How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Barbara Your Own Question
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3353
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
Type Your Tax Question Here...
Barbara is online now
A new question is answered every 9 seconds

I submitted tax return as a US resident alien first time,

Customer Question

I submitted tax return as a US resident alien for the first time, but I forgot to report rental income from Greece. This rental income was never transferred to the US, and it is actually used by my parents. It is being reported in Greece, and I paid taxes for it in Greece for the tax year 2015. I want to amend my US tax return (I think it is needed), to report that income, but I am not sure what to do: I read the US-Greece tax treaty regarding rental income and it seems to me I can claim the tax treaty (Article VIII), so that I can avoid double taxation. I used turbo tax to file my taxes, and it would be great if I could use turbo tax again to amend it (even though I know I might not be able to efile the amendment). From online search, I found this to be relevant:
Even though, the above link is related to "US-Germany tax treaty", it seems that a similar provision exists in the "US-Greece tax treaty". I would like a verification if my understanding is correct.
And if I am correct, where do I report this positive and negative income in turbo tax?
Option 1:
Do I add it in the "Other reportable income" section in TT, and add my own description: One entry with the positive income explaining it is from a rental in Greece, and one entry with the negative income explaining that I am using the US-Greece tax treaty?
Option 2:
Or, do I add the positive income in "Rental properties and Royalties (Sched E)", and the negative in the "other reportable income" as described above?
In either option, I will need to fill an 8833 Form correct?
Thanks a lot for your help!
Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.

Hi. My name is ***** ***** I will be happy to help you.

Yes, you will need to amend your tax return. As US resident for tax purposes you need to report your worldwide income. You will claim the rental income and all associated expenses on Schedule E. If you the income was already claimed and taxed in Greece, you can claim foreign income tax credit (no treaty required) on form 1116.

You can use Turbo tax to generate your amended return 1040X. You will have to sign it and mail it to the address Turbo Tax will provide to you.

Expert:  emc011075 replied 1 year ago.

any questions?

Customer: replied 1 year ago.
Hi Eva, thanks for answer. I tried with Turbo tax to claim foreign income tax credit, and it is significantly low, which looks strange to me; the credit is one tenth of what I paid as taxes in Greece for that rental, and Turbo tax asks even more than these taxes to pay in the US. In the end, summing up both taxes (to Greece and US), I would pay more 50% of that income! It does look like double taxation to me, and it doesnt look like the right way to report this income. Also, it is not the same as the answer given in the link above. Why is it wrong what it was adviced in that link?
Expert:  emc011075 replied 1 year ago.

Sorry, I didn't see the rest of the question. Your credit should be what you paid in taxes in US equivalents (US $) unless you do not have enough tax liability to absorb the credit and you have credit carryover. You should not be adding any other reportable income if you claim the rent and all expenses on Schedule E. You are not doing something right.

The problem with your approach is that Turbo Tax doesn't support form 8833 so it will not generate a correct tax return. If it is first your first time filing US taxes and have limited tax knowledge, you really should consult a tax professional. Turbo Tax is just a tool, it can handle everyday issues but nothing more and it will never replace a knowledgeable tax professional.

I do not use Turbo Tax so I will opt out. Maybe other expert has some experience with the retail version of Turbo tax.

Expert:  Barbara replied 1 year ago.

Different expert here - my name is ***** ***** please allow me to provide you with additional information.

You are correct that you will enter the rental income and expenses on Schedule E. There is a specific interview question regarding whether the property is foreign. Based on the information you provided, it appears that you may not be entering the information correctly or in the correct section of TurboTax.

If you still experience difficulty after following the instructions in the above links, my best advice would be to contact TurboTax directly and speak to a Tax Advisor who will walk you through the amendment step-by-step. The Tax Advisor will be able to join in with you and view your tax return to guide you.

You can contact TurboTax Monday through Friday between the hours of 8:00 am and 5:00 pm (Pacific time)/11:00 am and 8:00 pm (Eastern time). The number is(###) ###-####

Please let me know if I can assist you further.

Thank you and best regards,