- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Deductions & credits
@abhishtu2 , Namaste ji.
(a) Under the US-India Tax treaty and utilizing the double taxation clause, US will give you credit for taxes paid to India. However, the amount allowable in the current tax year ( year in which the sale took place ), the best case scenario is for US tax on that same doubly taxed foreign source income is nil. But generally it is far less than that.
(b) Most states including MI do not recognize US-Other country tax treaties ( some states do or have their own with a neighbor foreign country -- e.g. NY with Canada )
(c) Also to note there is that your gain/ loss on alienation of foreign real-estate for US Tax purposes is based on US laws ( no indexing of basis as is done in India.). And it is the lesser of the two gains ( US and India ) that is doubly taxed -- generally US gain is higher.
Is there more I can do for you ?
Namaste ji
pk