re-sourced interest

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jayroh
Posts: 8
Joined: Mon Jun 12, 2006 10:17 pm

re-sourced interest

Post by jayroh » Wed Apr 10, 2019 12:41 pm

dual national living in Canada. Is all U.S. sourced interest treated like Bank interest and re-sourced to Canada? Interest reported on a 1099 received from a registered Canadian securities company? Interest received from holding a mortgage in the USA? Thanks

nelsona
Posts: 15980
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: re-sourced interest

Post by nelsona » Wed Apr 10, 2019 2:09 pm

The criteria for something to be re-sourced is: Would this be reported on a 1040NR?
US bank interest is NOT, thus Canada will not grant tax credit, thus it is re-sourced.
Mortgage interest would, since it is effectively connected income (the property in US), and Canada would grant a tax credit, so no need to re-source.
For the portfolio interest, is The firm withholding tax on this interest (ie. treating it like a dividend)? If not, then it is like bank interest, with tax not creditable in Canada, and re-sourcing available. If the firm IS withholding, then they would also do so for a Cdn, and thus the tax credit claim goes on your Cdn return, no re-sourcing needed.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

jayroh
Posts: 8
Joined: Mon Jun 12, 2006 10:17 pm

Re: re-sourced interest

Post by jayroh » Wed Apr 10, 2019 2:31 pm

Thank you for your clarification.

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