Foreign income

[Gary]

I have clients that have green cards. They have a rental house in Israel, and also sold their primary residence in Israel. I assume that I treat these in the usual way, i.e. a schedule E and same Sale of Home rules.

I have not found out if they pay any taxes in Israel for these two activities, but are there any questions i should ask? I assume that the Foreign Tax Credit would only appy if they pay any taxes for these two activities on an Income Tax Form in Israel.

Any advice would be appreciated.

Gary

[Snaggletooth]

Right Track

Gary I was hoping you would get an answer from someone more knowledgeable than me, but maybe by answering your post, it will shake the tree, and others will come forward.

You are clearly on the right track. I'm assuming both man and wife are living in US, as if one of them is not here, there are big complications, such as having to claim MFS filing status if not willing to claim spousal income.

One of the sticking points may be whether they actually received income while living here, or whether the income stayed in Israel. If rent actually was deposited in an Israeli bank, is it taxable here? I don't know. It would be taxable if this couple were citizens.