Foreign Property Sale Foreign Tax Credit

[IndianExpat]

I sold property in India and paid Tax in India. Now, I want to claim Foreign Tax Credit (FTC) and entering my information here but I have a question about this page which directly updates form 1116 Part 1, Line 1a(Gross Income)

I am not sure if I put profit (Sale Price - Purchase Price - Agent commission) or jut put sale price on this section?

[DaveF1006]

It's the same amount of proceeds (USD) that you were taxed in India. I believe in india, only the gross proceeds are taxed and not net proceeds after expenses.

[IndianExpat]

Thank you.

I am bit confused still. For a real estate transaction, do I need to enter sale price or net profit (sale price - buy price - improvements - commissions)?

[DianeW777]

The sale is reported on your U.S. federal tax return with all the details. The purchase/buy price plus improvements less sales expenses (commissions) as your cost. Also you will enter the sales price in U.S. dollars. On the foreign tax credit section you will enter the details as requested on each screen.

• Where do I enter Investment Sales?

Enter the gross sales price and on the screen asking for related expenses enter your cost, improvements and sales expenses. Continue until you enter the tax paid to India.

You may qualify for the foreign tax credit or deduction. Please see the links below to begin your entry and the IRS exchange rates.

• Where do I enter a foreign tax credit or deduction (Form 1116)?
• Claiming the Foreign Tax Credit
• Yearly Average Currency Exchange Rates

@IndianExpat