Part I (continued)

Line 2: Deductions

When computing taxable income from foreign sources for the foreign tax credit, subtract foreign income-related expenses, losses, etc., from foreign income.

On line 2, enter deductions that are definitely related to the foreign income such as:

• Expenses incurred to move to a new principal place of work outside the U.S. (only members of the U.S. Armed Forces and intelligence community)
• Qualified tips reported on Part II of Schedule 1A
• Qualified overtime compensation reported on Part III of Schedule 1A

Attach a statement listing the separate expenses included in line 2.