@lbeauvil , while generally agreeing with @DawnC for her excellent reply, one point one needs to remember is that Foreign Net Rental income ( IRS sometime calls it Gross Rental income ) is Total Rental income LESS deductions allowed under the laws of that country ( which may or may not be the same as US version ). The logic behind this is that your net foreign rental income is based on local laws --that is what you received as foreign income. Any income taxes paid on that net income ( may be different from the US rental income Schedule-E ) to a foreign taxing authority is eligible for Foreign Tax Credit by using form 1116 ( while all the foreign taxes paid is recognized as foreign tax credit, ONLY a portion is allowable for the current tax year and rest available for carry back or carry forward ).
Does this make sense ?
Is there more I can do for you ?
