@DaveF1006
Thank you very much. I still have questions:
1. Is the sale of inherited real estate in a foreign country considered "foreign source income" or is it US source income?
2. Assuming answer is yes. For 1099-INT and 1099-DIV, there are fields available to indicate foreign taxes paid and this information transfers automatically into 1116. However, for the 1099-S (foreign equivalent), there is no field available for foreign taxes paid. It is easy to report the sale details (and loss or gain) in the Investments section which populates 8949 in a matter of seconds. When going to Deductions and Credits section and starting the Foreign Tax interview, I see there are two pre-populated columns: RIC and xxx Country. The xxx Country is where the 1099-INT is from, and RIC is due to the 1099-DIV. Please guide me step by step how to go through the interview for the sale of the inherited real estate. It is also in xxx Country. Please provide an answer that is good irrespective of whether it is a gain or a loss - let's assume for this question I want to pursue the credit option, not the deduction. Please assume the following numbers:
Cost Basis: $p
Sale Proceeds: $q
Selling Expenses: $r
Foreign Tax Withheld: $s
Date of death: June 30, 2024
Date of sale: July 31, 2025
Please also note that the inherited property sale is considered Long Term Gain (or Loss), so the US taxation for it is favorable compared to 1099-INT taxes.
Thanks so much once again.
