My LLC is taxed as a partnership and paid foreign tax — who claims the FTC, me or the LLC?

In a partnership, the partnership is not the taxpayer that claims the section 901 credit. It computes and reports the source, basket, deductions, and foreign taxes on Schedules K-2 and K-3, and each partner then uses that information to run their own Form 1116 limitation on their personal return. That is exactly why two partners in the same LLC can reach different ultimate FTC results — the limitation depends on each partner's own income, deductions, and carryovers.

The section 904 limitation is basket-specific and deduction-sensitive. Your K-3 Part II source and category data feed the numerator, while Part III can affect how interest expense and research expenses are apportioned. Some items are even sourced at the partner level — for example, gain on certain personal property is sourced by the partner's residence under section 865, so the K-3 may flag it as partner-determined. Different partners, different facts, different credits.

Watch the foreign branch basket: a domestic partnership does not itself have foreign branch income, but it reports amounts that would be foreign branch income as if partners were US persons, and that share enters your own basket computation. Separately, if you make a section 962 election or have deemed-paid credits under sections 960/962, the operative form shifts from Form 1116 to Form 1118 — that is a separate workstream from the ordinary direct credit.