Yes, this is what I was hoping to do. Seems like a reasonable tactic to me and from your answer, it sounds like it might be a grey area.The dividend income would count as foreign income, but there would be no US tax associated with it. You could try to lump this with other taxable US income ans its tax.
Sorry about that. Unfortunately, the treaty explanation made my head spin. Thank you so much for your guidance. This conversation has really helped me to realize how little I actually know about the complexities of my situation.If you look at the treaty expalnation you will probably see that dividend credits have a floor and not a ceiling, but I would prefer if you research this yourself, this thread is getting a little too specific to you, with little benefit to myself or others.
Yes, this was a rude awakening when I read about the stacking rule changes. Actually, it was this change that caused me to reach out to you for more information of the 1116. Gotta love the fact this tax increase on US expats was rammed through congress in a bill called the "Tax Increase Prevention and Reconciliation Act". No notice. No debate. Retroactive to January 1, 2006. Good grief. It's only a matter of time before they start simply confiscating assets.By the way, thanks for pointing out the anti-stacking provisions tah thave recently been passed... Although most should have switched to 1116 to get the child tax credit, now they will have little choice but to become 1116 experts.
The stacking changes will be bad enough for USC's currently in Canada with lots of extra paperwork and perhaps some extra tax. It will be a nightmare for those USCs that work in low-tax jurisdictions in Asia or the Middle East. It could also get very ugly in Canada if Harper is able to reduce (or allow deferal of cap gains) while the 15% long-term US rates could go back up in 2011 (or sooner). This is a major tax grab on US expats that is likely to get worse. The Republicans and GWB have been so good to us.
-Bruce
