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?
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:
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.