Foreign Tax Credit on sale of home in India

A.  Sale of second home, see Where do I enter the sale of a second home, an inherited home, or land on my 2023 taxes?  Here are my steps:

1.Personal income to investment income to stock, bonds, other

2. Select Other, continue

3. Name the sale: Second home, continue

4. Select the drop down boxes and enter your answers.

5. Enter the foreign country or more of the address

6. Enter purchase and sales dates

7. Enter sales price

8. Enter basis - what you paid plus improvements

9. continue

10. Enter sales expenses or select none

11. Continiue

B. Foreign tax credit is form 1116 and most people choose a credit over a deduction but you can try both ways. See Where do I enter the foreign tax credit (Form 1116) or deduction? 

To begin, go to deductions, Estimates and Other Taxes and select Foreign Tax

Follow these steps:

1. Return to the Foreign Tax Credit and select
2. Yes to foreign income
3. Before We Begin, Yes
4. Foreign taxes, Continue
5. Select none of these apply, continue
6. continue
7. Take a credit, continue
8. reporting foreign tax, continue
9. No other income or expenses? Select No
10. Complete form 1116, continue
11. Worksheet, continue
12. Select Passive income for a rental or second home
13. continue
14. 
15. Select blue Add a country
16. 
17. Select India
18. continue
19. enter the description
20. enter the USD for the India income
21. continue
22. enter any related expenses
23. continue
24. enter explanation of how you calculated expenses
25. continue
26. enter foreign losses related to India as a positive amount
27. continue
28. Foreign Taxes Paid, select No -
29. enter foreign taxes
30. enter date paid
31. continue
32. 
33. done

C. All income is reported and calculated based on US tax law with a credit given against your tax liability for the taxes paid to India. The amount you paid India may not match up with the US tax system for the credit.

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