Thanks,
1. I almost forgot about proration - I understand - Financial year in India is from April 1st 20 to March 31st 2021 and in USA it is Jan 1 2020 to Dec 31 2021.
Wow - we have to calculate partial income from previous financial year (of India) i.e from Jan 1st to 20 to March 31st 20 (from Indian financial year 19-20) and deduct form Jan 1st to March 31 2021 - This will really complicated. Do we have go give any proof to IRS - because our calculation could have errors. To make this calculation easy do u have any suggestion? Because banks in India interest certificate at the end of the year. so not sure how we will figure this out.
2. What do u mean by passive income - is stock market investment (capital gain) considered -active income? I am positive interest income is passive income ..She had only 2 income 1. capital gain 2. interest income. Because she did not have any employment income - she can not choose Foreign earned income exclusion?
3.I believe she has to choose foreign tax credit option - her passive income alone is more than $300. in that case she needs to file 1116 correct? I guess so but question is - can she deduct all of the Indian tax paid as foreign tax credit? or there are some complications?
4. What do you mean when you said - taxes on her income in India may be just a lost cause ?
5. If her Indian tax payment is less than taxable income in India - she still should file return here ..correct?(as of now I am not sure if her income will be more than $14050?
