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

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

Note: CLE credit is not offered on this program

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

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Conducted on Thursday, May 19, 2022

Recorded event now available

or call 1-800-926-7926

This course will provide a practical guide to completing Form 1116 to claim foreign tax credits (FTCs) in the aftermath of recently released regulations and considering the addition of the new Schedules K-2 and K3 for pass-through entities. 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 December 2021, Treasury finalized regulations (T.D. 9959) on the FTC and foreign-derived intangible income (FDII). These were generally similar to the proposed regulations with a few notable differences. In September 2020, T.D. 9922 was issued covering the FTC and expense allocations and even earlier, but still recently (July 2020), T.D. 9902 on the GILTI high tax exclusion (HTE) was published. Wading through and understanding these complex legislative changes 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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