Your step by step instructions noted above appear to work, although I must say that the Other Gross Income - Italy sheet is quite confusing (even for someone like me with a bit of tax experience), since it specifically says that you should NOT enter any income already reported on Form 1099. I have, of course, already entered all of the tax slips for interest earned in both the USA and Canada under the applicable income section. I do believe that even though the language on that sheet is unclear and confusing, what the6 really mean is to add the interest income as Other Gross Income because it in this particular section has been re-sourced under the USA-Italy tax treaty so that it is now being considered as having been our ex in Italy and therefore now eligible for the FTC against USA tax that is due on that very same income. Please let me know if you concur with my thinking here. Also, could you kindly advise if a Form 8833 needs to be included when filing the return, regarding the application of the tax treaty related provisions? I do not believe that form is warranted and that would be good for you to confirm since I reside overseas and will file online and I do not believe that Form 8833 is supported by TurboTax and if it were required it would need to be completed and mailed in.
