Thank you for your reply. It is not a qualified dividend. He is based in UK and has a limited company where he withdraws some salary and some dividend.  And apparently every time I enter dividend in system the ACTC goes down and when I remove it he gets the full amount.   

Thank you for your reply. I understand the concept. But I need to explain to the client that more the dividend income lesser the ACTC. I need to establish a link between the two so I can explain to the client why he is not going to get full ACTC even his AGI is below the phase-out threshold. 

So the taxable gain on the foreign mortgage would be $221,436.64. Which i would report on line 21. Correct?         £793,065.25 0.6432  $       1,232,999.46         £793,065.25 0.784  $       1,011,562.82      $          221,436.64

I have read this in your original reply "This gain is computed with each principal repayment and not only at the sale of the home." So I need to go back and calculate the gain in each month on the principal amount  (not interest) and calculate gain to add in the total gain. as the loss is not allowable anyway. right?    No, it is not right.  I don't think you can rationalize to yourself (or to your client) this is what he/she has for foreign currency gain.  You may like to do a bit more research.  I have read on about 10 different places and they have calculated the gain same way I showed in my calculation. If you think it is wrong, could you please explain specifically what is wrong with this calculation and how can I calculate it correctly? 

Hi itonewbie Can you please confirm if I am doing it right:  Mortgage at the beginning at April 2011     1,129,685.00 0.6432           1,756,351.06 Mortgage at the closing at 31 dec 2019         793,065.25 0.784           1,011,562.82 Gain on Foreign Mortgage                      744,788.24    I would report $744,788 on line 21, is this correct? Is this also subject to NIIT Form 8960? if yes, on which line? the last question, do I need to calculate the gain on his monthly payments he made in all these years?