Welcome back! Ask questions, get answers, and join our large community of tax professionals.
- Topics
- Training
- Community
- Product Help
- Industry Discussions
- User Groups
- Discover
- Resources
Turn on suggestions
Auto-suggest helps you quickly narrow down your search results by suggesting possible matches as you type.
Showing results for
- Intuit Accountants Community
- :
- Lacerte Tax
- :
- Lacerte Tax Discussions
- :
- Client has gains from the sale of a Canadian stock. He also has a large foreign tax credit carryover. How do I report a foreign gain so it will be included on Form 1116?
Client has gains from the sale of a Canadian stock. He also has a large foreign tax credit carryover. How do I report a foreign gain so it will be included on Form 1116?
Options
- Mark Topic as New
- Mark Topic as Read
- Float this Topic for Current User
- Bookmark
- Subscribe
- Printer Friendly Page
bethbrake
Level 2
02-23-2021
03:36 PM
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Labels
This discussion has been locked.
No new contributions can be made. You may start a new discussion
here
3 Comments 3
itonewbie
Level 15
02-23-2021
07:23 PM
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
If it's really foreign source, it'd be on Screen 35.1 and you may need to adjust for capital gain tax rate differentials. But the real question is: Where is the taxpayer's tax home at the time of disposition?
---------------------------------------------------------------------------------
Still an AllStar
Still an AllStar
bethbrake
Level 2
02-25-2021
04:18 PM
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Thank you for your response. My client is a resident of FL. He is also reporting currency losses from the exchange between CA and the US. There does not seem to be an intuitive place on Screen 35.1 - unless its other foreign source income. He did not have taxes CA withheld on the sale in CA of the stock - I am trying to increase his foreign source income to use his FTC carry forward. Therefore I don't think I need to make a capital gains adjustment . I find the instructions to Form 1116 vague and confusing. Thank you!
itonewbie
Level 15
02-25-2021
06:49 PM
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
@bethbrake wrote:
My client is a resident of FL.
But my question is not about tax residence but tax home. Your client may be a tax resident of FL but the fundamental question is where your client's tax home was.
He did not have taxes CA withheld on the sale in CA of the stock
Whether foreign taxes were withheld is irrelevant. Tax home is what determines whether gains/losses from stock sale and §988 transactions are US or foreign-source.
I am trying to increase his foreign source income to use his FTC carry forward. Therefore I don't think I need to make a capital gains adjustment . I find the instructions to Form 1116 vague and confusing.
Did the sale of stock result in STCG? If not, adjustment needs to be made to account for the tax differential unless certain conditions are met. What is your technical basis for thinking that no adjustment would need to be made?
@bethbrake wrote:
He is also reporting currency losses from the exchange between CA and the US.
How did these foreign currency losses arise? A bit more context would help.
---------------------------------------------------------------------------------
Still an AllStar
Still an AllStar
