Do I need to pay income tax on the interest I earned on foreign investments?

I have an house in another country and at moment I am renting it.
Do I need to pay tax on the rental income? Do I need to declare that I own an house in another country? At moment I already paying tax in that country.
Thanks for your answer.

Yes, I am in US and I live and work here. The house in another country and I pay already tax on the propriety and I already pay tax on the money that I earn for the renting.

Anyway, how can I found in US one rofessional tax preparer. I was thinking to use Turbotax software also.


7 Replies to “Do I need to pay income tax on the interest I earned on foreign investments?”

  1. I’m assuming you’re in the US.

    Yes, you need to declare the income, I don’t know if you need to pay taxes on it (depends upon country and what treaties they have with the US, it may count as a credit).

    See Charles Rangel of NY.

  2. You will get 1099 from the foreign bank, and you can show the tax paid to the foreign country as tax credit in your US tax return.

  3. As an American, you need to pay taxes on your worldwide income. Whether your foreign rental income creates a tax liability or not, you just have to do the math. Sch-E. Frequently, even if you have a positive cash flow, rentals actually have a “paper” loss.

    You can either claim the foreign tax as a credit (usually better) or as an itemized deduction.

  4. You need to see a professional tax preparer or look it up. You do need to claim all income from worldwide sources. There is a foreign income exclusion and there is a foreign income tax credit. Under certain circumstances you can exclude the income. If you do not exclude the income then you can get a tax credit.

  5. As a US Citizen you have to report all your worldwide income.
    If the income is subject to tax by another country and we have a tax treaty with them , then you can either tax credit for taxes paid to another country as a credit on form 1116 or as an itemized deduction under taxes, whichever gives you the .best tax benefit

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