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Music Music double-taxation can be a real problem you can potentially be taxed twice on income earned outside the USA Congress recognized this problem and in 1918 enacted the foreign tax credit it was simple at first then they realized what sort of doors they opened to people like me and it got more complex let's cover the basics again a credit is allowed for foreign income taxes paid or accrued taxpayers get a choice each year of claiming a credit or deduction for these taxes the credit is limited to the average part of US tax for the year caused by foreign source net taxable income determining what this part is requires determining foreign source gross income total gross income and allocating and apportioning deductions I'll talk about the allocation and apportionment of deductions in a later lecture and already talked about foreign source gross income the amount of foreign tax eligible for the credit may exceed the amount of the limit for the credit any excess foreign tax credit is


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