reporting sale of foreign property (second home) in Turbo Tax Online

Forum|Forum|3 years ago
September 28, 2022
1 reply
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Sold a Foreign property (second home) and need help with some tax filing questions.

* Can a capital loss in foreign tax filing ( india) reflected in US tax return?? I assume NO.. Even though, it was reported as capital loss in the foreign tax return, US tax filing has different capital gain calculation and shall report a capital gain for the same sale. correct ?

I navigated through the following to report the sale.. I am using On the online Turbo tax edition. Please confirm if this correct.

* Wages & Income

* Investment and savings
* Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
* Other ( land,second homes, personal items 1099-S)

There is no 1099-S on foreign property sale but i still need to choose this, correct ?

* Enter the name of the person or financial institution that brokered this sale

No real estate agent or institution brokered this sale. In this case, Can I enter the name of the Purchaser

* What type of investment did you sell? -> selected second homes

* How did you receive this investment -> Selected purchased it

* Description -> entered the property address

* When did you receive this investment? -> entered the purchase date
Date sold -> Entered the sold date

Proceeds -> Sale price converted into USD using the exchange rate on the day of the sale, correct ?

Total amount paid

cost basis ( purchase price + purchase cost) using the exchange rate on the day of the purchase, correct ?

I can't add the agent fee and home improvement costs since unfortunately i don't have the records/evidences/invoices

Click to next page

paid sales expenses that aren't included in the sale proceeds reported on the form

Can I include cost like Air travel expense for me to travel to India to execute the sale ?

TurboTax Premier Online

Laura_CPA

Hi lovely_bala,

Hope you are doing well! Indeed, you have it all correct and if I may add, if you had paid foreign taxes on the gain of the sale in India, you could have reported a foreign tax credit on your 1040 to offset the double taxation situation.

Cheers,

Laura

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lovely_balaAuthor

Thanks Laura..

As I indicated in the comment, I only incurred capital loss on the sale hence there is no foreign taxes paid.

Though you indicated that i have it all correct.. Can I get a specific comment on the following two items.. Thank you

Total amount paid

cost basis ( purchase price + purchase cost) using the exchange rate on the day of the purchase, correct ?

I can't add the agent fee and home improvement costs since unfortunately i don't have the records/evidences/invoices.. Is that correct ? What other form of records IRS for the items that i can't produce evidence/invoices

Click to next page

paid sales expenses that aren't included in the sale proceeds reported on the form

Can I include cost like Air travel expense for me to travel to India to execute the sale ? Is this accepted by IRS ?

Laura_CPA

Definitely @lovely_bala!

1. The cost/basis is the purchase price in India (then translate it to USD using the date it was purchased, IRS recommends using spot rate and Oanda.com is a good place for that - also checkout: IRS International Taxpayers)

2. The cost basis can be adjusted by adding improvements, costs associated with the sale of the home (including the travel expenses, commission expenses). If you do not have the original documentation to prove these expenses, you can trace them by searching in your bank statements, credit card statements for previous years. In case of an audit the IRS will request for specific documents or any form of document to prove that the expense was a reasonable one in nature.

Hope this helps,

Laura

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