Question
How is overseas income taxed in the US?
If you have an overseas income (for example, if you're paid royalties for a patent) how do you record it for US tax purposes? Do you put down your total overseas income, or just the portion that you actually get after you've paid local taxes? Also, do you use the current exchange rate, or the rate at the time that the income was received?
2 months ago - 3 answers
Best Answer
Chosen by Asker
you are taxed on world wide income you report gross receipts exchange rate at time of receipt(or will your statement reflect this difference?)
by tro
2 months ago
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Other Answers
Royalties go to Schedule E page 2. I would put down the net received after taxes. Otherwise you would claim the entire amount and deduct the foreign tax paid. Presumably it would be the rate when received.
by Big Woof- 2 months ago
The full amount shows as income on your return, but you get a foreign tax credit for the tax paid to the other country. You use the exchange rate at the time you got the money.
by Judy- 2 months ago