gparch1
Level 3

Calling all Form 1116 experts!  Client sold rental property in India October of 2023.   Client has a long-term capital gain along with recapture of depreciation from the sale of the property.  This is their only capital gain for 2023.  There is no capital gain from US sources for 2023, and there are no dividends from India or from the US. No investment interest is involved.  I am trying to understand if I need to make the "adjustment to foreign source capital gains" mentioned in Pubs 514 and the Form 1116 instructions.   I completed worksheet A included in the Form 1116 instructions, and line 4 shows zero dollars.   Does that mean I do not have to use the multiplier for the adjustment of the capital gain, and I then enter the entire capital gain (including the depreciation recapture amount from Form 4797) on line 1A of the Form 1116?  ProSeries Professional defaults to adding in the adjustment for some reason - not sure why.

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