Foreign tax credits for immigrants create phantom income and AMT liability traps

US tax residents who pay taxes to foreign governments on foreign-source income can claim Foreign Tax Credits (FTC) under IRC Section 901 to avoid double taxation. But the FTC calculation requires separating income into complex 'baskets' (general, passive, GILTI, etc.) and is subject to limitation based on the ratio of foreign-source to worldwide income. So what? If an immigrant has a mix of US and foreign income (common for those with overseas rental property, deferred compensation, or foreign pension distributions), the FTC limitation can prevent them from fully crediting foreign taxes paid. So what? They end up paying tax to both the US and the foreign country on the same income, with no relief -- the exact double taxation the credit is supposed to prevent. So what? The uncredited foreign taxes can be carried forward, but if the immigrant's income profile doesn't change, those credits expire unused after 10 years. So what? Additionally, large foreign tax credits can trigger the Alternative Minimum Tax (AMT), where the FTC is recalculated under a different set of rules (IRC Section 59) with tighter limitations, creating a surprise tax liability of $5,000-20,000 that the taxpayer didn't anticipate. So what? Immigrants end up paying more total tax than if they lived in only one country, which is the opposite of what tax treaties and credits are supposed to achieve, effectively penalizing global mobility. The problem persists because the FTC basket system was designed for multinational corporations, not individuals. Congress has never simplified it for individual filers. Form 1116 (Foreign Tax Credit) has 4 pages of instructions referencing 20+ other IRC sections, and tax software handles it poorly -- even TurboTax Premier frequently computes it incorrectly according to CPA forums.