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I live in Israel and sold some stock for $49k in Feb 2018. I had to pay $14k in israeli tax, and only ±$35k made it into my bank. How do I report this tax?
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June 7, 2019
5:20 PM
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Get your taxes done using TurboTax
You still report the $49K capital gain, not the net after taxes. But there is a deduction or credit for foreign taxes paid that should offset some or most of the effect of double taxation.
June 7, 2019
5:20 PM
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Get your taxes done using TurboTax
That's the issue - I just can't find where to insert the "deduction or credit for foreign taxes paid" on TurboTax! Any ideas?
June 7, 2019
5:20 PM
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Get your taxes done using TurboTax
Here's how to enter the foreign tax you paid on the sale of stock in TurboTax Online.
- In the black navigation bar on the left side click Federal. Then click Deductions & Credits at the top.
- Answer questions, if necessary, until you get to the screen that says "Let's check for tax breaks." If that screen is not already expanded, click "Jump to full list."
- Scroll down to Estimates and Other Taxes Paid. If that section is not already expanded, click "Show more" for that section.
- Click the Start (or revisit) button for Foreign Taxes.
Since you probably have other foreign income, when you get to the screen that says "Reporting Foreign Taxes Paid," be sure to click the "special instructions" link and read the special instructions for multiple categories of foreign income.
The income from the sale of stock is in the passive income category.
June 7, 2019
5:20 PM