@pk Hello again - this is exactly the help that I needed! So the conclusion is that I will actually take into account the tax reduction that comes from the loss on my passive income from the taxes that I paid on my active income and report the total on the form 1116 for d) General category income. I saw that I had switched two rows in my table but I have now updated the table so that it is in agreement with the conclusion of our discussion. Hopefully this information will help other ex-pats who have experienced a loss on their investments. Thanks so much for your time and patience!
| | Investment gains | Investment loss |
| Income from wages | 50000 | 50000 |
| Employer's pension contribution | 10000 | 10000 |
| Total active income | 60000 | 60000 |
| Taxes on wages | 15000 | 15000 |
| Working taxes reduction | -2000 | -2000 |
| Total tax on active income | 13000 | 13000 |
| Interest | 1000 | 1000 |
| Dividends | 1000 | 1000 |
| Capital gains | 2000 | -6000 |
| Total passive income | 4000 | -4000 |
| Total tax or tax reduction on passive income | 1200 | -840 |
| Property tax | 500 | 500 |
| Burial tax | 100 | 100 |
| Public service tax | 100 | 100 |
| Tax reduction for mortgage interest | -300 | -300 |
| Total tax bill | 14600 | 12560 |
| Declared foreign tax paid on form 1116 d) General category income | 13000 | 12160 |
| Declared foreign tax paid on form 1116 f) Certain income re-sourced by treaty | 1200 | 0 - Do not fill out this form |
| Dummy Check - Total foreign tax paid for passive and active income minus declared on 1116 f) and 1116 d) | 0 | 0 |
