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I want to give permissions to a specific user on a remote machine on my local network. In the Select Users or Groups dialog the From This Location field is locked to my computer, when I click the Locations... button the only option in the list is again only my own machine. How can I add a remote computer there so I can select users from other machines?

The remote computer is in my Homegroup, and same Workgroup, generally I don't have problem with file sharing, IP networking, etc. Just need to find a way to get permissions to specific users on that computer.

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You could create a dedicated user on the remote machine, tell its password to the other users and have them map a drive (net use command) with the credentials you gave them (For a business environment you can also install windows server and set up a domain controller). – BornToCode Feb 4 at 3:32

You can't. Your computer does not have knowledge of the users in the remote system. In order to provide permissions for a specific user, you must create a user on your local computer and give the credentials to the (human) user of the remote system.

The From This Location field is a feature to locate users in another domain or organizational unit and can't be used to select another computer.

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But how do I create a user on your local computer and give the credentials to the (human) user of the remote system? – jp2code Nov 18 '12 at 13:01
You can add users to your local Windows 7 compter in Control Panel -> User accounts – shufler Nov 19 '12 at 16:08
yes, but the remote machine won't be able to connect as that user you added from control panel, from the exact same reason - it's on a different location so it won't recognize any user not directly on it? Is there any way to connect as a user not in your location? – BornToCode Feb 2 at 21:55
@BornToCode the remote user must use an account that is known to the local computer when connecting to the local computer, i.e. LOCALCOMPUTER\username, not REMOTECOMPUTER\username. – shufler Feb 2 at 23:47
Small caveat: don't try to set permissions for password-less users. It won't work even though "Password protected sharing" is turned off. You can, however, set permissions for group Everyone, which will include password-less users. Don't forget to set "Password protected sharing" off. – Chris May 22 at 14:33

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