turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

2025member94
Returning Member

Form 1116

we sold our inherited house in india. as per IRS there is no double taxation. after entering all the data, the turbo tax online form 1116 is not showing the right amount even though i have entered the right info for 

sale price, FMV, taxes paid 

 

any help is much appreciated

x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

2 Replies
pk
Level 15
Level 15

Form 1116

@2025member94 , Namaste ji

 

While I cannot provide a detailed / focused answer  to your particular situation --- need more details/figures etc. --- in general " no double taxation" is not exactly true .

Form 1116  ( and generally this is what the tax treaty calls  out)  recognizes the whole amount of Foreign Taxes Paid but the allowed amount of Foreign Tax Credit is limited  to  the lesser of Foreign Taxes paid and that imposed by US ( on the same foreign source income being taxed by both countries ).

Note that while India  taxes  ( not the TDS amount )  real property alienation  either  on indexed  basis ( think at 20%) or Fair Market basis at 12.5%, US taxes the gain based on FMVs  at passing of the decedent and sales price ( with some deductions allowed).  Thus the foreign source income for the US and that in India  may be very different.

If you wish a more focused  on your situation, please provide more details --- what was the FMV at acquisition ( passing of the decedent ), Sales price, use of the asset during your holding period, sales expenses, transfer tax etc. etc.   Also your own world income  ( your US income if  the capital gain was the only foreign source income). 

If you are uncomfortable providing all these details in this public board, you are welcome to PM me  --- it is not visible to other posters .  Just no PII -- Personally Identifiable Information.

I will be happy to help you resolve this issue.

 

Namaste ji

 

pk 

Form 1116

There are many reasons why the amount of taxable income you must report to the US for sale of property may be different than the taxable income you report in India.  The tax you paid in India may very well not offset the US tax. 

Unlock tailored help options in your account.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question