I am a US citizen with foreign income and assets. I have a bit of a complex situation and need help with my 2018 Form 1116 (Foreign Tax Credit)
First, I have multiple sources of income, but they are all passive, as follows:
- Rental Income from Israel
- Capital Gains/Losses on real estate sold.
- Small amount of Foreign income/tax paid on Dividends from brokerage accounts.
So, my first question: Since all the above is Passive Income, can I simply add it all up and provide a single form 1116? (more specifically, should Capital gain/loss from the sales of the property be included on Form 1116?
Second, the questions on form 1116 include various question about value of assets and income from all sources (see below): These questions are used to calculate the allocation ratios.
My question: are these questions referring to my foreign income and expense or all my income and expenses? Where can I find guidance on how to answer these questions?
The line items on the form are:
(1) Deductible Home Mortgage Expense
(2) Total foreign income of type indicated above
(3) Gross income from all sources
(b) Adjusted Basis of Investment Assets Generating Foreign Income
(c) Adjusted Basis of total investment assets.
