Non resident tax

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

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ainu.afnu
Posts: 13
Joined: Thu Mar 12, 2015 9:47 am

Post by ainu.afnu »

Need help with the foreign income tax paid. Pls correct me if I am wrong:

- For the period (x days) when I was in US but my family was in Canada I am going to show foreign employment income to CRA and pay additional tax to Canada.

- I have to calculate all the numbers in days not in months.

- I will consider my after deduction taxable US employment income for x days and report that as foreign employment income.

- I will use the same after deduction taxable US employment income for x days in foreign tax credit form as Federal non business foreign tax credit on line 433.

- And will use line 431 to report non business tax paid, which is the tax I paid for x days for US federal+ US State

- My canadian rental income as a non resident, I have to declare to IRS and I guess I have to pay some tax to IRS on that. Do I need to report it to CRA again? If yes, where?
nelsona
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Post by nelsona »

You do not use "after deduction" figures for any of this.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
ainu.afnu
Posts: 13
Joined: Thu Mar 12, 2015 9:47 am

Post by ainu.afnu »

Thanks.

In the CRA form Federal foreign tax credit,


- For Non-business income tax paid to a foreign country (431), Should I include US federal tax+ State Tax+Social security Tax+Medicare Tax?

- For Net foreign non-business income (433), is it my after deduction taxable income from U.S Federal return?

Thanks in advance.
nelsona
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Post by nelsona »

These have already been answered elsewhere.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
ruib77
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Joined: Sat Jul 14, 2012 10:17 pm

Post by ruib77 »

Hi,

Can you pls tell me if I am on right track?

I have a rental property in canada. I am doing following for tax returns:

- in form 776, I choose less CCA and CCAed (%) in a way that my net rental income becomes 0 for s.216. And I pay no tax to CRA for rental property.

- For IRA return, I am NOT filling schedule E. Rather I am filling schedule C with their defined CCA of course. I can not change the rate here like I did for CRA.

- Because my tax for rental property is 0 in s.216 to CRA. I am not filling any 1116 to IRA.

Is my strategy correct and optimized? Need your opinion.

Thanks.
nelsona
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Post by nelsona »

That is correct if your US calculated net rental income is zero. If it is more than zero, than consider lowering your CCA rate so as to "generate" some Cdn tax to write against your US rental income.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
sunflower101
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Joined: Sun Apr 03, 2016 4:56 pm

Post by sunflower101 »

Thanks Nelsona!! I have submitted CDN tax returns. I couldn't do this by myself without your help.

I missed the U.S tax deadline and will submit soon. I moved in May,2105 and my family moved in July 2015 with TN/TD. I guess me and my wife will file jointly as residents in the U.S. Am I right?

Thanks.
nelsona
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Post by nelsona »

I have no idea, you have posted nothing about your situation to determine the correct method of filing.

Keep reading other threads, and don't jump on others'.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
ruib77
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Post by ruib77 »

Do I need to include / declare my post move 2015 U.S alien resident income to my canadian return?

Thanks
nelsona
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Post by nelsona »

You only need to declare Cdn-source income that is not supposed to be flat taxed at source for non-residents, which is essentially Cdn wages and real estate cap gains.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
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Post by nelsona »

...post-departure...
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
ruib77
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Post by ruib77 »

Filling up the state (NJ) tax asks when I moved to the state for part year tax. But it only allows to choose any U.S state as previous state. I guess in this scenario we have to choose full year in NJ and go forward. Am I righr?

Thanks.
nelsona
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Post by nelsona »

I don't look at state, but you are only part-year in NJ. The software may not handle it propoerly
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
ruib77
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Post by ruib77 »

[quote="nelsona"]That is correct if your US calculated net rental income is zero. If it is more than zero, than consider lowering your CCA rate so as to "generate" some Cdn tax to write against your US rental income.[/quote]

Need bit clarification on your comment.

Lets say I "generate" $300 Cdn tax to write against $200 in 1116. Then I am loosing some money. Can I write against more in 1116 then what I paid to CRA?
nelsona
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Post by nelsona »

AS I said, because CCA is optional, you can generate exactly ho much tax you need that you can write off in that year. Of course, if you generate more tax than you can use, there is no point.

1116bonly credits you the lower of (a) the average US tax rate on that Cdn source income or (b) the actual Cdn tax you paid/accrued.

So re-read my original response, and it should be clear to you.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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