A fellow (a US citizen / Canadian resident) self-financed the sale of a US property to a US citizen/resident. Unfortunately, the purchaser has subsequently decided not to pay any more (obviously this matter is being addressed, but they only paid 1/2 of one monthly payment during 2010.
Am I to understand correctly that this income will no longer be taxable in the US under the recent change to the treaty?
If not, must this be reported on an accrual basis on the US return. Obviously it would need to be reported on the Canadian return under the annual accrual method, since. Is there any provision for a "bad debt"-type reduction on either (or both) returns?
Mortgage interest received by Canadian resident from US res
Moderator: Mark T Serbinski CA CPA