Form 1116 line 1a adjustment

Forum|Forum|3 years ago
September 6, 2023
2 replies
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I am not able to post this as separate question in TT.Some how it is not giving me chance.

Form 1116 Line a--Basic question.
Line 1 a adjustments -depends on tax rate that applies to individual case for 'Qualified dividends AND CAPITAL gains' and section 1251 and section 1239 Gains .

Does this adjustment stipulation covers LTCG on Real Property.?

This is since the documentation mostly it revolves around --Qualified dividends and capital gain Distributions- understanding is LTCG for real property sale will not relate to the above "capital gain distributions'

Many thanks in advance for your answer.

(And I was suggested previously by experts that I may ask CPA. But few CPAs I spoke have not with knowledge of this forum experts--on FTC. experts like y pk ,Mike and Rogge and other experts has better knowledge than many per forums. That is why I am posting here for help.)

TurboTax Online

Best answer by pk_

Expert Reviewed

@rayeng , your question :

Form 1116 Line a--Basic question.
Line 1 a adjustments -depends on tax rate that applies to individual case for 'Qualified dividends AND CAPITAL gains' and section 1251 and section 1239 Gains .

Does this adjustment stipulation covers LTCG on Real Property.?

Yes , please see form 1116 instructions pages 6, 10,11 etc. Also you have to consider Tax treaty between US and Foreign income source country. My only struggle is that whereas I see and use the adjustment factors, I do not understand the derivation thereof i.e. I cannot figure out why 0.4050 for 10% taxed rate etc.

But in your particular case of sales gains from foreign Real-Estate and if any adjustments are required , I believe , TurboTax will do that for you >

Is there more I can do for you ?