was incorrect. Line 17 is your foreign source taxable income, which should be less than your foreign total income; this is what Form 1116 computes. Line 18 is your taxable income, which you said is $40,800. Line 19 is the ratio of those numbers, which would not be 1.

At this point, you'll have to look at the calculations to see where the error is; either Line 17 or Line 18 is wrong, and that wrong number was computed somewhere else. You said that Line 1 was $9817 (which might be combined over two columns). Line 6 should be subtracted from Line 1, and the difference is on Line 7. Line 7 would be copied to Line 15, and then to Line 17.

This looks right. If you had a mutual fund which paid foreign tax and the foreign tax was less than $300, you would not have needed to file Form 1116 to claim the credit in 2021. However, you do need to file Form 1116 to carry over an unused credit from a previous year. (You might not get much benefit from the carryover in 2021, since your total tax was 8% of your total income, and 8% is about the tax that most mutual funds pay on their qualified dividends. You will get more benefit if you have more income.)

On my 2021 tax return, Schedule 3, I see a $49 foreign tax credit. Doesn't that mean a $49 foreign tax credit was taken in 2021 without Form 1116? But, since it appears that the tax preparer will need to file an amended 2020 tax return to get the foreign tax credit amount right and a 2021 amended tax return to carry over the unused credit, I guess that he would include the $49 in the 2021 Form 1116. Is this correct?

Yes, that is how things would work. You will compute your 2021 foreign tax credit limitation. If that happens to be, say, $60, then you get a $49 credit for the tax paid in 2021, and use $11 of carryover from 2020, carrying the remainder forward to 2022. Conversely, if it happens to be $40, you would get only a $40 credit in 2021, and have a $9 carryover from 2021 to use along with the whole 2020 carryover in 2022.

[international001]

https://www.irs.gov/publications/p514#e ... 1000224367

HEre it's more clear (html sucks)

https://www.irs.gov/pub/irs-pdf/p514.pdf

IT seems you don't have to do an amendment. I had some unused FTC for 2020. I could have considered the carryback if in 2019 I had some excess limit. That's all.

But on 2019 I didn't have to file 1116 (FTC was under $300). So that's why Turbotax didn't allow me to use any more FTC

[international001]

Yes, that is how things would work. You will compute your 2021 foreign tax credit limitation. If that happens to be, say, $60, then you get a $49 credit for the tax paid in 2021, and use $11 of carryover from 2020, carrying the remainder forward to 2022. Conversely, if it happens to be $40, you would get only a $40 credit in 2021, and have a $9 carryover from 2021 to use along with the whole 2020 carryover in 2022.

I have been trying to follow the discussion, and it seems @grabiner messed up the lines at the beginning of his analysis (and he corrected later).
The bigger point he is making is that you have to keep filing 1116 2021 and forward, so perhaps you have a chance to use the credits little by little in the next 10 years.

It wasn't clear to me how much foreign income and foreign tax you had on 2021. But @grabiner is right you are going to neeed US-tax/US-income > 8% if you want to get back all that credit via RICs (i.e. ex-US funds)

I run into this problem, and my strategy right now is:

1) Try to get a year where I have some foreign capital gain w/o foreign taxes. This is usually possible if you sell some stocks in a foreign country for a gain, for instance. It will give you some FTC limit, and since you don't have foreign taxes that year, you can use the carryover of last year. Don't get any foreign capital losses
2) Avoid US capital losses (i.e. the securities on a US broker) for that year, since this could bring down 1)

I learned about the rules 1 and 2 above the hard way.

I have some more details of my strategy here: viewtopic.php?t=343281