I have read some posts regarding the sales of foreign property for US resident living in the States. I know sales of foreign property is treated the same as that of domestic property albeit without 1099-S. However, I have some more questions that I don't see them being addressed in the community forum.
My situation:
I am a US citizen/resident living in the USA. I inherited a foreign property together with my siblings (who are foreigners and not US residents) 13 years ago. My siblings decided to sell the property in 2023 (realized some gains) and they will wire transfer my portion of the net proceeds to me from the foreign country to my US bank account directly (so no FBAR is required). I am aware that I need to report the sales on form 8949, schedule D and/or form 1116 (to claim the tax credit I paid to the foreign government) in the year 2024 for tax year 2023.
My questions:
1. Does TurboTax premier desktop version include form 1116 that can e-filed with all of my other tax forms if I claim foreign tax that I paid? If yes, which section of Turbotax premier handles this (just to be prepared for tax year 2023)?
2. Will my portion of the net sales proceeds which will be more than $100,000 also need to be reported on form 3520 even if I will report it on form 8949 and schedule D? Note. I also received a gift of less than $100,000 in the same year as the sales of foreign property, which I don't have to report on form 3520 because the gift is less than $100,000. But if I have to report the proceeds from the sales of foreign property on form 3520 then I will have to report this gift as well, correct?
3. The proceeds that I will receive is the net proceeds after deducting taxes (which is 20% of the gain) and expenses. When I report it on form 8949, should I add the taxes and expenses back on top of the net proceeds and claim the foreign tax credit on form 1116 in order to offset US capital gain tax so I won't be taxed the second time (capital gain) without form 1116 on the US income tax?
Thank you in advance for your help.
