foreign income section

[garyl888]

My wife is from another country and has foreign income from her bank interests, stock dividends, government child care subsidies, stock sales, etc.   In the foreign income section, can I enter her stock capital gains under the Gains/Losses box?  Can I enter her salary and government child care under Other Income box?  She also paid taxes in her home country, can I enter that under Credit box?

Also, was I supposed to manually enter these incomes in the Income section as well?  For example, she doesn't have a 1099-INT for her bank interests, so should I still create an entry for her bank interests?  Do I need to create one for each bank or I can add up all her banks into one 1099-INT?  

[AmyC]

Enter the various incomes in this manner:

• Stock capital gains - enter the sale of stocks in the investment section, just as you would. 
• Salary - it depends. 
  • It can be entered for the foreign earned income exclusion (FEIE). 
  • You may do better to report the income (as other income) and claim the foreign tax credit (FTC) against the income. 
  • When you claim FEIE, you lose some credits. You may want to try the income both ways to see which works out best for you.
• Child care - subsidy? It does go under other income but my concern is taxability. It may not be taxable depending on the tax treaty. See  Tax Treaty Tables to determine if it is taxable income.
• Foreign taxes paid go on the Form 1116 Foreign Tax Credit.
• Bank interest can be added all together and entered as one 1099-INT. Title it something obvious - foreign bank interest

Fbar and FATCA probably need to be filed as well. Here is a comparison of the FATCA (Form 8938) and FBAR requirements.

Caution: Be sure all numbers are reported in USD. See Yearly Average Currency Exchange Rates - IRS