Solved: I live in Israel and sold some stock for $49k in Feb 2018. I had to pay $14k in israeli tax, and only ±$35k made it into my bank. How do I report this tax?
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I live in Israel and sold some stock for $49k in Feb 2018. I had to pay $14k in israeli tax, and only ±$35k made it into my bank. How do I report this tax?

 
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Level 15

I live in Israel and sold some stock for $49k in Feb 2018. I had to pay $14k in israeli tax, and only ±$35k made it into my bank. How do I report this tax?

You still report the $49K capital gain, not the net after taxes.  But there is a deduction or credit for foreign taxes paid that should offset some or most of the effect of double taxation.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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Level 15

I live in Israel and sold some stock for $49k in Feb 2018. I had to pay $14k in israeli tax, and only ±$35k made it into my bank. How do I report this tax?

You still report the $49K capital gain, not the net after taxes.  But there is a deduction or credit for foreign taxes paid that should offset some or most of the effect of double taxation.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

New Member

I live in Israel and sold some stock for $49k in Feb 2018. I had to pay $14k in israeli tax, and only ±$35k made it into my bank. How do I report this tax?

That's the issue - I just can't find where to insert the "deduction or credit for foreign taxes paid" on TurboTax! Any ideas?
Level 15
Level 15

I live in Israel and sold some stock for $49k in Feb 2018. I had to pay $14k in israeli tax, and only ±$35k made it into my bank. How do I report this tax?

Here's how to enter the foreign tax you paid on the sale of stock in TurboTax Online.

  • In the black navigation bar on the left side click Federal. Then click Deductions & Credits at the top.
  • Answer questions, if necessary, until you get to the screen that says "Let's check for tax breaks." If that screen is not already expanded, click "Jump to full list."
  • Scroll down to Estimates and Other Taxes Paid. If that section is not already expanded, click "Show more" for that section.
  • Click the Start (or revisit) button for Foreign Taxes.

Since you probably have other foreign income, when you get to the screen that says "Reporting Foreign Taxes Paid," be sure to click the "special instructions" link and read the special instructions for multiple categories of foreign income.

The income from the sale of stock is in the passive income category.

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