Finance Exam Prep

Ran Chen, EA, CFP®

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Enrolled Agent Exam [Part 1] 88, Foreign Tax Credit Fundamentals

4/13/2026 • 2 min

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: • Why taking a foreign tax credit is almost always more beneficial than taking an itemized deduction for foreign income taxes paid. • How to identify a creditable foreign tax, focusing on income taxes versus non-creditable taxes like VAT or property taxes, a common exam trap. • The foreign tax credit limitation, which restricts the credit to the amount of U.S. tax liability on that same foreign source income. • Why you must calculate the credit separately for different income categories, such as passive and general, preventing the use of excess credits from one category to offset tax in another. • The carryover rule for unused credits, which allows them to be carried back one year and then forward for up to ten years. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or Youtube Channel: https://www.youtube.com/@Open-exam-prep

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