# Double Tax Treaty for Real Estate Capital Gains



## nick_hagl (Dec 23, 2020)

I am new to the forum and looking through it I have not seen anything specific to what I am looking for, however I apologize if this has already been addressed somewhere:

I know there is a double taxation treaty between Germany and the USA in which it states that "Income derived by a resident of a Contracting State from real property situated in the other Contracting State may be taxed in that other State" 

My question though is whether I still have to report such income (real estate in Germany already taxed in Germany) on my US Tax Return?
The follow-on question is, if i have to report it what is the impact of such gains on the rest of the income from the USA?

Thanks for your input...


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## Bevdeforges (Nov 16, 2007)

Generally speaking, you are supposed to report "worldwide income" in full on your US tax return. How you claim credit for having paid income tax in Germany (or any other country) usually comes back to claiming the Foreign Tax Credit (FTC) for the tax paid to the "other country." Practically speaking, that doesn't always work, particularly because for FTC purposes you have to apportion your income and your foreign income tax paid by type of income.


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