I sold shares in Indian Companies bought before becoming a resident of US. I presume that I will get a free allowance of $47000 of LTCG for 2024. On the balance of long term capital gains of say $20000, the tax payable is about $3000. If I pay long term capital gain tax of $4500 in India can I get tax credit for that amount and set off the entire capital gains tax in the USA and show the LTCG tax as zero?
Do I have to record all transactions in 8949 and submit with Schedule D?
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@ramanathan1720 if you are a US citizen or Resident Alien, you are required to report ALL your WORLD WIDE income on your tax return.
Why are you assuming $47k is not subject to US income tax?
@ramanathan1720 , agreeing with my colleague @NCperson , and just adding my two cents:
(a) AS a US person ( citizen / GreenCard / Resident for Tax purposes ), you have to report / recognize AND be taxed on your world income.
(b) Assets that you acquired prior to becoming a US person remain your asset with the same basis during your US person stage. The basis is generally is your acquisition cost ( i.e.. price + any associated costs for Acquistion ) Note that US does not index basis ( as practiced in India for some types of asset ).
(c) AS you are aware your Capital Gain taxation is based on your Modified AGI and no necessarily at 0%
(d) Depending on your exact situation and the amount of Foreign Taxes you pay to India and under the "double Taxation " clause of the treaty, you can choose to claim foreign tax credit ( limited by form 1116 ) or take deduction ( under SALT limitation ) if you itemize.
Give the above , is there more one of us can do for you ?
Namaste ji
pk
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