IRS Form 8606 Basis Errors Have No Clear Fix
11 posts across 3 communities since Jul 2026; 64% from r/tax.
“Foreign income is treated the same as U.S. income: goes into its corresponding category (interest, dividends, etc) on the 1040. Curious why no FTC, no tax due on it in NZ? [re: How do I report NZ income to the IRS (ideally for free)?]”
“Since all debts/assets are converted to USD for basis calculation, phantom currency gains are a real problem for those that fall within the US tax system This is a good resource explaining it and other pitfalls…”
“Yes I was going to use the foreign tax credit instead, as I have high income taxes in the other country (multiple times higher than the USA tax). [re: I have foreign income from wages without W2s. I am not using the FEIE, and I was going to enter it on line 1h, "other income"…”
Several posts express frustration and confusion regarding complex accounting tasks, including foreign income taxation, basis errors on forms like the 8606, and navigating career paths within the field. Individuals are seeking clarity and solutions to these challenges.
SOURCES (16)
“Yes I was going to use the foreign tax credit instead, as I have high income taxes in the other country (multiple times higher than the USA tax). [re: I have foreign income from wages without W2s. I am not using the FEIE, and I…”
“As I mentioned in my reply on your other thread, the way the US calculates foreign (non-US) tax paid/accrued on foreign (non-US) income is potentially different from how the UK calculates foreign (non-UK) tax paid on foreign (non-UK) income. As this thread is regarding UK interest income, the FTC is with the US on 1116, so the foreign tax paid/accrued (part II box (p)) is your total net UK tax, apportioned according to the fraction of taxable income (on 1040) that is passive-category foreign-sou”
“Foreign income is treated the same as U.S. income: goes into its corresponding category (interest, dividends, etc) on the 1040. Curious why no FTC, no tax due on it in NZ? [re: How do I report NZ income to the IRS (ideally for free)?]”
“Does anyone have insight on how to get experience doing expat taxes? I currently work full time in financial services, but I want to start working my way into the world of accounting and expat taxes. I was considering finishing an accounting degree and going for the part time H&R Block expat tax advisor position, or a small firm after finishing the EA. I’ve also been told the best way in may be a big 4 global mobility or international tax team after getting the CPA. Anyone have insight on ge”
“Yes, FBAR filing rules apply retroactively for any calendar year your foreign accounts exceeded $10,000 total, even though youre back in the U.S. Dont panic, though the IRS has streamlined compliance procedures specifically for expats who genuinely didnt know about the requirement (non-willful failure) Reconstructing old UK bank records and certifying non-willful status can be tricky, so its often worth consulting a tax resolution firm (like optima tax relief) or an EA/CPA who handles internatio”
“If you work remotely and spend a few months at a time in different countries, how do you actually handle your tax residency? Do you keep your original tax residency, establish one somewhere else, or just deal with it based on where you spend time? Curious how people who’ve been doing this for years handle it in practice. submitted by /u/Personal-Staff3212 [link] [comments]”
“If you have a worldwide taxation setup, you have to have some sort of system for establishing cost basis. If someone bought a house with Turkish Lira (or another high inflation currency), they would have a massive capital gains in Lira You can debate the merits of a worldwide tax setup, but USD basis is the most reasonable way to enforce a cost basis and gain on loan repayment”
“Since all debts/assets are converted to USD for basis calculation, phantom currency gains are a real problem for those that fall within the US tax system This is a good resource explaining it and other pitfalls https://www.bogleheads.org/wiki/US_tax_pitfalls_for_a_US_person_living_abroad “The IRS view is that the individual took out a debt of $150,000 (£100,000 x $1.50) but only had to repay $120,000 (£100,000 x $1.20). The $30,000 of debt no longer owed is regarded as gain and is taxed as ordin”
“I am a (See) PA (afraid of the bots roaming wild on this site) and you are required to worldwide income as a US citizen on your US tax return. However, you can deduct taxes paid to a foreign government, so that you will not be double taxed. This can often be more advantageous that the foreign earned income exclusion.....but in your case foreign tax credit Form 1116 is your best option because the rental income is considered passive. Don't forget to deduct your expenses for the property, whic”
“The FEIE only covers wages and self-employment, not rental income. That's passive, so it doesn't qualify.”
“You need to see a CPA or tax attorney ASAP! Based on your question you likely have lots of exposure to significant penalties.”
“Bank reports it from foreign country. They also dont know what it is or from so its just an asset. That said I got money from inheritance there and my CPA reported the account and amount and I paid no tax on it. Subsequent year I purchased a home and have it as short term rental and I report earnings in portugal, pay my tax, and file extension in US. I then pay tax here and take my deductions and depreciation.”
“Hello, I am going to be a freshmen this year and need help deciding. I have currently put my major in for accounting but with research and more thought have been conflicted into choosing a math major to persue actuary work. I have always liked math and am good at it. But with choosing a math degree i am scared of that just leading me to become a teacher or at a low paying job. But with accounting i like how it is stable and guaranteed pay. With my school also having a really good accounting prog”
“I’m a U.S. citizen and own a rental property in a foreign country. The rental income is deposited into a local bank account in that country and is never transferred to the U.S. Do I still have to report that rental income on my U.S. tax return and pay U.S. income tax on it, even though the money remains in the foreign bank account? If so, can I claim a foreign tax credit or deduct any taxes paid to the foreign country to avoid double taxation? I’m trying to understand how the IRS treats foreign”
“Hey i wanted to share my accounting journey as a 25 year old. I graduated in 2024 with a Finance degree from a non target school. I couldn’t not for the life of me find an entry level job in finance. I started to apply to entry level audit, tax and actuary positions just to see if I got any positive results. I got an offer from a top 10 accounting firm for fall of 2025. so I had a year to burn so I took at the required classes for 150 credit hours and begin studying for the CPA. I passed all for”
“I made a basis error on my first 8606 in 2024, and it has carried forward. I am wondering what I need to do to fix this and hoping I can just alter it in 2026, and not need to file amendments. Prior to 2024 - no traditional IRA contributions (only Roths). In 2024 - made $330 in contributions to a traditional IRA (just sitting in money market since). I incorrectly put the basis on line 2 as $119 (I have no idea why). In 2025 - I contributed $135 to the traditional IRA (still in money market). The”