@Carl
@AmeliesUncle
in addition to the reference, I mentioned before
https://ttlc.intuit.com/community/tax-credits-deductions/discussion/i-have-rent-income-in-germany-wh...
I also found the same explanation here (published 3 years ago)
https://www.german-probate-lawyer.com/en/detail/article/taxation-us-citizensresidents-of-rental-inco...
And the same thing should work for India as India/Germany article 6 in tax treaty very similar.
So I assume, that things about deprecation and taxation on foreign rental income would work for countries, where no such exclusion under the tax treaty. And probably it should work in the same way for US citizens, GC holders, and other US resident aliens. So it's a kind of general approach on rental property taxation.
Unless a reporter voluntarily or due to lack of knowledge of such exclusion will decide to tax his foreign rental income under the general US approach. It's not wrong, he just could pay additional taxes and it could be a more complicated way as all expenses, etc should be reported.
It would be perfect if some tax professionals could confirm or provide a critic in this discussion.
to summarize my current understanding:
It seems to me that in addition to do foreign tax credit for specified income (which is a common and well-known way to do under form 1116) we have additional options to exclude very specific incomes @ all using tax treaties from taxation. For sure tax treaties should clearly define this option for a specific country and specific income (and it seems like not well-known but allowed way). And Form 8833 designed especially for that and should be attached to the tax return.
