Hi everyone,
hoping to get some feedback from experience from people having rental income abroad and using foreign tax credit.
I currently live in the US and have a rental property in France. In France, taxes on income are due during the summer, in the US they're due in April.
My CPA used cash method of accounting on my return for last year, meaning that I didn't have to file for an extension to wait for the income tax return from France to apply the exclusion in the US, and I instead applied the tax credit on french income taxes paid during the year. I will keep this method of accounting as I think it makes sense and doesn't require to file an extension every single year to wait for the french tax return amount.
A friend of mine that is in the same situation told me that he spoke with multiple CPAs and tax experts and they said that's it's very common practice for people that have rental property in France to file an extension every year to wait for french tax return, so I believe they're using accrual method of accounting.
To me, this doesn't make sense as it makes it much more complex to have to file an extension every year, why not use cash method? Am I missing something?
I plan on doing my own tax return next year on the basis of what my CPA did last year, so I'd love to get some feedback and potential explanations for this logic.
Thanks a lot in advance!