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Old 10.11.2018, 17:15
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Using Foreign Tax Credit Carryfoward after return to US.

I am a US citizen returning to the US in 2019 after 30 years working in Switzerland. I have large US foreign tax credit carryovers I accumulated over the years. I WILL CONTINUE TO RECEIVE MY SWISS PRIVATE PENSION WHEN I RETURN TO THE US. I have read some posts that say you cannot utilize the credits unless you have taxes in Switzerland. BUT, after a little research it appears you can utilize your credits as long as you have foreign (Swiss) income irrespective of whether you pay the swiss tax. Does anybody have experience using the credits to offset swiss source income after return to the US?
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Old 10.11.2018, 19:01
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Re: Using Foreign Tax Credit Carryfoward after return to US.

Thanks. I just came across the same site after much searching. This is one of the few sites I have seen that says you only need FOREIGN INCOME, and not, FOREIGN TAXES PAID. That is a big distinction. I remember seeing other posts here that said it is un-usable (the credits) after return to the US because you no longer pay taxes in CH. I very much hope you are right.
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Old 10.11.2018, 22:16
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Re: Using Foreign Tax Credit Carryfoward after return to US.

Hi OP, I found this site very useful:

https://www.artiopartners.com/blog/f...expats-abroad/

Hope this helps to clarify!

Best of luck to you...
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Old 11.11.2018, 10:11
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Re: Using Foreign Tax Credit Carryfoward after return to US.

This second article contradicts the first as it states:

"An individual who has worked abroad for eight years in a country with high income tax rates for example would have built up a large foreign tax credit if claimed from being carried forward. Once that individual returns to the US they will file a Form 1116 for the return year. If not used, that excess foreign tax credit will expire after being carried over for ten years. The only way of being able to use that up before it expired would be to take another job overseas in a country where the income taxes are considerably lower than in the US."

The KPMG article is the only one I have seen that states you can use untaxed foreign source pension to use up the credits. So, it is still not clear to me and I haven't been able to find the answer in IRS documents.
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Old 11.11.2018, 11:23
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Re: Using Foreign Tax Credit Carryfoward after return to US.

I am retired so it is too late to start contributing to an IRA. Likewise, all my stock options have expired, many worthless. My only hope to use the credits is if I can if I can use my second pillar private pension which will be untaxed in Switzerland. The article mentions you can use stock options earned abroad but does not mention pensions. Only the KMBG article mentions foreign pension as an option...no other source I can find.
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