Complex question.
1) This year I had a rental property income in a foreign country where I paid taxes ~30% (or $1000) on my income
2) I bought a USDC coin (crypto) with foreign currency (simply exchange foreign currency to USD and bought USDC coins 1:1)
3) Then I sold this USDC crypto coins on Coinbase to USD 1 :1 (1 USDC = $1 USD)
4) And withdraw the money to my US bank account
What would be my steps to declare this operation?
1) I need to declare my foreign income and tried to get Foreign Tax Credit (Form 1116)?
2) Claim the Foreign Earned-Income Exclusion (FEIE) (the country, where I had that income, has a special agreement with the US)
3) As I understood I should not report any capital gain on my crypto transactions since I did not make any income buying USD - >USDC -> USD with the exchange rate of 1:1. Am I right?
Am I missing something?
Thank you.
