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I've got to agree with sync - you're mis-reading things a bit.

If you're going to claim the credit AND the foreign taxes paid are over $300/$600, then you need to file Form 1116 to claim the credit.

On the other hand, if you're going to claim the taxes as a deduction on schedule A, then you wouldn't file form 1116 no matter how large the taxes are.

Since you're doing this for a potential state tax benefit, you will also want to take a close look at your state laws. California, for example, doesn't let you include the deduction for foreign income taxes as a deduction on your state return. So this strategy would not result in a state benefit in CA.

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