Hello!
I am an expat living in Sweden. I have investments in the US which typically generate capital gains which I report on my Swedish tax declaration and pay taxes on them in Sweden. When I prepare my US taxes, I take the foreign tax credit for the taxes I pay to Sweden for both my foreign wages using one form 1116 for d) General category income and for the taxes I pay to Sweden for my capital gains on a second form 1116 for f) Certain income re-sourced by treaty.
However, for 2022 I have capital losses instead of capital gains. When I look at the effect on my Swedish taxes, this capital loss does not technically reduce the taxes on my wages but it does reduce my overall tax burden in Sweden. I am trying to figure out how to declare this tax reduction due to the capital losses on my US tax return. Can I use the form 1116 for f) Certain income resourced by treaty and write a negative taxes paid, or should I just reduce the taxes paid on the form 1116 for d) General category income, or is there a more correct way of declaring the tax reduction?
Thanks so much for your help!
