I sold a piece of land which was a gift from my mom in 1997. Sales happened in 2017, and I paid tax to S. Korean tax authority; i have the copy of the receipt.
Should I treat this as capital gain apply the long term gain tax rate? or should I claim the tax credit (form 1116)? I'm using Turbo tax -home and business and a bit confused if I need to use both form schedule D and Form 1116.
Thank you for your help.
You need to use both Schedule D and Form 1116. Report the sale of the property on Schedule D. When you enter the date acquired and the date sold, TurboTax will know it is a long term capital gain. Your cost is your mother's cost basis on the date of the gift plus closing costs and any improvements you made. To get credit for the foreign tax paid you will have to fill out Form 1116.
Here is a link to help you find where to enter your information into Form 1116:
https://ttlc.intuit.com/replies/3302405
Here is a link to help you find where to enter the sale of the property:
You need to use both Schedule D and Form 1116. Report the sale of the property on Schedule D. When you enter the date acquired and the date sold, TurboTax will know it is a long term capital gain. Your cost is your mother's cost basis on the date of the gift plus closing costs and any improvements you made. To get credit for the foreign tax paid you will have to fill out Form 1116.
Here is a link to help you find where to enter your information into Form 1116:
https://ttlc.intuit.com/replies/3302405
Here is a link to help you find where to enter the sale of the property:
After entering the (foreign country) sale proceeds in Schedule D, can I put 0 in the Form 1116 Part 1 Line 1a, where it asks for gross income in foreign country? Otherwise won't it add the sale proceeds twice to my income?