Recently, I was given the option to accept a distribution of $10,000 US dollars from the trust fund of a deseased US relative. Is there a way I can avoid any double taxation from the US and Canada? On my 1040 where would I put this? How about in the Canadian return?
Excuse my lack of knowledge on all thes matters concerning taxes... it is less complicated being poor! :)
US Citizen/CDN resident -avoiding double taxaton
Moderator: Mark T Serbinski CA CPA
Is it a distribution of capital, or a distribution of your share of income? If the former, there is no tax in either country. If the latter, the US gets to tax you first on US source income/gains, and Canada will also tax it, but provide the usual foreign tax credit.
In the end, you will pay the higher of the two countries' tax rates, which will be Canada. No double tax.
In the end, you will pay the higher of the two countries' tax rates, which will be Canada. No double tax.