Not an area I specialize in, but quick research looks promising:
See Subtraction "H":
H. Foreign source income. If federal taxable income includes any amount that is "foreign source income," as that term is defined in § 58.1-302 of the Code of Virginia, and the provisions thereunder, such amount may be subtracted.
Which reference 58.1-302:
"Foreign source income" means:
4. Gains, profits, or other income from the sale of intangible or real property located without the United States;
I didn't look into the citation that @rbynaker provided, which is applicable to corporate tax.
If you are working on individual income tax, modifications to **bleep**I are governed by §58.1-322 of the Code of VA and Chapter 110, Section 141 to 145 of the Admin. Code. §58.1-322 did once provide for a limited foreign source income subtraction (similar to what Rick cited for corporate tax) but that was specifically repealed by the General Assembly effective 2003 and there have since been various rulings denying such subtractions taxpayers tried to claim.
Foreign tax is never deductible for individual income tax returns and is creditable only for retirement income derived from foreign sources as a result of past employment in a foreign country. This means taxes your client paid on the sale of or gain on foreign property will be neither deductible nor creditable on the VA individual income tax return.
Still an AllStar
Thanks Jensen. Just curious, was that an acronym for "Federal Adjusted Gross Income" that got changed to **bleep**I? Took me a bit to figure out why you were swearing at me. 🙂 This new software is pretty asinine. Good thing that word isn't spelled with two s's or I'm sure it would get bleeped too!
Yes, it's F A G I. This is just so frustrating. I just filed a complaint with Intuit.
Still an AllStar