LinaJ2020
Expert Alumni

Deductions & credits

You only qualify for the foreign tax credit if with the same amount of income, you pay taxes to both the foreign and US government.  In your situation, if you paid taxes to Australia on your sale of home and you are reporting the same sale on your US return, you may qualify for the credit.  TurboTax program does not automatically transfer your information over to your foreign tax credit section.  You have to manually go through it.  Here are the steps:

  • Open up your TurboTax account and select Pick up where you left off
  • At the right upper corner, in the search box, type in "foreign tax credit" and Enter
  • Select Jump to foreign tax credit
  • Follow prompts

 

If you can't claim a credit for the full amount of qualified foreign income taxes you paid or accrued in the year, you're allowed a carryback and/or carryover of the unused foreign income tax, except that no carryback or carryover is allowed for foreign tax on income included under section 951A. You can carry back for one year and then carry forward for 10 years the unused foreign tax. To read more, click here:

https://www.irs.gov/taxtopics/tc856

 

 

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