An individual with $300 or less of creditable foreign taxes ($600 if married filing jointly) is exempt from the overall FTC limitation
, provided that person has no foreign source income other than qualified passive income [IRC section 904(j)].
Thus, such income is included in the overall FTC limitation
; any taxes on it are deemed related to general limitation income under the tax allocation rules.
Although Congress has rejected the enactment of one overall FTC limitation
, it has generally restricted the separate FTC limitations to classes of income that were "movable."(17) Because the source of royalty income depends upon the country in which the use of (or right to use) the intangible arises, the source is not "movable" in the same sense that other income may be.(18)