Serbinski Accounting Firms

OK, I think I understand now. Thank you for taking the time to write out this clear and detailed explanation. I appreciate it. Taking the FTC on 1116 (passive) for the 10% Czech tax does mostly eliminate the US tax liability for this income, at least at my current income level. So just to sum up, in...

So just to be clear, what you're saying is that even if income from a third country is re-sourced by treaty to Canada, the IRS will not recognize it as Canadian-sourced income for the purposes of avoiding double taxation through a FTC. Correct?

Thank you for your response.

I don't believe that the US-Czech treaty applies, because not a resident of either country. For what it's worth, though, this treaty has a similar sourcing provision for interest, but doesn't allow the Czechs to impose the 10% tax.

Dual Canadian/US citizen, resident of Canada. Only income is from earned income in Canada (below the FEIE limit), plus US and Czech bank interest (above the US standard deduction). The Canadian-Czech tax treaty (Article 11) says that interest income is “deemed to arise” in the country of residency (...