I am eligible to take a foreign tax credit of approximately $1800 for foreign taxes withdrawn during 2007 from my stock brokerage account -- the taxes were paid to Canada on dividends from certain Canadian energy trusts.

It appears that if I take the entire $1800 foreign tax credit, I will then fall into the AMT category. However, if I were only to take, say, HALF of the $1800 credit, I would avoid the AMT category.

Is there any problem with taking only a partial foreign tax credit to avoid AMT?

Thanks.

Dave
Philadelphia, Pa

None that I know of.

However, unused foreign tax credits carry over to future years, so by NOT claiming the full tax credit, you may be denying yourself a future credit.

Further, whenever the AMT comes into effect, an AMT credit also accrues to be taken in future years when AMT does NOT come into play.