Where do I report interest income earned in a foreign country, while also living in that foreign country?

[Mike414]

I live in a foreign country and earn both wages and interest income in that country. I'm confused about how interest income earned in the foreign country should be reported.

When I start the Foreign Earned Income section in Turbotax, it explicitly tells me on the second page:

"Enter your foreign earned wages....

It does not include:

Interests and dividends from estates, trusts or businesses based in another country."

So if I not report interests (or capital gains, for that matter) in this section, do I need to report these under the regular Interests / Dividends / Investment income section?

And if I do so, does it mean I won't be able to use the foreign earned income exclusion at all for interests/dividends/capital gains I received while living abroad in a foreign country?

[DanaB27]

Yes, that is correct the Foreign Earned Income Exclusion doesn't apply to Interests / Dividends / Investment income.

Yes, you will enter these under the regular Interests / Dividends / Investment income section:

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down to "Interest and Dividends" or "Investment Income"

You might be able to claim the Foreign Tax Credit if you paid any foreign taxes on this investment income. Please see Where do I enter the foreign tax credit (Form 1116) or deduction? and Claiming the Foreign Tax Credit with Form 1116 for additional information.