Using Easy Stepsnin Turbo Tax Home and Business how do I get to schedule E to report foreign rent income? Where can I report sale of foreign rental property?

[Anita01 · Accepted solution]

You use the same interview as you would for domestic rental property, under Federal Taxes, 

Choose what I work on,

wages and Income, 

Rental Properties and Royalties.

When you enter the property location, choose Foreign Country.

[Anita01]

You enter the sale under the same interview as you enter the rental income.  In an early screen, you'll select that you sold or disposed of the property.  Later on, at the Asset Summary, you will edit each asset to allocate sale price and sales expenses among the assets.

[rahamies]

Thank you very much Anita! But where do I enter foreign taxes already paid? I just entered our USA rental and sale but I am at a loss with our apartment in Europe, we already paid the taxes on

[Anita01]

You can enter that under the Foreign Taxes topic.  Federal Taxes, Deductions and Credits, choose what I work on, Estimates and Other Taxes, foreign taxes.You can get a foreign tax credit for the amount of tax you would have paid in the U.S. on that same income.  If your property was in a country with a higher tax rate than the U.S. for this income, your credit will only be as high as the tax you would have paid here.

[rahamies]

Thanks again Anita! I did it now like you said and the credit is deducted from my federal taxes! But it did not go through to VA state taxes. Cannot believe that a state would charge taxes on a sale in a foreign country! Do you know, please. Thanks again, Gunilla

[Anita01]

Actually, I think it would be unusual for a state to allow a subtraction from your federal income for this, and It is not listed as one of the adjustments you can make to Federal income.

[rahamies]

OOOH, how unfortunate and unfair, you have then to pay double taxes! I thought USA and Europe had an agreement but apparently it concerns only federal taxes.  Thanks so much for your help and support.