I am entering Foreign Tax Credit for the Taxes I have paid on Sale of property in a foreign Country.
Why is Turbo Tax going into AMT screen and asking First Year you are eligible? Next screen is
Elect Simplified Method.
This is a simple Sale of property and I am nowhere near the AMT $ amount.
Can someone help me on this I am going in circles.
Thanks in Advance
@dhirenk2003 , assuming that you are US citizen/Resident ( Green Card )/ Resident for tax purposes, you are taxed on world income. Thus sale of property/ asset is taxed and therefore TurboTax will go through AMT questions --- please tell me more about the sale of property:
1. How did you acquire the prop --- buy / inheritance
2. How did you use the property -- own residence / residence of relatives ( i.e personal use / 2nd home )/ rental income
3. when did you acquire , when did you dispose of the prop, did you sell to a relative or at arm's length
4. did you have to pay capitals gain to the foreign taxing authority ( India ? ), and other expenses such as transfer taxes etc. Note that some countries like India uses indexing before computing capital gains and the longterm rules are different -- US does not use indexing and therefore capital gains may be different for US tax purposes.
Thanks for your response.
Here is my reply to your qs:
1. I bought the property(condo) when I was a resident of India. (20 years back) for my own residence.
It was not a rental - locked and sitting there.
2. Sold in 2019- on the market.
3. I paid Long Term Cap Gains tax in India.