Hello!
This is the first time I need to combine the FEIE (Foreign Earned Income Exclusion) and the FTC (Foreign Tax Credit). I live abroad and am able to exclude all of my employment income with the FEIE, but this year I have foreign capital gains for which I would like to use the FTC. Employment income was taxed by the foreign country and capital gains taxes were taxed by the foreign country at this country's flat capital gains tax rate.
How do I enter this correctly in TurboTax to use both the FEIE and FTC (without accidentally revoking the FEIE)? Personal income is entered unter FEIE and the capital gains are entered in the personal section. Since I take the FEIE on earned income, do I only need one Form 1116 for the FTC for passive income? And do I enter my complete foreign income tax burden on the FTC questionnaire for passive income"Foreign Taxes Paid - on other income", or just the capital gains portion? Or do I also have to submit a second Form 1116 for general income, even though all of this income falls under the FEIE?
Thanks for the help!
