There is nothing you can do about the ND tax, other than what I suggested before: to possible file an ND return to lower the overall rate. It may be non-refundable, but you, as US citizens are allowed to file an ND tax return to lower it
Now, as to Cdn treatment. I would argue that the article XII does not apply in this case. That is royaties from books, software etc. Mineral rights fall under Artcle VI. Did you use the term "Royalties" in describing the income. ND's definition does not necessarily coincide with the treaty (or canada's definition). There is no limit on tax credit for the tax on US Real propertry income. If you read that article it describes your situation exactly.
US citizen, PR in Canada, oil royalty income from US
Moderator: Mark T Serbinski CA CPA
I did file ND state tax, as you previously suggested; it's a requirement as a US citizen. ND has confirmed the tax as non-refundable production tax.
On my CDN return I clearly stated the nature of this 'other income' as royalty from mineral rights. I also attached ND state docs (1099) to verify. I will reply to CRA.
I find it surprizing that a reprentative of CRA is unfamiliar w various articles of the treaty that differentiate royalties. I also am surprized he'd take a strong enough position to place his ignorance in writing.
Thx so much, you help us sleep well at night
drmi
On my CDN return I clearly stated the nature of this 'other income' as royalty from mineral rights. I also attached ND state docs (1099) to verify. I will reply to CRA.
I find it surprizing that a reprentative of CRA is unfamiliar w various articles of the treaty that differentiate royalties. I also am surprized he'd take a strong enough position to place his ignorance in writing.
Thx so much, you help us sleep well at night
drmi
depletion allowance
Hi Nelsona ... a further question regarding oil royalties from ND
Regarding IRS, I can take a depletion allowance of 15% of our share of gross royalties and a transportation allowance as shown on 1099 statement. How can I claim depletion w CRA on T1?
May I reduce gross revenue at line 104 accordingly? ... or is it a development expense at line 224 ... or may I make a claim under the general catagory 'other employment expense' at line 229. obviously guessing!
drmi
Regarding IRS, I can take a depletion allowance of 15% of our share of gross royalties and a transportation allowance as shown on 1099 statement. How can I claim depletion w CRA on T1?
May I reduce gross revenue at line 104 accordingly? ... or is it a development expense at line 224 ... or may I make a claim under the general catagory 'other employment expense' at line 229. obviously guessing!
drmi