Form 1116 - Apportionment of Expenses Losses and Deductions

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nielkfj
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Form 1116 - Apportionment of Expenses Losses and Deductions

Post by nielkfj » Sun May 03, 2020 1:12 pm

On form 1116 (Foreign Tax Credit), how are expenses, losses and other deductions that are not definitely related to one category of income apportioned between all categories of income?

Publication 514 (page 13) says:
“… they are apportioned under the principles of the foreign law. If the foreign law does not provide for apportionment, use the principles covered in the U.S. Internal Revenue Code.”

So, does Canadian law have any rules for apportionment of expenses, losses and other deductions?

nelsona
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Re: Form 1116 - Apportionment of Expenses Losses and Deductions

Post by nelsona » Sun May 03, 2020 4:59 pm

No, just use what the software spits out
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nielkfj
Posts: 25
Joined: Fri Apr 17, 2020 2:01 pm

Re: Form 1116 - Apportionment of Expenses Losses and Deductions

Post by nielkfj » Sun May 03, 2020 6:43 pm

I don't have software right now. I am just making a spreadsheet to do the basic calculations for a U.S. return to help me with some investment decisions.

But I take it your point is that you don't know of any Canadian rules for apportionment of expenses, so there likely aren't any.

nelsona
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Re: Form 1116 - Apportionment of Expenses Losses and Deductions

Post by nelsona » Mon May 04, 2020 2:47 pm

It will be prorated.
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nielkfj
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Re: Form 1116 - Apportionment of Expenses Losses and Deductions

Post by nielkfj » Thu May 07, 2020 1:04 pm

nelsona wrote:
> It will be prorated.

I'm not sure what you mean by "prorated."

Do you mean the amounts will be divided amongst the income categories in proportion to the income in each category?

nelsona
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Re: Form 1116 - Apportionment of Expenses Losses and Deductions

Post by nelsona » Thu May 07, 2020 7:19 pm

Yes. Get some software.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

nielkfj
Posts: 25
Joined: Fri Apr 17, 2020 2:01 pm

Re: Form 1116 - Apportionment of Expenses Losses and Deductions

Post by nielkfj » Thu May 07, 2020 9:59 pm

nelsona wrote:
> Yes. Get some software.

Thanks again.

For sure I intend to get software next month when I do my taxes. Right now I am just making a spreadsheet to do some basic tax U.S. tax calculations for some investment ideas I am considering.

nielkfj
Posts: 25
Joined: Fri Apr 17, 2020 2:01 pm

Re: Form 1116 - Apportionment of Expenses Losses and Deductions

Post by nielkfj » Thu May 07, 2020 10:50 pm

By the way, can you recommend a good software package for doing U.S. tax returns for U.S. expats living in Canada?

nelsona
Posts: 16416
Joined: Wed Oct 27, 2004 2:33 pm
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Re: Form 1116 - Apportionment of Expenses Losses and Deductions

Post by nelsona » Fri May 08, 2020 6:54 am

I use txact online, others use turbotax.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

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