How do I enter capital gains from sale of a property abroad. Do I enter the net proceeds (after the capital gain tax I paid)? How do I claim foreign tax credit? thanks

[snwong79]

Bought pre-sale condo 2014, finished building 2019, sold 2020.  Never lived nor rented out.

[DavidD66]

You will report that in the same section in which you report stock and other investment sales.  To enter: 

• Type "Investment sales" in the search window and click Enter
• Click on "Jump to Investment sales"
• On the page with "Did you sell any investments in 2020?"  Answer Yes
• Answer "Other" to "OK, what type of investments did you sell?" and click Continue
• Enter the name of the person or firm that brokered this sale
• On the page with "Now we’ll walk you through entering your sale details" for "What type of investment you sold" Indicate "Other "
• Indicate "How did you receive this investment?
• Enter the details of the sale, and the interview will walk you through entering the details of the sale

To receive the foreign tax credit, enter "Foreign tax credit" into search and hit enter.  The program will guide you through claiming the credit.

[snwong79]

Much thanks!

For the Foreign Tax Credit.  Do I pick itemized deduction or take the credit?  The capital gains tax I paid was $15K.  Thanks!

[npierson7]

You don't need to itemize your deduction to get the credit. Once you're done enter information from your 1099-INT, 1099-DIV and 1099-B forms which includes foreign taxes paid, go to Deductions & Credits to see if you're eligible for the Foreign Tax Credit

You can find more information about that credit here:

Foreign Tax Credit and Other Tax Implications of Foreign Investments

[snwong79]

there was no 1099 issued as the capital gain tax I paid was for sale of a property in the Philippines and the government imposed that tax during the sale.  I thought I have to file form 1116??  Thanks!

[npierson7]

Yes, in that case you'll probably need to file Form 1116. To access the form in TurboTax:

1. Search for foreign tax credit and select the Jump to link in the search results.
2. Answer Yes to Did you pay foreign taxes in 2020 or have credits to use from a prior year?
3. Follow the instructions to get the credit or deduction.

In most cases, taking the credit works out better than the deduction. We'll help you decide which one's best for you when you go through this section.

If you choose to take the credit, TurboTax will attach Form 1116, Foreign Tax Credit  to your tax return.

[snwong79]

Hi 

For form 1116.  Do I enter the sales proceeds under 1a = the Gross Income from that country?  For example $200,000 if that's the sales proceeds.  Or do I enter the net gain amount (sale minus cost)?  Thanks!

[npierson7]

You need to enter the gross amount there.

[snwong79]

sorry but when you say gross amount, does that mean the sale price of the property I sold?  just want to clarify and much thanks for your patience.

[ToddL99]

Yes, the term "gross amount" typically refers to the "sale price" of the property.

If there were any selling costs (e.g. commissions),  add them to the cost basis of the property to ensure an accurate calculation of the gain.

[128911]

I sold a piece of land abroad in 2020 and transferred my entire sale proceeds to my bank account here in USA. Do i have to report this transaction in my tax return, 

Would it be the entire amount of transaction or just the gain/ profit.

How do i calculate my gain/ profit.

do i need any supporting documents.

[DaveF1006]

You will report the sale of the land by:

1. Click on Federal > Wages & Income.
2. In the Investment Income section click on the Start/Revisit box next to Stocks, Mutual Funds, Bonds, Other. You will report the Gross Sale proceeds in this section. 
3. Based on what you report in Turbo Tax, Turbo Tax will determine your gain/profit.
4. You need to save your documents along with your 2020 tax returns but you do not need to send these to the IRS.