US AMT Foreign tax credit issue

Hello! I'd be grateful for help with an AMT issue.

I am a US/UK citizen.  100% of my income is foreign source from a US perspective.

On 6251 Line 28, the instructions say "If your filing status is married filing separately and line 28 is more than $247,450, you must include an additional amount on line 28. If line 28 is $415,050 or more, include an additional $41,900. Otherwise, include 25% of the excess of the amount on line 28 over $247,450.

That applies to me, So I did that.  Imagine hypothetically that the extra amount is $1000.

When I am filling out the AMT Foreign Tax Credit Form (1116), it has me break out my income into categories (General, Passive, and Treaty income), calculate how much of that is foreign source, and apply that as a credit against my AMT.

However, I'm not sure what to do about that $1000 above, since it is missed out when I add up my different categories.

Options:

1) Pro-rata the $1000 across the different categories, and include that as AMT income that is eligible for the credit
2) Don't do that and so I have to pay $1000 in AMT, even though I have zero US sourced income
3) Something else?

I'd be grateful for advice, as it doesn't seem fair that I'd have to pay AMT without taking a foreign tax credit when I have no US income.  However, nobody has ever said that the AMT is fair, so this could be the outcome.

The hypothetical $1,000 is not foreign sourced income. It doesn't go (directly) to 1116AMT.

The calculations from line 28 - 6251, and eventually from line 31 - 6251, do go to the 1116AMT.

Are you using the unique rules for a 1116AMT? They're different from a standard 1116.

If the calculations from 1116AMT, using foreign tax credits, do not cover the amount of tax due on 6251, then that's the fun (consequences) of AMT. Do you have carryover credits from previous years? 

I suspected that might be the case.

I am indeed using a different approach to the 1116AMT, since it is of course against 6251 rather than the 1040.

Sadly, I don't think that carryover tax credits help me, since the problem is that the maximum that I can can already credit already covers everything except for the theoretical $1000.

Feels like double taxation to me, but such is life. 

Thanks for your help.

So, .... it sounds like you're up against the limitation amount from 1116AMT, line 21.

That's why I always have a quiet chuckle when some bright spark makes a post claiming all foreign income can always be offset by foreign tax credits.

For me the issue is just that if the 1000 isn't foreign source, a foreign tax credit doesn't offset it!

Hopefully not a problem, but given the gross amount and filing status, have you checked to make sure any investment portion is not liable for NIIT? It also can not be offset by foreign tax credits.