@Raytam having gone through your post describing the situation, my understanding in the situation/scenario is as follows :
(a) you a US Person ( citizen/GreenCard / Resident for Tax purposes
(b) you owned capital asset -- probably real-estate -- in another country
(c) you disposed of the asset during the tax year ( 2022 ?) and are showing a net profit on Schedule-D
(d) the foreign country / tax authority is now taxed you on the disposal of the asset ( which country? )
(e) you have chosen to take foreign tax credit and therefore filing a form 1116.
If this is correct --
1. for purposes of form 1116 , Schedule-D is not germane -- ignore the figures there for the time being
2. for form 1116, it needs to know what was your foreign income which the foreign tax was imposed; what was the foreign taxes paid ( if there is a refund on this you will then have to file an amended US return for that ).
3. line 1(a) -- this should be your gross income from the disposition -- generally the price of the property
disposed LESS basis i.e. the expenses to acquire the asset. ( note that this should be based on the local laws -- some countries allow depreciation , some allow indexing etc. etc. )
4. line 2 should be all expenses related to the selling/ disposal of the asset --- this amount should be under the law of the land
5. line 7 should therefore be equivalent to your net income from foreign sources for these disposals.
6. Note that all these are expressed in US $ of the day of the activity.
Please see the instructions for form 1116
Does this help ? Is there more I can do for you ?
pk
