income from farm land in a foreign country

[rajpbg]

Hi,

I am a resident alien for tax purposes. In the year 2020 I received some income from the farm land that I have in a foreign country. It is the cumulative income since 2016 that I received in 2020 in my bank account. How can I report it on my 1040 tax form. And is this income taxable.

[MaryK4]

You can enter under Rental Property, and be sure to indicate the location is in a Foreign Country.  Yes, it is taxable income- but if you paid tax on it in your country you can get the foreign tax credit or deduction.

See Where do I enter income and expenses from a rental property? and Where do I enter the foreign tax credit.

A U.S. resident alien's income is generally subject to tax in the same manner as a U.S. citizen. If you are a U.S. resident alien, you must report all interest, dividends, wages, or other compensation for services, income from rental property or royalties, and other types of income on your U.S. tax return. You must report these amounts whether they are earned within or outside the United States.

[rajpbg]

Hi,

Thanks for your answer. I have another question related to this topic. I am filing taxes for the state of Michigan and in that it asks for Out-of-State Business income or loss. In turbotax specifically it says, " on your federal return did you report income or losses from business, rental or royal property which you operated entirely out of state?" Since this income from farmland was added in rental property in my federal taxes and was from a foreign country, Should I mention it as yes in my Michigan taxes? Doing so is lowering the taxes that I owe to the state of Michigan and I don't understand why that would be the case. Or does the phrase, "out of state" means states within US only.

[Irene2805]

Yes -- Your rental property is "out-of-state," which means anywhere NOT in Michigan.