My wife and I are retired and living in the Netherlands, which is our tax home now. Our income is from 403b and 408 plan distributions, US Social Security, plus income from renting our home in the US. My questions have (mostly) to do with the "category of income" that I should list on Form 1116 for each of these types of income:
1) I believe that the 403b and 408 plan distributions and the income from renting our home in the US should both be listed on the same Form 1116 as "Passive category income." Is this correct?
2) Is it correct that the US always taxes US Social Security, and that it should NOT be listed on Form 1116? (If a credit is needed here, am I correct in assuming that I need to consult a tax specialist in the Netherlands about having their taxes on US Social Security reduced?)
3) When I list the income amount from the rental, should I merely list "rental income" from Schedule E? Or do I need to specify rental expenses in the section of Form 1116's Part I related to "Deductions and losses"?
Many thanks for any help you can provide.
