I am a dual citizen living in QC. My brother who lived in the U.S., died in 2016. I was paid back a loan (Promissory note) owed to me by my deceased brother when we finalized his estate and sold his home in 2017.
I was told to report the interest earned from the loan on my returns. Is this treated as any other interest income - first being taxed in Canada and then re-sourced and credited in the US for taxes paid in Canada? Is there any special reporting I should know about?
Paid back loan owed to me - interest income
Moderator: Mark T Serbinski CA CPA
That is almost correct: US-sourced, but would not be table in US but for the fact that you are USC.
Report on both returns, no credit given in Canada, re-sourced 1116 to reduce the US tax to zero (not based on Cdn tax).
So, if that income gives rise to $10 tax in Canada, and $4 tax in US, the 1116 will be used to reduce the US tax by $4.
Report on both returns, no credit given in Canada, re-sourced 1116 to reduce the US tax to zero (not based on Cdn tax).
So, if that income gives rise to $10 tax in Canada, and $4 tax in US, the 1116 will be used to reduce the US tax by $4.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: Paid back loan owed to me - interest income
As most of us know, repayment is the act of paying back money previously borrowed from a lender. Interest rates are charged based on a contracted rate and schedule for the time that passes between when a loan was given out and when the borrower returns the money in full. When it comes to home mortgages, payments are reduced or suspended for a set time if a mortgage goes into forbearance. I think that might be your case since this type of loan doesn't usually offer any interest income. I learned that when I was in the same situation with https://hurtigudbetaling.dk/ , the company which helped me get my loan.
Re: Paid back loan owed to me - interest income
I am not a professional in this field, and I can't help you with a proper answer to your question. But many companies on the internet can help you solve your problem. If you are interested, visit Mortgage Advice Doncaster website for more information. There, you can find a mortgage advisor who will be glad to help you with anything you want. Also, you can find help if you face problems taking a loan. Visit https://doncastermoneyman.com/ for more.
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Re: Paid back loan owed to me - interest income
Sorry to hear about your brother's passing. Regarding loan repayment, it's always a good idea to report any interest income on your tax returns. In terms of taxation, it usually follows the general rule of being taxed in Canada first, and then you may be able to claim a foreign tax credit in the US for taxes paid in Canada. However, I'd recommend consulting with a tax professional or accountant to ensure you're handling everything correctly. They'll have the expertise to guide you through any special reporting requirements or specific rules that may apply to your situation. Also, you might want to check out Mortgage Broker in Chester ( https://liverpoolmoneyman.com/mortgage-broker-chester/ ) regarding loans and taxes.
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Re: Paid back loan owed to me - interest income
In general, interest income is usually subject to taxation in the country where you are a tax resident. As a dual citizen living in QC, you would typically report the interest income on your Canadian tax returns. However, since this involves cross-border transactions, it can get a bit complex.
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Re: Paid back loan owed to me - interest income
It's important to understand the tax implications of the interest earned from the loan. Regarding the interest earned from the loan, it's important to consult with an expert or a tax professional who can provide accurate advice specific to your situation.
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Re: Paid back loan owed to me - interest income
Financial questions like these can be tricky, and it's always better to seek guidance from professionals who are well-versed in tax regulations. You may consider reaching out to a Mortgage Broker in Cheltenham ( https://bristolmoneyman.com/mortgage-broker-cheltenham/ ), as they might have insights or connections to tax experts who can assist you.