Excess credits may be used to reduce US tax liability if carried over to a year with foreign source income that has not been taxed by a foreign country or the taxed at a lower rate in the foreign country. Generating foreign source income within the carryforward period may be useful after returning to live in the US. Some possible for utilizing Foreign tax credits are:
- Taxable pension and profit-sharing distributions attributable to employer contributions while services were performed abroad.
- Stock option income atrributable to foreign service compensation
- Business trips abroad, either before or after moving to the location of the international assignment. Income would be attributed to workdays abroad, considered Foreign Source income and probably not taxed in a foreign country.
Not a great bunch of possibilities.