jtax
Level 10

Deductions & credits

You can. But US capital gains rates are so low you might not see any benefit. Also if you are in the zero percent capital gains rate in the US you won't get anything back because you the foreign tax credit (FTC) does not give you a credit for your overseas taxes. Rather it gives you a credit (roughly) on the US tax on the foreign income. US taxes are so low that is almost always much less than the foreign taxes.

 

I would suggest you VERY carefully go through the foreign tax credit interview questions in TT. If the amounts are significant, you may well want to seek the advice of a CPA, enrolled agent, or tax attorney who deals with US citizens living overseas. It is a very complicated and specialized area of tax law.

 

See also page 9 ("Foreign Qualified Dividends and Capital Gains (Losses)" for complicated adjustments you might need to make depending upon the amount of gain.

 

https://www.irs.gov/pub/irs-pdf/i1116.pdf

 

Note, if you are an overseas resident then it is likely that your US stock sales are considered to be "foreign source" by the tax code section 865(a)(2), though there are some exceptions (e.g see 865(g),  no "abode in the US", etc.). https://www.law.cornell.edu/uscode/text/26/865

 

(a)General rule

Except as otherwise provided in this section, income from the sale of personal property—

(1) by a United States resident shall be sourced in the United States, or
2) by a nonresident shall be sourced outside the United State
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