How does one distinguish between "non business foreign income" and "net income". For a U.S. citizen is "net income" the adjusted gross income or income after taking itemized or standard deductionz.
what amont do I insert in the foreign tax paid/base tax portion of the formula?
I Thank You All so much.
Foreign tax credit non business income VS net income
Moderator: Mark T Serbinski CA CPA
Since you are using the term "non business foreign income" you must be talking about calculating the foreign tax credit on your Cdn tax return.
Therefore, the definition of "net income" is the Canadian definition. It is listed right on the calculation form (line 236 plus or minus whatever applies in your case).
Therefore, the definition of "net income" is the Canadian definition. It is listed right on the calculation form (line 236 plus or minus whatever applies in your case).
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Thank You. Yes, it is a Cdn return I'm studying but the only source of income would be U.S. So what is net income? Is it income after US adjustments?
Also what is meant by "base tax" in the same formula?
Example data:
US Gross Income convert to Cnd $ = 63,000
U.S taxes on adjusted income: $6,300
Take Standard deduction with 3 dependants (spouse and teo normal dependants under age 10.
How do I plug in this data?
Also what is meant by "base tax" in the same formula?
Example data:
US Gross Income convert to Cnd $ = 63,000
U.S taxes on adjusted income: $6,300
Take Standard deduction with 3 dependants (spouse and teo normal dependants under age 10.
How do I plug in this data?
If your only source of income is from US then your foreign income and your net income will be identical.
cabada doesn't care aabout the definitions in US. You fill out your Cdn tax return using the definitions for canada. US adjustments mean nothing to canada.
All Canada wants to know is your INCOME (by Cdn definition), what portion of that income is from US, and the final tax you paid in US. It does not care what steps the IRS takes to determine your US tax.
By the way, if you are a student, you may not have to be paying tax in both countries. If you are a US citizen studying in Canada and receiving grant money from US, it is likely exempt from Cdn tax.
If you are a Cdn citizen studying in US, and your family is with you in US, and your grants are coming from US, then you quite possibly are no longer a tax resident of canada, and should not even be reprting your US income in Canada (unless you are on F or J status).
If however, you are studying in US and your family is in canada, then, yes, you should report in both countries, the result likely being that you will owe no tax federally, and a little tax to your province.
cabada doesn't care aabout the definitions in US. You fill out your Cdn tax return using the definitions for canada. US adjustments mean nothing to canada.
All Canada wants to know is your INCOME (by Cdn definition), what portion of that income is from US, and the final tax you paid in US. It does not care what steps the IRS takes to determine your US tax.
By the way, if you are a student, you may not have to be paying tax in both countries. If you are a US citizen studying in Canada and receiving grant money from US, it is likely exempt from Cdn tax.
If you are a Cdn citizen studying in US, and your family is with you in US, and your grants are coming from US, then you quite possibly are no longer a tax resident of canada, and should not even be reprting your US income in Canada (unless you are on F or J status).
If however, you are studying in US and your family is in canada, then, yes, you should report in both countries, the result likely being that you will owe no tax federally, and a little tax to your province.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing