If your foreign income is over the de minimis threshold ($300/$600, or the $5,000 gross limit you mentioned), you are required to "apportion" expenses. The formula generally looks like this.
- Expense allocated to foreign source = total expenses X (Gross foreign gross income/ total Gross income).
- The investment income is calculated and reported as a total in the total gross income. Total gross income is ALL INCOME reported and used in the calculation of the foreign tax credit as well as the apportioned expense.
@dzimmer10
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