Thanks for taking the time to explain the intricacies of the tax code. I qualify as a real estate person because I spend more than 50% of my time with real estate investments. In general, each of my investments shows a tax loss in the respective country as well as in USA. I am considering an investment in Spain. They make USA tax residents pay a flat rental income tax equal to 25% of rental income (so, no adjustments allowed for mortgage interest, depreciation, other expenses). Of course, the investment in Spain will still have a tax loss on the income tax return in the USA. I think you have addressed my concern adequately whether I would be allowed foreign income tax credit for the income tax paid in Spain while showing a tax loss on that property in USA. However, you also stated, "The unallowed portion of the foreign tax credit can be carried back one year or carried forward for 10 years , as long as there is foreign income -- again TurboTax will do all this for you". I don't expect to have foreign income, only losses on my foreign real estate investments. Wondering if you meant to say 'foreign activity' or 'foreign income'.
