I sold an an apartment in India. I am reporting the sale in second home category. I paid taxes in India on capital gains. How do I claim the credit for taxes paid in India?
While filling details for the sale, no where there is an option to select this as foreign income. When I look for form 1116, it says that no foreign income found.
Please help.
Rajesh K.
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Here is the proper way to report this.
To claim the Foreign Tax Credit.
Here is the proper way to report this.
To claim the Foreign Tax Credit.
Thanks for step by step instructions. This really helped. I have one more question, The federal tax give credit for foreign taxes paid but NJ state is still charging tax on the gains. Is that normal?
Thanks again for your help.
Yes. Many states do charge tax and NJ is among them. It specifically states on the credit for double taxation (COJ), not to give credit for a foreign country.
Resident Income Tax Return Instructions states:
Do not include on line 1:
• Income subject to tax by a foreign country, U.S. possession, or territory;
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