pk
Level 15
Level 15

Investors & landlords

 Your rental gross income and expenses , including depreciation , are entered on Schedule -E -- this is true whether Rental Property  is in the USA or abroad.  The only difference is that Residential Rental property in the USA are depreciated over 27.5 years whereas the international Residential are depreciated over 39.5 years.

A net profit from Rental operations is taxed as ordinary income and losses are allowed up to the limit of Passive Activity Loss Limitation.

If you do have Net Positive income from International Rental, that income is still foreign sourced and therefore can be used a foreign income for purposes of  1116. -- quenching carried over foreign tax credit.   You do not report gross income and expenses on form 1116.

Does this make sense  or ?