CGT

Alan Brown — Wed, 30 Oct 2024 20:05:48 GMT

Can CGT paid in the UK for a UK real estate property sale be used for Foreign Tax Credit when submitting IRS annual return?

Re: CGT

Terri Lynn — Wed, 30 Oct 2024 20:49:05 GMT

Hello, Alan Brown!

Yes, capital gains, made from foreign property sales are considered foreign income and therefore, the taxes paid on this sale of said property can be used for purposes of claiming a foreign tax credit.

Generally speaking, there are four tests must be met, for the taxes paid to qualify for the foreign tax credit

The tax must be imposed on you.
You must have paid or accrued the tax.
The tax must be legal and actual foreign tax liability.
The tax must be an income tax or a tax in lieu of an income tax.

In addition, you will want to remember when selling property abroad, is that different kinds of residences and properties have different kinds of reporting requirements and tax specifications on your US tax return. For example, selling an overseas, qualified primary residence is handled differently, then when you sell an overseas rental property.

For more information about claiming the Foreign Tax Credit please see:

Please feel free to reach backout with any additional questions or concerns you might have!

Have an amazing rest of your day!

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CGT

Re: CGT