# Alternative Minimum Tax - Simplified Election Foreign Tax Credit



## Alltimegreat1

As I've explained on other posts, I'm an American living in Germany with my German wife and son (born in 2015, has German and US citizenship). I've been filing the FEIE the past few years and plan to switch to the FTC this year to claim the child tax credit. I've started my tax return using TaxAct, so far so good. Now it's asking me whether I want to accept or refuse the simplified election for "Alternative Minimum Tax - Simplified Election Foreign Tax Credit." I don't know what to do here, but it seems as though my decision will have irrevocable consequences. Anyone have some advice for me whether to take the simplified election?

From TaxAct.... In the first year that the alternative minimum tax (AMT) foreign tax credit is used the IRS allows an election to be made to use a simplified method of preparing the AMT Form 1116. That method allows Part I of the AMT Form 1116 to be left blank, and the numbers from Part I of the corresponding Form 1116 for the regular income tax are used in Part III of the AMT Form 1116. In general, it is easier to use the simplified election. However, it is impossible to predict which method will have the best tax credit result in any given year. Once the simplified election is made it can only be changed with IRS permission. If the simplified election is not made in the first year of the AMT foreign tax credit, it can only be made with IRS approval. 

Check in the first year to make the simplified election.
Check in the first year to reject the simplified election.


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## BBCWatcher

I guess you would check to see whether it really is easier. You're using tax preparation software, so maybe not. If not, then presumably you'd decline and reserve that option for future tax years.


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