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Are the taxes paid to a foreign country for the sale of a property in that country deductible from the gains made from the sale of the property when calculating capital gains tax for the US.
ANSWER
The BIDaWIZ Team's Answer:
You wouldn't directly deduct the foreign taxes paid from US capital gains and losses. Rather, you can claim a tax credit for those foreign taxes paid on IRS Form 1116. This amount then flows to Line 47 of your Form 1040.
References: IRS Publication 514 and Internal Revenue Code Section 901
State: Pennsylvania
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