Bad news about the "Net Investment Income Tax"

[nelsona]

Marcharry, yes, W-9 is what you should use (it might even stop the withholding), but don't let that stop you from including that withholding on line 62. Why would IRS not credit you with this money? It was sent to them in your name. IRS doesn't care if Canada credits you for this, that's CRA's business.

NOw, as I said, CRA will only credit you with the actual tax that you owed on the dividends, not the flat withholding. Since I'm quiye sure your effective tax rate in US is less than 15%, you can't use the 15% rate as ftc

[marcharry]

I understand what you are saying, up to now I am fairly sure that I have always claimed total withholding tax which is stated on the T3/T5. After all, there is a a box for it! Of course that does not mean that the CRA would accept it under scrutiny.

Of course, your answer implies that there are years of withholding tax that I paid to the IRS that potentially claimable.

One important question - do you think there is any downside to using a W-9? I already file fbar etc. ?

[nelsona]

By Cdn rules, you MUST file a W-9 to correctly identify yourself as a US taxpayer. Your W8-BEN was improper.

[marcharry]

I hear you on the W-9. To your point it will have the added benefit of stopping the withholding tax. Even though it is a joint account with my NRA wife I will claim all of the assets in the account so that she does not have to file with USA.

I also have investments in a foreign controlled corporation (my small business). I have always filed a 5471, but I have not always filed an 1120f. I need to file an 1120f. The corporation can legitimately file a W-8 BEN with an ITIN - it has no operation in the us and claims treaty protection. But witholding tax in a corp is mostly lost in CDA. Will filing an 1120f actually return the withholding tax? Anyone had that experience?

[eloboostlol]

For this you think that I agree, I also think so, we are the same.




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