I'm an American ex-pat working in Germany and use TurboTax Home and Business to prepare returns.
I use the Foreign Earned Income Exclusion to avoid income tax on my work salary.
This year I have investment income to report for the first time and anticipate having that in future years. I tried using the Foreign Tax Credit (FTC) to offset the taxes due but no matter what I do, TurboTax still shows I am liable for the Net Investment Income Tax (NIIT--a 3.8% tax on investment income). There is debate online about whether this tax can be offset by the FTC but the most recent court decision is that this tax should be excluded in countries that have comprehensive tax treaties with the US. Germany is one of those countries!
Am I doing something wrong or does TurboTax not allow the NIIT to be offset by the FTC?
(Thanks for any help that can be provided and sorry for the acronym soup).
