Yes, if you are a US citizen or resident, you are required to report worldwide income including the sale of foreign investment on your US taxes.
In TurboTax online, here are the steps:
- Sign into your account and select Pick up where you left off
- At the right upper corner, in the search box type in investment sales then Enter
- Select Jump to investment sales
- On screen, Did you sell any investments in 2020 ?, select Yes to follow prompts
- Under Choose the type of investment you sold, select Everything else (if it's an investment property)
- Enter your investment property information
The sale should be reported on Schedule D of your Form 1040 generating a capital gain or loss. For details, click here: Capital gains and losses You could also be required to submit IRS Form 8938, Statement of Specified Foreign Financial Asset if you meet the criteria. A Form 8938 is used when you have specified foreign financial assets and the total value of all the foreign assets in which you have an interest is more than the appropriate reporting threshold. For details, click here: https://www.irs.gov/instructions/i8938
For the IRA distribution held by foreign group in foreign country, it might be tax treaty related. Generally, foreign pensions are taxable to US citizens or residents. However, some foreign pensions might not be taxable if it is covered under any tax treaties between the foreign country and the United States. This is out of scope for our advice. I will suggest you to consult a specialized professional for verification.
If is taxable, you will need to create a substitute form 1099-R.
Here are the steps:
In TurboTax online,
- Sign in to your account and select Pick up where you left off
- At the right upper corner, type in 1099r, then Enter
- Select Jump to 1099r
- Follow prompts
- Next screen, Choose your bank or brokerage, select I'll type it in myself
- Follow prompts. On the screen "Tell us if any of these uncommon situations apply"
- Check the box I need to prepare a substitute 1099-R and follow the prompts.
As to the Federal ID, most of the foreign pensions often do not have the ID number. Please try entering nine 9s. If electronic errors occur due to 1099-R data entry, enter the pension under Miscellaneous income, see instructions below. As long as the IRS has the pension reported and included in total income, it is not problematic.
- To your left, select Federal
- From the top, select Wages and Income
- Scroll down to last section -Less Common Income -select Miscellaneous Income, 1099-A, 1099-C- Start
- Next screen, scroll down to Other Reportable Income- Start
- Follow prompts
For more information, see http://www.irs.gov/Businesses/The-Taxation-of-Foreign-Pension-and-Annuity-Distributions
If it is not taxable to you,
- report your full amount as instructed above in the 1099R section. Then enter the treaty exempt amount as negative amount (e.g. -5000) under Other Reportable Income as instructed below.
- You cannot e-file. You may still use the TurboTax program to prepare all your tax forms, but you would need to print them out and submit by mail along with form 8833.
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