Hi Nelsona, as you may recall, I'm in correspondance w CRA over the issue of ND severance tax as applied to FTC. I've rec'd a 'yes letter' and a 'no letter' therefore have requested a senior agent w foreign tax experience to review this situation ... remaining hopeful for satisfactory resolution
My Question:
I have read the tax convention w respect to a US citizen w CA residency. I wonder if you would comment on this rule as it applies to taxation in both countries on the ND state mineral rights income I rec'v?
What it says to me is,
I file as I have been doing in the US, then file w CRA and claim FTC based on US taxes paid. The rule appears to say I am allowed to, subsequently refile w IRS and request a refund for the CA tax paid that is in excess of the US tax previously paid. According to the rule, I would not be obligated to inform CRA of the US tax refund rec'd. The difference could be about 5% in my favour. Is this interpretation correct?
Thx Nelsona
drmi
Art XXIV Rule 4 US/CA convention
Moderator: Mark T Serbinski CA CPA
No that is not the meaning of that paragraph at all.
Any reaon you aren't adding this post to your previous thread. It would make things so much easier.
You now have FOUR threads on this same issue.
have you been denied the IRS tax paid on these gains? I don't think so. All that has been denied is the ND severance tax, because they say that this is not a covered tax. That paragraph doesn't addres this.
Any reaon you aren't adding this post to your previous thread. It would make things so much easier.
You now have FOUR threads on this same issue.
have you been denied the IRS tax paid on these gains? I don't think so. All that has been denied is the ND severance tax, because they say that this is not a covered tax. That paragraph doesn't addres this.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
You said: "I am allowed to, subsequently refile w IRS and request a refund for the CA tax paid that is in excess of the US tax previously paid."
No, at most you would be allowed to claim (by re-sourcing the income", the difference between what you PAID in US, and what you SHOULD HAVE PAID in US if you were not a US citizen. What you paid to CRA really has northing to do with it.
The rest about refiling and all doesn't make sense.
No, at most you would be allowed to claim (by re-sourcing the income", the difference between what you PAID in US, and what you SHOULD HAVE PAID in US if you were not a US citizen. What you paid to CRA really has northing to do with it.
The rest about refiling and all doesn't make sense.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
I apologize for reposting under a different subject. Is there a way I can delete this and post to the original subject?
On my 1040 I report on line 17 w att sch E supported by 1099 and claiming depletion at 15% on line 18. Depletion deduction results in less tax to IRS. I have not claimed depletion as an investment expense in CA. It has been next to impossible to find someone who is certain about how depletion for CDN residents on US mineral rights is treated. The FHOA - freehold owners in CA - doesn’t deal with mineral rights for Canadian residents on US mineral rights and I have had numerous calls to CA's as well. I have been told that CRA's role is to interpret the tax law and in my case that means through the rules of the tax convention - foreign investment income (so I've read and re-read and obviously not understood) and not as canadian mineral rights.
Yes Nelsona, you are correct, the issue remains ND Severance tax not Federal but ALSO ALLOWABLE INVESTMENT DEDUCTIONS. From CRA I have received a 'yes letter' to severance tax as covered and also a 'no letter' to severance tax as covered. I have followed up w one conversation (Dec 4th) w an international CRA agent who was quite supportive but admitted she did not know; she did give me helpful process advice. I did re-submit w her suggestions. My 90 day deadline to formally file a dispute is quickly approaching. Needless to say at this point but my confidence in CRA's interpretation of my foreign tax income is low.
On my 1040 I report on line 17 w att sch E supported by 1099 and claiming depletion at 15% on line 18. Depletion deduction results in less tax to IRS. I have not claimed depletion as an investment expense in CA. It has been next to impossible to find someone who is certain about how depletion for CDN residents on US mineral rights is treated. The FHOA - freehold owners in CA - doesn’t deal with mineral rights for Canadian residents on US mineral rights and I have had numerous calls to CA's as well. I have been told that CRA's role is to interpret the tax law and in my case that means through the rules of the tax convention - foreign investment income (so I've read and re-read and obviously not understood) and not as canadian mineral rights.
Yes Nelsona, you are correct, the issue remains ND Severance tax not Federal but ALSO ALLOWABLE INVESTMENT DEDUCTIONS. From CRA I have received a 'yes letter' to severance tax as covered and also a 'no letter' to severance tax as covered. I have followed up w one conversation (Dec 4th) w an international CRA agent who was quite supportive but admitted she did not know; she did give me helpful process advice. I did re-submit w her suggestions. My 90 day deadline to formally file a dispute is quickly approaching. Needless to say at this point but my confidence in CRA's interpretation of my foreign tax income is low.