Hello,

I'm resident alien in the US.
I have a brokerage account in Europe and I sold stocks there in 2006. Obviously, I have no IRS forms but I paid local tax (28%) for the long term capital gains.

My impression is that I can claim the foreign tax credit for the foreign taxes I paid in Europe.

I don't know how to claim it. (I'm using Turbotax). I reported the capital gains in investment section (along with domestic capital gains) but there was no space to report the foreign taxes.

I assume that I have to fill the Foreign Tax Credit section separately.

Is this "passive income" ? (IRS instructions do not mention capital gains here, they only talk about interest and dividends etc).

Should the foreign tax paid ($2,200) lower my US taxes? At least Turbotax does not currently show any reduction (i.e. the refund remains the same even though I entered 2200 foreign taxes paid in FTC section)

Should I also report the capital gains again (as other foreign income) in FTC section in Turbotax?


Any help appreciated how I can claim the FTC for foreign capital gains.

Thanks

STRONGLY suggest you get professional tax help! I think you are in over your head!

This is a really complex issue. You probably should not have been paying foreign capital gains taxes (see the relevant treaty for the country where you made the sales).

I agree with ATG. There is a lot more to this than it would first appear including a variety of tax issues that many people know little or nothing about. You need a professional and you definitely need one that specializes in international tax issues.

TaxSearcher:

Here I am ATE. ATG is the OTHER forum! :-)

I think I'll go with AT* from now on to be safe ;)

Sounds like a plan!