Foreign tax credits

Robocop2020 — Tue, 08 Dec 2020 17:38:55 GMT

quick questions - if I am claiming foreign tax credit for foreign rental property - that is to fill in schedule e with the depreciation (fmv estimate based on inheritance) , calculate the US tax and claim the foreign tax credit - do I need to have these documents translated in English? I have the originals, translated in US per the IRS rules ect, but the actual documents. I hope not. Let me know.

Re: Foreign tax credits

pk — Tue, 08 Dec 2020 19:33:57 GMT

@Robocop2020 , assuming that you are US citizen/Resident ( Green Card)/ Resident for tax purposes,

(a) yes you need to recognize the rental income and expenses on Schedule-E and in US$ converted using dollar of the day or published average rates etc.

(b) generally will not ask for proof of the income, expenses or Depreciable Basis of the asset, however it would be good idea to have proof ( in English ) of the FMV at the time of passing of the decedent -- because this will be needed when you dispose of the property ( for gain/ loss computation ). IRS does publish many of its documents / pubs in many languages ( and therefore have access to people who can read/understand quite a few languages, but it is best that you have translation done ( just in case ).

(c) Foreign taxes paid that are eligible for tax credit are generally income taxes on the income. If the taxes that you paid are not based on gross/net income then they may need to be treated differently. Which country are you talking about ? -- there may be treaty conditions that apply

topic Foreign tax credits in Investors & landlords

Foreign tax credits

Re: Foreign tax credits