1116 Questions.

[richarooca]

I think part of my confusion is what is the word "TAX" that you refer to in other thread regarding order of filing.

#1 So after 1st pass, what value for TAX do you use in the other country's tax credits? (I assume for US return you use amount from Canada's line 435 (total tax payable) on first pass, and for Canada return you use tax computed on 1040's line 46 (Tax on 44 plus AMT if any). Then you apply the credits as applicable, and of course you have to use effective rates and so on, but is the base for TAX what I referred to above?)

If that's correct, one's using Canadian tax credits in pass 2 may reduce total paid, but not TAX, since TAX is BEFORE credits. Otherwise I could see this being a repeating cycle, which you've explicitly said it is not.

#2 Obviously you say you can't use tax credits more than what you paid. So for example if my TAX to US is 1500, and my TAX to Canada is 30,000, could I find a situation where I get $1000 credit from US to apply to Canada, and $1000 from Canada to apply to US? I'd be using less in credit than I paid to either, but still coming out "ahead". Maybe I'm dreaming.

#3 For 1116, I have General (for employment), Passive (for Canadian passive interest income), AND an 1116 for resource by treaty (for my US dividends and interest that are taxed by Canada). Is the resource by treaty correct in this case?

Thanks and hope you get through the next 2 months with flying colors.

[nelsona]

I've addressed all issuse that one can [possible have on this. Happy searching.