Land Sale in India and foreign tax credit

Forum|Forum|3 years ago
April 17, 2023
1 reply
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I sold personal land in India in 2022 and have a Long Term capital gain for which I have paid approximately 20% in taxes there. Even with online help, we were unable to locate where to get a credit for taxes here. I was told I need to buy the "desktop version" of TT as online version does not have form 8949 (We did use tools and looked up and the form was missing). In addition to this, I also have Interest and dividend income from India. I use Turbo Tax online self employed. If someone can guide me on getting credit without downloading a desktop version, please let me know. Of course, I have filed for extension as I did not want to rush through the process.

TurboTax Self Employed Online

DaveF1006

You will need to claim a Foreign Tax Credit by;

Go to federal>deductions and credits>estimate and other taxes paid
Foreign taxes >start
When you reach the screen Do You Want the Deduction or the Credit? select the option you prefer for your situation
Continue past the worksheet
Next select passive income
Next in the Country Summary Screen add India.
Next screen will ask you for gross income, enter the gross amount of your sale..
Leave the expenses as this may limit your Foreign Tax Credit.
Now enter the amount of Foreign losses if you have any.
Next screen will have you report the amount Foreign Taxes you paid on the sale and the date paid.
If there is any foreign source dividends or long term capital gains on the sale, report that in the sections of your return entitled Any foreign source qualified dividends or long term capital gains.
Scroll through the rest of the questions until you are done with this section.

As far as not having a 8949 form, it depends on how you reported the sale. The best way to report and generate a 8949 is to report it like an investment sale.

Go to federal>wages and income>
Investment income>stocks, mutual Funds>Bonds>Other

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Achar1992Author

Thank you. But I have done this and it takes me to the question- "Did you pay taxes on income you made while working outside the U.S.?" The moment I say no, it just kicks me out of there. The only tax credit I am getting is for the other foreign interest and dividend income, but not for land sale. Again to clarify, this is on the Turbo Tax "Online" version. In the "tools" section (After I complete the Land sale in the investment sales section), I don't even see a 8949 form to select. I was told that Online version does not even support this form.

ThomasM125

Form 8949 will be populated in the online version of TurboTax when you report the sale of an investment. You designate your foreign income as General category income.