How to report foreign tax if the tax rates are different for each type of income?
I have income from a foreign country. The tax rates are different for different sources of income there eg: stocks are taxed at 15%, dividends are taxed at 0%, interest taxed at 20% etc.Also there is a deduction applicable on the income (much like standard deduction in US).
How do I report these income to IRS?
- Should I use the effective rate of tax I paid in that country and use that single rate to find out taxes on each sources?
-or Should I be reporting each item's tax as is and find out a way to report the deduction I got there?