The U.S. IRS has released an international practice unit on FTC Limitation and Computation. The general overview of the practice unit is provided as follows:
United States (U.S.) citizens and resident aliens are subject to tax on worldwide taxable income (WWTI), which includes both U.S. source taxable income (USTI) and foreign source taxable income (FSTI). When a foreign jurisdiction also taxes FSTI, the U.S. provides a foreign tax credit (FTC) to relieve this double taxation. This credit i…