Can CGT paid in the UK for a UK real estate property sale be used for Foreign Tax Credit when submitting IRS annual return?
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Hello, Alan Brown!
Yes, capital gains, made from foreign property sales are considered foreign income and therefore, the taxes paid on this sale of said property can be used for purposes of claiming a foreign tax credit.
Generally speaking, there are four tests must be met, for the taxes paid to qualify for the foreign tax credit
In addition, you will want to remember when selling property abroad, is that different kinds of residences and properties have different kinds of reporting requirements and tax specifications on your US tax return. For example, selling an overseas, qualified primary residence is handled differently, then when you sell an overseas rental property.
For more information about claiming the Foreign Tax Credit please see:
Please feel free to reach backout with any additional questions or concerns you might have!
Have an amazing rest of your day!
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