You would enter this as a sale of a second home in Turbo Tax under federal>wages and income>less common income>Sale of home(gain or loss). You will pay capital gains on the $50K unless there were exceptions involved. This is covered in the Turbo Tax interview as you complete this section. in the end, the taxable income will show as a capital gain on Schedule D of your return.
Now for the foreign tax credit if you paid taxes to Uruguay on this sale.
- Go to wages and income>deductions and credits>
- estimates and other taxes paid>foreign taxes.
- Answer all of the questions that are asked until you get to the Foreign Tax Credit Worksheet. In the next screen when it asks For the income type, choose passive income.
- Next screen will have you add a country, here you will select Uruguay.
- Next it will ask Other Gross income-Uruguay. Describe this as personal residence and then the amount of the gain. This is informational only add will not add to taxable income.
- Then continue through the screen. Don't enter a total for foreign losses for Uruguay because this may reduce the amount of the credit.
- Now you will enter the amount of foreign taxes paid to Uruguay. Enter this under Foreign taxes paid on other income. You will not need to enter anything additional in the program but you will need to continue through the screens until you are informed what your Foreign Tax Credit is.
- Now continue through the the rest of the screens until the program informs you what your foreign tax credit is.
@marudigi
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