topic HTKO applicability question.On which percentage rate will kick in HTKO for long term Capital gains on property. seems there are Two versions on that. Which one? in Deductions & credits

HTKO applicability question.On which percentage rate will kick in HTKO for long term Capital gains on property. seems there are Two versions on that. Which one?

Raytam — Tue, 24 Feb 2026 07:29:00 GMT

HTKO applicability question.On which percentage rate will kick in HTKO for long term Capital gains on property.
Seems there are two versions .One is US max taxes on 'that' income and other is 'Highest taxes rate' 39.60%. Which one please?

Re: HTKO applicability question.On which percentage rate will kick in HTKO for long term Capital gains on property. seems there are Two versions on that. Which one?

rjs — Mon, 04 Sep 2023 00:40:43 GMT

I believe that the rate at which HTKO would apply is the rate that would apply to the income in question, but I am not an expert in this area.

You have posted a number of questions about Form 1116. There are a lot of limitations on the support for Form 1116 in TurboTax. The Unsupported Calculations document lists many uncommon or complex situations that are not supported. See item 8 under Foreign Income, beginning near the bottom of page 2 of the document and continuing on page 3. In particular, note the following.

"If there is passive category income that is treated as general category income because it is high taxed (HTKO), you must read the IRS Form 1116 instructions for line i and lines 2-5 and 13 on how to enter this income and the related foreign tax. Amounts automatically calculated on these lines must be overridden."

Overriding the calculated amounts can only be done in forms mode in the CD/Download TurboTax software. There is no way to do it in TurboTax Online. In addition, the overrides will prevent e-filing and will void the TurboTax accuracy guarantee.

I suggest that you seek professional help for preparing your tax return, rather than trying to force TurboTax to handle things that it is not designed to handle.

Re: HTKO applicability question.On which percentage rate will kick in HTKO for long term Capital gains on property. seems there are Two versions on that. Which one?

Raytam — Mon, 04 Sep 2023 15:19:59 GMT

Thanks for the reply. I am aware of the limitations etc. from 2019 TT unsupported calculations it self but never had to do that or was needed but just following .But in a particular new scenario this year as a general question to the experts who already did some -- regarding GENERAL APPLICABILITY as I am trying to find out. as it was not clear on the topic.(On LTCG--real property)

I am following TT blogs from 2017 onwards on some topics--like some people seems(not sure) e filed through TT even if some one comes in the umbrella of HTKO with overrides too--. with some tips provided and help (not as guarantee) by one TT experts -- 'rogge' and others .in previous years.

I understand that TT can not guarantee some area calculations but just wanted to check generally whether e-file went through for HTKO--incase HTKO needed?

(Mine may be borderline issue and may not come in to HTKO but that is what I am trying to find out get an idea--).

Thanks