Foreign Tax credits in Canada

[dorins]

In my case not all my foreign taxes are recognized totally by tax credits (federal and provincial).

I read somewhere that "Non-business foreign taxes which are not recovered as a tax credit may be deducted from income on line 232 of the personal tax return, "Other deductions", as a s. 20(12) deduction. When this is done, the foreign tax credit calculation is then revised, by reducing both foreign non-business income and foreign tax paid by the amount of foreign tax deducted on line 232."

I looked the 20(12) on CRA and ran across "INTERPRETATION BULLETIN NUMBER IT-506 " .. a bit murky for me; I also saw this 20(12) referenced in a tax software DT MAX (which I don't have) so I assume this can be used for this purpose.

In essence: is there a way to claim the difference of unrecognized tax credits on line 232 (or elsewhere)?

[nelsona]

There is a difference between not recognized and not usabel. If your Cdn tax rate is lower that your US rate, you simply lose the credit. You cannot lower your Cdn tax on US incowem to below zero.

20(12) is not applicable in this case, unless there is DENIED credit by treaty.