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    helguson's Avatar
    helguson Posts: 1, Reputation: 1
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    #1

    Feb 11, 2007, 05:37 PM
    Capital gains abroad - FTC?
    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
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Feb 11, 2007, 10:36 PM
    STRONGLY suggest you get professional tax help! I think you are in over your head!
    taxsearcher's Avatar
    taxsearcher Posts: 222, Reputation: 8
    Full Member
    		  
    #3

    Feb 12, 2007, 08:44 AM
    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.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    Feb 12, 2007, 10:41 AM
    TaxSearcher:

    Here I am ATE. ATG is the OTHER forum! :-)
    taxsearcher's Avatar
    taxsearcher Posts: 222, Reputation: 8
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    #5

    Feb 12, 2007, 11:09 AM
    I think I'll go with AT* from now on to be safe ;)
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #6

    Feb 13, 2007, 10:31 AM
    Sounds like a plan!
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