Foreign Tax Credits for Individuals: Form 1116 Changes, Final and Proposed Regulations

GILTI High-Tax Exception, Limitations and Calculations, Income Baskets, Carryovers

Recording of a 110-minute CPE webinar with Q&A

Conducted on Thursday, December 10, 2020

Recorded event now available

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Course Materials

This course will provide a practical guide to completing Form 1116 to claim foreign tax credits (FTCs) in the aftermath of recent law changes to the Section 901 credit regime. The panel will outline which foreign taxes are eligible for foreign income tax credits after GILTI, discuss strategies for determining the optimal treatment of creditable foreign taxes, and describe the elections available for taxpayers with foreign income and taxes.


Recent legislation has made significant and far-reaching changes to taxpayers' ability to claim FTCs under Section 901. The "basket" classifications of foreign-based income have led to heightened complexity in the calculations and reporting required to claim the FTC on Form 1116.

U.S. taxpayers are entitled under Section 901 to claim FTCs for certain foreign income taxes, whether paid or deemed paid. However, the foreign tax credit rules are involved, the carryback and carryover periods are limited, and the availability of the credits is limited by the category or "basket" of income and by the ratio of foreign-source income to worldwide income.

In late 2019, the Treasury finalized proposed regulations (T.D. 9882) and issued new proposed regulations (REG-105495-19). Then in July 2020, Treasury issued final (T.D. 9902) and proposed regulations concerning GILTI. The clarifications in the 2019 final regulations include the mechanics of calculating the Section 904 deduction limitation and two new limitation buckets.

The 2019 proposed regulations address the allocation and apportionment of creditable foreign taxes and other expenses, while the awaited GILTI regulations include guidance on the high-tax exception. Wading through and understanding these complex updates is challenging for tax professionals.

Listen as our expert panel provides a comprehensive guide to calculating FTCs and completing Form 1116. The panel will outline which foreign taxes are eligible for Section 901 FTC and discuss the recent changes to Form 1116.



  1. Section 901 creditable foreign taxes
  2. Proposed and final regulations
  3. Sourcing rules and grouping of income into baskets
  4. Income limitations
  5. Documentation and substantiation requirements and challenges
  6. Calculating credits and carryovers
  7. Preparing Form 1116


The panel will discuss these and other important aspects of FTC calculations:

  • Identifying creditable foreign taxes
  • Basket groupings, foreign sourcing rules, and new income baskets
  • Impact of GILTI on tax calculations
  • Interest and other expense allocation
  • Strategies for using up foreign tax credit carryovers
  • Recently issued final and proposed regulations impacting FTCs


Dougherty, Alison
Alison N. Dougherty, J.D., LL.M., CPA


Ms. Dougherty specializes in U.S. international tax reporting, compliance, consulting, planning, and structuring as a...  |  Read More

Samtoy, John
John Samtoy

Tax Partner
Holthouse Carlin & Van Trigt

Mr. Samtoy’s practice specializes in international tax compliance and consulting services, with a focus on...  |  Read More

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