Question

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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V

vkazhipu

I made another post on similar issue - https://ttlc.intuit.com/community/taxes/discussion/for[product key removed]t-on-land-sale-in-india/00/3237582

I already have some foreign taxes paid, automatically added when I imported 1099 from financial companies.

1099-DIV

For Land sale made in foreign countries, do we need to report income/expenses in Form 1116 and also in form 8949 capital gains. Would that be double counting?

Here was the scenario

Before starting process I had taxes due - 3138

I entered foreign tax paid of 8157 USD on foreign income 11728 (after expenses and dollar conversion adjustments).

My taxes due is now 723. I got a credit of only 2415 USD even though foreign tax paid is 8157 USD. @DaveF1006

DaveF1006

@DaveF1006 Will enter as foreign tax credit. Hope I still can e-file this. Also gross income they ask in 1116...Is that net amount of land sale or profit I made after all expenses and cost basis?

Yes. You should be able to electronically file. The gross income is the amount you received for the sale of the land either by check or bank deposit.

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