Yes, you can (and should) file MFJ with your spouse.As a US citizen or resident, you have to report your worldwide income.

If the capital gains and dividends are from your US brokerage account, you report them just as if you were still in the US and pay taxes on capital gains and dividends.

If the capital gains and dividends are foreign sourced, you report them and can can claim the foreign tax credit for taxes paid outside the US. 

Thank you for your prompt response. I worked outside US for the whole year and I paid taxes in my home country for the income earned. If I try to add that in Turbotax but somehow the Foreign Tax Credit is not applying correctly and both my Federal and State Tax shot up drastically. Could you please help and advise. Thank you.

You need to go through the Foreign tax credit interview in TurboTax so that form 1116 can be included in your tax return.

To go to the Foreign tax credit section, please follow these steps:

1. Open your return and click on Search on the top of your screen.
2. In the Search box, type foreign tax credit and click on the magnifying glass icon on the right
3. Click on the link Jump to foreign tax credit
4. TurboTax will take you to a section where you can follow the interview to enter your foreign tax credit.