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
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@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
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.
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